It takes a great deal of planning to create a loyalty program, including thinking of ways to educate staff about the program, and ways to garner customer participation. Once the planning is over, the key messages of keeping staff informed and customer participation top-of-mind need to be continually reinforced.

Create a presence for a loyalty program by thinking of it as an asset. When advertising, include information about the loyalty program. Create an area on the company's web site devoted exclusively to the program. Continue in-store presence and point-of-sale promotion of the program. Reinforce the program message to customers. If email addresses are collected as part of program enrollment, they should be used to communicate to members (those that have opted in for this type of communication).

Let employees know some very simple information about loyal customers. Factors like "40% of in-store purchases are made by loyalty program customers" and "the top 10% of loyalty customers have spent more than $500 and made an average of seven purchases" demonstrate the value of the program, which goes a long way toward fostering good employee attitudes about the program.

There's a reason the first two years of a loyalty program are critical. When a program is launched, better customer retention is almost always at the top of the list of objectives. Better retention of customers has a direct tie to profits. Bain and Company reports that with respect to increasing retention "...the impact of retaining 5% of your customers can result in 25% - 85% increase in profit over time..." The two key words in the quotation are "over time." Seeing the results of improved retention requires time -- time to establish a baseline performance and time to be able to measure year-over-year performance.

Be very careful of using the first six months of loyalty program data to start formulating year-over-year activity. Because most loyalty programs sign up new members when they make a purchase, the first few months of a program show high levels of enrollment and high levels of spending.

The critical success factor here is for organizations to continue to believe in the reasons that dictated the creation of the loyalty program, and allow the program to perform. There are lots of opportunities to meet short-term objectives - knowing who are your customers, beginning to communicate with them more frequently, and planning special promotions. To measure the longer-term objectives takes time.

Because loyalty programs are successful through the information they gather, they require large databases. The customer knowledge represented by those databases is the reason why the loyalty program was created. It's important to have the expertise available (whether internal or external) to leverage the value inside the database. Building a strong database management team is necessary to demonstrate success of campaigns or increased retention.

When planning promotions for the businesses' most loyal customers, there is a great tendency to want to include everyone. However, without creating a control group, the results of the promotion will not necessarily drive good business decisions.

For instance, if a company planned and executed a promotional campaign for all customers and created an average incremental spend of $10 per customer at a cost of only $2 per customer to execute, what would the result be? The business would be thrilled of course, because the net profit of $5 (lucky business has a 50% gross profit margin) for a cost of only $2 is a great business return! Or is it? Suppose we included a control group in the above example and members of the control group spent an average of $6 incrementally during the same period. The difference of $4 can be attributed to the promotion, and at a cost of $2 per customer to execute the company actually broke even.

Be sure to include a control group. Accurate promotional measurement will help drive better business decisions. To address the common concern about excluding any loyalty members from the promotions, settle on tracking which members have been excluded from a promotion in the past (because they were in a control group) and ensure they are included in the next few promotions.

In creating a loyalty program and asking customers for some personal data (name, address, phone number, email address, etc.) the company likely has made some privacy promises to the customers. Even if no promises were made, there is likely an implicit trust in place. Companies must never break the trust between their best customers, the strongest asset of the business. That means do not sell or rent customer lists to third parties, and allow customers to opt out of various forms of communication (email, promotional distribution, etc.).