Demolishing Generic Loyalty Programs
November 26, 2017
2 years ago
A guest article by the Smile.io team. They developed a Shopify app that allows you to create your own branded loyalty/rewards program.
With the new year right around the corner, it’s important to consider how customers are changing the loyalty landscape. From custom shopping experiences to seamless omnichannel integrations, consumers now expect more from digital and physical retail.
Part of these expectations are reward programs. At this point, it’s no secret that a customer retention strategy is critical to keeping customers coming back to your store. In fact, Nielsen found that 84% of consumers are more likely to shop with retailers that offer loyalty programs. Not all retention strategies are destined for success, though. In a market where customers are demanding unique retail experiences, there is no room for generic loyalty programs. If customers don’t feel that being a member of your rewards program brings them real value, they’ll be more likely to disengage and may even consider switching to a competitor.
To prevent this (and to retain the customers you’ve worked so hard to acquire), the shopping experience that you offer should be personalized, convenient, and engaging. With 73% of customers more likely to recommend companies who have strong loyalty programs, carefully crafting your own rewards strategy should be top priority!
So how do you develop a rewards program that stands out from the crowd? To create an engaging loyalty program, your retention strategy should include a seamless brand experience, rewards that are desirable and attainable, and a sincere personal touch.
Let’s take a closer look and what this could look like for your brand!
The Best Loyalty Programs Deliver a Seamless Brand Experience
The goal of any company is to develop loyal customers. These customers are committed to your business and will continue to purchase from you rather than your competitors, but how do you develop this kind of loyalty? Well, loyalty is built on trust, and trust is built on consistency. If you have an incredible brand image but your rewards program is poorly designed, you are not providing a consistent brand message. This is confusing for customers, and makes it difficult for them to trust your brand.
As a result, the best loyalty programs are brand extensions as opposed to brand distractions. Designing a rewards program that looks like, acts like, and sounds like your brand will do wonders to reinforce your customers’ relationships with your business. One of the best ways to do that is to ensure your program is designed to match your company’s brand image before you launch — down to the last detail. This means that your loyalty program can’t be just a logo on your website’s explainer page. It needs to be an entire experience that brings your brand to life, from the program name to the “currency” you choose to award your customers with.
A great example of a business that has created a seamless brand experience through their rewards program is Glow Recipe. This brand is all about promoting soft, luxurious skin, and their “Glow Miles” program does a fantastic job of making earning rewards as easy as remembering to moisturize! Offering three membership tiers, including Glow-Getter, Glow-Jetter, and Glow-First, Glow Recipe provides members with opportunity to move up the ranks for a more luxurious experience. From top-to-bottom, this rewards program is branded to perfection.
Businesses like Glow Recipe are setting a new standard for developing 360 degree brand experiences. With that in mind, it’s imperative that you brand message is communicated seamlessly if you want to attract and maintain the attention of today’s distracted customer.
Remember — without consistency, there is no trust, and without trust, there is no brand loyalty!
The Most Successful Rewards Programs Deliver Rewarding Experiences
Did you know that more than one-fifth of loyalty program members have never redeemed their points? Having a rewards program with a low-redemption rate is a sure sign that your program members are not engaged. This could mean a couple of things about your program:
- You are not offering enough ways for customers to earn points
- Your customers don’t see value in your rewards
Since your customers are likely registered in a number of rewards programs, you need to make your program’s redemption thresholds attainable and/or offer rewards that customers actually value. If you don’t, your program may be forgotten.
To keep your program top of mind, your customers need to be motivated to earn points. To help make that happen, try giving your customers points for things like social shares, referrals, or reviews on products and services in addition to completing transactions. Having multiple opportunities to earn points will motivate your customers to accumulate enough to redeem while simultaneously setting your program apart!
The second culprit of low redemption rates is undesirable rewards. It’s easy to provide customers will discounts and coupons, but if that’s not what your customers are motivated by they’re unlikely to participate. So instead of generic rewards, try offering unique ones that make sense for your brand! This could be a best-selling product, a limited edition gift, or an experiential reward that can only be accessed through redemption.
Sony is a fantastic example of a company who does this well. Their Ultimate Rewards program gives customers the option to redeem rewards for concerts, sporting events, and more! When you consider these rewards, it’s clear that their program is designed with their customers’ needs and interests in mind.
Remember — your rewards program is about your customers. If you truly want to thank them for the value they provide your business, they have to see value in your rewards. Not sure what they’re interested in redeeming? Ask them! A simple survey or Twitter poll can provide you valuable feedback about your customer’s wants and help you cater your program appropriately.
At the end of the day, finding unique ways to provide points and offering desirable rewards is an easy way to set your rewards program apart. Don’t wait for your customers to start disengaging — get creative today!
A Personal Touch
Personalization is one of the most noteworthy shifts in modern retail. Using customer data, the best businesses are developing personal connections by addressing customers by name, making unique product recommendations, and sending engaging emails (among other initiatives). According to Mckinsey, personalization can lead to a 50% reduction in acquisition costs and a 5–15% increase in revenue. Unsurprisingly, customers who feel special and individually recognized by loyalty programs are 2.7 times more satisfied than those who do not.
Generic rewards programs fail to capitalize on the trend of personalization, treating customers like numbers rather than people. Gone are the days of simple punch cards and generalized promotions. Instead,, the modern loyalty program should be individually catered to each member. Rather than sending marketing communications that do not address customers personally or consider their unique wants or purchase behavior, add a personal touch like the customer’s name or suggest rewards when a program member logs into your site.
The return on personalization initiatives will be huge for your business: not only will your customers feel valued, but you can also improve the efficiency of your marketing budget by up to 30%! To avoid being labeled simply another generic loyalty program, show your customers you care by demonstrating that you listen.
Make Your Program Unique — Think Outside Of The Box!
In today’s highly saturated retail market, 79% of consumers will seek out loyalty and reward programs before deciding to make a purchase. While it’s clear that having a rewards program is imperative to customer acquisition and retention, the key is having a program that is enticing enough to do the trick!
Don’t fall into the trap of believing that a loyalty program is one-size-fits-all. Instead, focus on leveraging your brand, offering a unique rewards experience, and incorporating customer data into your program. With these changes, your loyalty program will most definitely lead the pack!
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Originally published at heycarson.com.