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Loyalty programs are nothing new to retail. In the beginning, most consisted of simple punch cards or other basic means of tracking customer transactions. As technology improved, many programs became digitized with key tags, cards and other ways for retailers to keep track of these transactions, aside from purely manual means.
Then came big data, enabling retailers to track transactions and analyze consumer purchasing behavior and trends. This resulted in better consumer engagement and more relevant messaging.
However, according to an article on Venture Beat, consumer interaction with brands has now become fragmented, forcing companies to review their loyalty programs and interact with customers via a more multi-channel strategy, rather than just point-of-purchase.
With the explosion of social media, along with various websites and other media, the entertainment industry leads the pack in consumer engagement and tracking. For example, Marvel – the superhero megastar – recently added a loyalty program to reward transactions and engagement across the many channels their consumers use to interact with the company.
And Marvel isn’t the only company adopting this. The Ultimate Fighting Championship also have a thriving rewards program. It rewards fans for doing things they already do to interact with the company, along with things that the company wants them to do – such as to tweet and purchase pay-per-views STREAMING, rather than via their cable provider, so as to bring more profit to the UFC. In exchange, fans can redeem points for items such as signed merchandise and special access to live events.
The Venture Beat article further revealed that, according to Visa 2016 Bond Loyalty Report, loyalty programs are all headed towards personalization and experience. The report shared that, “brands whose representatives make members feel special and recognized have 2.7 times higher program satisfaction.”
Ultimately, this goal of making customers feel special and recognized has always been the point of a rewards program. The only thing that has changed is with the level of rewards some programs now offer, it has become harder to make customers feel special, as many rewards programs don’t have exciting, appealing or attractive rewards.
While customers do like discounts, free services and other normal rewards, some want something more. That could mean VIP treatment, exclusive experiences or other relevant rewards… something that gets them excited and makes them want to earn points in the program, rather than just earning them by default.
The more interested and engaged you can get your customers in your rewards program, the more likely they will be to patronize your business on a regular basis. Don’t simply throw a reward program at your customers and hope they buy in. Create some memorable or unique rewards that are above and beyond simple free oil changes or discounted services. They don’t have to be expensive, just tailored to YOUR customers.
Think about the actions you want your customers to take and transform your rewards program into one that incentivizes them for doing those things. Keep in mind that you can also use loyalty points in lieu of discounts when pushing a specific product or service.
If you need to ramp up tire sales, rather than offering discounts, why not offer extra loyalty points? The other use for loyalty points is to leverage them when customers have poor experiences. The hospitality industry is very good at this. Have you ever had a bad experience during a stay at a hotel then, when you brought it to the hotel’s attention, they apologized with extra reward points? This practice makes the customer happy without any loss of revenue through refunds.
Keep your customer engaged and motivated. They will visit more often and, typically, spend more money on each visit. And that’s all you really want your customers to do in the end.