Understandably, businesses have many questions when they are implementing a digital loyalty program…
What rewards should we offer? How do I promote it? How do I get customers to sign up? And so on.
While these are all very valid questions, the first one you should be asking when first starting out is: what do customers want from a loyalty program?
Answering this question first will help you create an effective rewards program from the get-go, and will make the rest of the questions much easier to answer.
So let’s dive-in and take a look at what customers generally expect from a loyalty program…
1. Valuable Rewards
Obviously, the number one benefit customers are chasing from your loyalty program is the rewards. This is the main incentive that encourages customers to sign up.
It’s important to remember that if the customer is going to enroll in your program, it is only fair that you provide a reward of value in return. It is an unwritten agreement.
There are many different types of rewards you can offer your customers, and they won’t all work for your particular business. Therefore it’s important to invest some time into figuring out what rewards suit both your customers’ and your business’s needs.
The best types of rewards are those which please your customers and boost your sales simultaneously.
Don’t be afraid to think outside the box either. Sometimes offering experiences can be much more effective than giving away products or discounts.
Let’s say you run a restaurant – perhaps loyalty members gain access to a complimentary cooking class or VIP night where you offer up new foods your kitchen is trialing. You can also use that opportunity to upsell other products.
Consumers are also increasingly aware of global environmental and social issues, and like to know that local businesses are supporting the community. Therefore, incorporating social responsibility into your rewards program can also be a very valuable appeal for consumers to do business with a brand. You can read more about this here.
So as you can see, while it’s obvious that customers want rewards from a loyalty program, it’s not so obvious which rewards will be most valuable.
In a nutshell, it depends on your business, your clientele, and what kinds of rewards you want your loyal customers to enjoy. You are welcome to ask for our advice if you’re not too sure!
The best rewards programs are simple and transparent for the customer to understand.
“Buy 5 X, Get Your 6th Free” type deals are popular because they are simple to understand and it’s easy for customers to track their progress.
This kind of offer is a popular choice for cafes, hair salons, car washes… generally any business that experiences the same customers returning every day, every week or every month consistently.
If a loyalty program is too complex, it will disengage the customer.
In this fast-paced digital era of smartphones and instant gratification, everything’s gotta be quick and convenient, or else it gets dropped. Therefore, having a rewards program that is quick, and easy to join and easy to use, is essential.
Any promotional material you have displayed in-store for your loyalty program should mention how simple it is to sign up and should remind customers that it gives them access to exclusive offers that will save them money.
The more you can streamline every step of your loyalty program, the more likely it is to be successful. Loyalty card apps are unparalleled on this front.
Starbucks has made its rewards program so convenient that by the end of 2017, 10 percent of all Starbucks transactions around the world were being made through the app (that percentage has no doubt risen now).
Hotel chainMarriott has its own loyalty card app where members can earn and redeem points, check-in easily, discover nearby attractions and correspond with hotel management via the app. After experiencing this, the average loyal customer would never dream of staying elsewhere and losing all those convenient benefits.
Put simply, people like to be recognised. Any business that acknowledges their loyal customers as people rather than dollar signs is already on the right track.
Addressing loyal customers by their first name always makes a great impression, and this is extremely easy to do now with customised communications through loyalty apps. The next step is knowing their favourite order, what they purchase on weekdays vs. what they purchase on the weekend, and which of your brand new products they might be interested in.
An effective loyalty program uses the data collected to target that customer’s specific needs for a personalised experience.
For example, you might have two loyalty program members – one who swings by every morning for a quick takeaway coffee on their way to work, and another who comes in every weekend for a leisurely coffee or two while they hang around on the couch for a few hours reading their book.
Despite both of these customers being valued loyalty members who visit your cafe regularly, the same rewards and messaging won’t appeal to both of them. So what do you do?
Design your loyalty program in a way that it can offer the on-the-go customer some added convenience, like “free reusable keep-cup”.
Your weekend book-reader, on the other hand, is probably going to get more pleasure out of a spontaneous “free muffin with your next coffee purchase” or “free upgrade to a larger mug” offer.
Why do people join VIP clubs and go to “members only” events? Because it’s nice to feel like you are part of an exclusive club!
Offering loyalty members access to special promotions just for them, brand new products that no one else has tried yet, and invitations to special events either at the store or for businesses you have partnership agreements with all contribute to making your loyal customers feel special, exclusive, and that they are being rewarded for their loyalty.
When people first become members ofVirgin Airlines’ Flying Club, they enjoy “Club Red” benefits such as earning airline miles with every flight and receiving discounts on accommodation and car rentals. Once they graduate from this level, they get bumped up to “Club Silver”, where they earn 50 percent more on their airline miles than Club Red members, skip the check-in queues, and enjoy priority stand-by seating.
The highest Virgin spenders earn access to “Club Gold”, and that’s when you truly enjoy the full VIP treatment. Club Gold members can treat themselves to a free beverage or perhaps a full body massage in the exclusive Virgin lounge before they enjoy express boarding for their flight, where they earn double airline miles.
The occasional flyer will enjoy the rewards of being a Club Red member, and the lure of becoming a Club Silver or even Club Gold member will keep them flying with Virgin every time they fly.
Customers like to feel important.
Perhaps the most overlooked aspect of what consumers seek from loyalty programs is an appreciation for their loyalty. A good loyalty program will continuously show the business’s appreciation for a customer’s ongoing support.
Welcome emails are a great start. A simple ‘Thank you for signing up” email will make the customer feel instantly appreciated.
And the great part about using a digital loyalty program like Stamp Me, is that this can be automated.
For example, businesses can choose to have it so that every time a new customer joins your program, they receive a welcome email.
Merchants can also reach out to members who haven’t visited in a while to get them to come back in. Sending a Push Notification like, “Hi Kate, we miss seeing your face around the shop – pop in for a coffee next week and enjoy a free cookie on us!” will benefit all involved.
Why? Because the business reaches Kate directly, Kate feels appreciated and acknowledged for not having visited for a while, and she gets a free cookie next time she does!
These small communication efforts will keep customers engaged and coming back because they feel valued and appreciated.
So there you have it – this may seem like a lot of information to take in, but the important takeaway is that all customers really want and expect from a loyalty program is valuable and attainable rewards, simplicity, convenience, recognition and appreciation for their loyalty, and to feel like they are part of an exclusive club.
If you can ensure your loyalty program ticks these boxes, you’re guaranteed to enjoy high customer retention and brand loyalty!
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