It’s a fact that customer loyalty rewards programs can increase engagement and retention, increasing repeat sales by as much as 80% and per-customer revenue by a factor of more than two. On average, consumers are enrolled in an average of approximately 30 programs, but here’s the kicker – they’re active on less than half of them.
Why? Primarily because many businesses launch loyalty programs only to sit back and simply expect users to engage automatically. They do not actively work on strategies to promote engagement, and then wonder why their loyalty program is not successful. More engagement means more repeat sales and greater per-customer revenue. There are many strategies to get users to engage with your loyalty program.
Here are the top five.
Take a 360-degree view of engagement
Most loyalty programs reward points for purchases. But this is very limiting because it assumes you are only engaging with the shopper at the time of purchase. Therefore, a modern-day loyalty program should award points not just for purchases, but also for other activities – account creation, referrals, birthday bonuses, writing reviews, sharing on Facebook, Twitter, Pinterest etc. On average, a 360-degree engagement paradigm creates six times more opportunities for engagement compared to a program that offers just points for purchases.
“Participation rates in loyalty programs will continue to decline if retailers persist in presenting the predictable, one-dimensional model that rewards customers with points and discounts. This model, while the traditional format, does not maximize the ability of today’s loyalty strategies to identify and accommodate unmet…needs,” writes Bryan Pearson, President of LoyaltyOne.
Enable continuous user interaction
A loyalty program should enable continuous interaction via email, push notifications, on-site and in the store. For example, when the shopper earns points, reaches a higher tier or new redemption status, a personalized, congratulatory email should go to that loyal shopper. Open rates for such emails are 50% or higher and click rates are in the 15-25% range. Moreover, these emails are not typically viewed as spam because they updating the customers about their loyalty account status – and that’s something that’s important to them. Similarly, when the shopper is on the site, you should provide calls to action to engage with the program; one example, letting them know how close they are to reaching a new loyalty tier.
Zappos rewards program gives 50 points simply for signing in to the website or mobile app and 100 points for writing a review. Imagine users revisiting the Zappos website and signing in just to earn free points.
Turn on gamification with tiers
Gamifying the loyalty experience using tiers or levels is critical to improving engagement. Shoppers should be encouraged to engage more, interact more, purchase more to earn points to move to the higher tier. Once they reach it, they’re likely to keep spending to maintain the benefits in the higher tier. Additionally, they may value the prestige and benefits accorded to them by a higher tier.
A great example of tier usage is Predator Nutrition, a sports nutrition retailer website built using Salesforce Commerce Cloud. They offer an accelerated number of points as the shopper moves to the higher tier, providing a clear incentive for them to take actions that support this upward mobility.
Launch frequent marketing promotions
Marketing promotions using points are a lot more effective than just giving away discounts. Points earned are an inducement for the next purchase. With discounts, which are offered by nearly all retailers seemingly all the time, the shopper does not have any obligation to make the next purchase. Run promotions such as double points days, triple points weekend, 50% more points for abandoned cart purchases on a frequent basis.
For example, Sigma Beauty Pink Perks program achieved a 70% open rate and 15% click through rate for their marketing promotions emails.
Provide attractive redemptions
A loyalty program should encourage redemptions of points. Redemptions of points lead to additional purchases. Users love getting free stuff. Let them redeem points for cash discounts, percentage discounts, or free products.
If you tell your customers that a redemption option is available, 20% will typically redeem that it. This redemption is an inducement that leads to the next purchase.
Again, Predator Nutrition loyalty program does a great job at engaging users by giving them free stuff.
If you have a loyalty program, don’t wait around for customers to engage with it. Use the strategies described above to actually get your customers to use the program. As they engage, your repeat sales and per-customer revenues will go up.