Rewards Program as a Winning Marketing Strategy
Rewards programs have been commonly used by many companies in an effort to drive customer loyalty. Benefits of loyalty programs include increase in new customers, increase in customer spending and retention as well as shifting spending to other products.
However, loyalty programs have seen a decrease in membership lately. According to a 2015 COLLOQUY research, total loyalty program membership in the U.S. is over 3 billion, a 26% increase from 2013 figures, but 58% of these memberships are inactive. This shows that the typical rewards program strategies are already outdated and no longer impact a customer’s loyalty to a brand.
Businesses need to develop rewards programs that will serve as a winning marketing strategy. Here’s how.
An article on CRMTrends.com, states that most rewards programs do not have a good program positioning. This ends up making ones’ rewards program similar to everyone else’s. In order for a program to succeed, you must develop a vision or positioning that reflects what you stand for. This makes your program different and unique. Your positioning will also serve as your basis for deciding what to offer, how you communicate and how you wish to come across to your customers.
Relationships not rewards
The same article states that “many confuse loyalty with rewards”. The truth is that driving customer loyalty is more than just earning points and giving rewards. Being loyal means being an advocate of the brand. To achieve this and to make your rewards program successful, it has to be developed to support your customers experience with your brand. It entails you getting to know your customers better and vice versa.
A rewards program must be integrated seamlessly across all channels in order to fully engage customers. Matt Wise, CEO of HelloWorld, said in an interview with Retail TouchPoints that “At the end of the day, a loyalty program should be about creating a community for customers. That community and program can then extend across Facebook, Twitter, Pinterest and whatever channel becomes hot in consumers’ worlds.”
In the same article, Andy O’Dell, Co-Founder and Chief Strategy Officer at Clutch, said that retailers “need to take a fresh look at loyalty, beyond the stale definition that we’ve used for ages” and that they should “focus instead on the level of involvement consumers have with the brand across channels.” Doing so will help consumers develop an emotional connection with your brand.
Personalization and Relevance
Customers nowadays prefer to be communicated with based on their personal preferences and tastes. Rewards programs that are too general are not relevant to them and will no longer work. Instead, customers tend to respond more when they receive communications and rewards catered specifically to them. This makes them feel important and recognized and makes them think that you truly care about them.
Rewards programs that deliver personalized messages that target customers’ specific needs and wants will engage your community and drive loyalty. In fact, according to the Bond Brand Loyalty report, “Customers’ overall satisfaction with loyalty programs is 4.6-fold higher when they receive very relevant communications.”
In the end, no matter what the specifics or mechanics are of your rewards programs, the most important thing for you to consider is how much they positively impact customer experience. The more meaningful your rewards programs are to them, the more successful it will be.