Commentary

Loyalty Programs: Get Points For Thinking Beyond Points

Marketers constantly waffle about whether loyalty programs are effective at retaining shoppers and improving the customer experience. Notable loyalty programs like Target's boom and bust, with new iterations emerging nearly every quarter. Given the ongoing need for new versions of many prominent rewards programs, some marketers might wonder if investing in loyalty programs is even worth it.

The answer? Good loyalty programs work. Bad programs don’t. 

Simply put, a great program provides a seamless experience across all touchpoints and will drive growth. If you’re just focusing on points, you’re just getting started.

If your brand is in the midst of a loyalty revamp, here’s what you need to keep in mind: 

Communicate the value of your program

Gone are the days of the simple punch card. A strong branding strategy will make or break your loyalty program, and that starts with the name.

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What will your customers get from membership? Status? Exclusive content? A more personalized experience? Whatever the value is, convey it clearly in your name.

For example, Hilton Honors associates its program with prestige and status, while Sephora Beauty Insider represents exclusivity and exciting content. My Best Buy® is personalized, while its predecessor, Best Buy Reward Zone™, was all about rewards. 

Remember: Price is the lowest bar now. You have to offer more than just good prices to compete, and you’ve got to communicate the value clearly.

Convenience is king

Regardless of what you’re offering customers, your loyalty program should deliver a more convenient, streamlined customer experience. 

Kobie’s recent study on the state of loyalty in the age of connected consumers shows that one in four shoppers won’t join a loyalty program if it requires too many purchases to earn and redeem points. Additionally, 26% of customers won’t join a loyalty program if it asks for too much information or takes too long to register. 

In other words, no one wants to put forth undue effort to join and engage with your loyalty program. Instead, the program should make your brand experience even more seamless for customers.

Think about the Starbucks Rewards program: Besides racking up points for free drinks, customers use the program largely because it makes their lives easier -- they order drinks ahead through the app and skip the morning coffee line. 

Surprise and delight -- beyond just low prices

It’s not a surprise that price will always be top of mind for most consumers. The report also reveals that price is the most significant factor for driving brand loyalty, with 35% of all respondents ranking it as most important. 

While this means loyalty programs should emphasize traditional discounts and rewards, it doesn’t mean it’s that easy. 

Instead of always offering simple discounts, consider offering free products that shoppers pick themselves or other personalized rewards. 

By surprising and delighting customers with exclusive gifts, you’ll provide more excitement and engagement for shoppers than a mere cash discount.

If you can use your loyalty program to make your customer experience easy, meaningful and relevant, you’ll stand out in a market that’s more crowded than ever.

1 comment about "Loyalty Programs: Get Points For Thinking Beyond Points".
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  1. Daniel Olson from The Loyalty Consultants, March 19, 2019 at 3:09 p.m.

    Dave,

    Great Article, and I couldn't agree more. Having a points program as a loyalty prgram is just doing something tactical to try and engage your consumers. Great loyalty programs must have two things foundationally in them. One, to be a member of the program should be given the ability to experience the brand at its very best. Second the program should enhance and expand on the very reason you engaged with the brand in the first place. It all comes down to creating great customer experiences at every moment and being consistent in delievring on the brand meaning in an individual's relationship with that brand.

    Dan Olson

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