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Customer Experience and Design

More than Discounts: 4 Tips for a Leading Loyalty Program

Membership in loyalty programs continues to rise, and it isn’t surprising. There are options everywhere. Sometimes all it takes is giving an email address or checking a box, and congrats – you’re a loyalty member!
But even though membership is up, fewer people are actually engaging with these programs. The average person is a member of around 10 loyalty programs each. With that much competition, it’s a challenge to differentiate your offering from the others, and truly build that loyalty.
What makes a good loyalty program… one people will actually use? Many, if not most, programs center around providing members discounts, but that’s just not enough anymore. With a program exclusively centered on discounts, what you could actually be doing is making them more loyal to finding the lowest price. Whether it’s with you or not. To establish true loyalty, you need more. In its August 2016 report, Loyalty Marketing: Creating Stickiness in a Distracted World, eMarketer explores how to create a loyalty program that keeps them coming back for more.
Focus on the experience
While price and value are still highly valued, loyalty is an emotional state that comes from creating positive experiences with your brand. This is more true with younger generations, where 63% of those surveyed said they stuck with a brand that supported their lifestyle. To some brands, this means focusing more on the in-store experience, making it about more than just shopping. For others, it’s including exclusivity in what they provide to their members. Giving access to events or features that other shoppers don’t get. Explore ways to make your program experiential versus just economic.
Keep rewards in reach
Instead of bigger rewards that take time to reach, real-time, attainable rewards have a higher redemption rate, running as high as 70% to 80%. With smaller, more frequent rewards, there is less likelihood that your members will accidentally let the rewards expire…or that they’ll forget about them entirely. Remember, most members belong to around 10 programs a piece. That’s a lot of reward balances to keep track of. Make it easy by making rewards quick and simple.
Personalize offers
Use the data you collect through your loyalty program to serve up relevant offers to your members. Research has found that the leading reason for unhappiness in loyalty programs is the lack of relevance, flexibility and value of the rewards, which was a pain point felt by 44% of respondents. Lack of relevance was also the biggest reason why someone would leave a program. There’s a huge opportunity to use all the information at your fingertips to personalize your loyalty experiences.
Make it a game
In a survey of North American retailers, 31% of respondents had some gamification elements baked into their loyalty programs, with 31% expected to do so within two years. Applying game-like qualities to your program keeps it fresh and exciting. People want to feel accomplished and feel like they are working toward something. Think about Starbucks’ loyalty program. Members can earn stars that put them on different levels, all with varying stages of perks. It makes shopping there fun. But it does take effort to keep your fun fresh. To keep your buyers from getting bored, continually evaluate and evolve your program to keep it interesting.
To learn more about how loyalty programs and other top trends are impacting eCommerce, download our guide, Innovating eCommerce: Nine Top Trends for 2017.

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Noelle Reinhold, Marketing Director

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