Our friends at Ad Roll show you everything you need to know to make the most out of your loyalty rewards program.
Don’t you just love when companies reward you for shopping with them? We’re talking discounts, freebies, and other cool perks that make shoppers feel like they’ve chosen the best brand to support. Yet, take a look inside your wallet — how many store loyalty cards are just sitting there unused and gathering dust?
When it comes to designing loyalty programs, many retailers just aren’t hitting the mark. One study found that 53% of shoppers have abandoned at least one loyalty program within the last year. Rather than shower shoppers with free swag in hopes, that they return for more, a successful rewards program needs to be strategic.
To make the most out of your rewards program, here is everything you need to know when designing your own, from the kinds of treats you should offer to unexpected ways to delight shoppers.
What Is a Rewards Program?
A rewards program, also known as a loyalty program, is a business strategy designed to encourage customers to make repeat purchases and boost their lifetime value.
Rewards programs work because it allows businesses to nurture the customers they already have instead of constantly chasing new ones. In fact, 80% of a brand’s future revenue comes from just 20% of its existing customers.
6 Tips to Keep in Mind When Designing Your Loyalty Program
Offer Desirable Rewards
One massive problem brands struggle with when it comes to their rewards programs is offering undesirable perks that customers don’t actually care about. Though we all enjoy things like free shipping, add-on samples, or 10% off discounts, it’s essential to offer something bigger and bolder to grab attention. The set of rewards should feel valuable to shoppers rather than seem like an afterthought.
In today’s Instagrammable experience economy, consider offering top customers rewards like:
- A VIP experience, such as access to a branded pop-up or a behind-the-scenes tour of your company.
- A chance to win a big prize, such as an all-expenses covered trip or once-in-a-lifetime tickets to a major event.
- Access to a community event, such as a workshop or virtual hangout.
Marketers love Sephora’s Beauty Insider program, which has three membership tiers. Top “VIP Rouge” customers not only enjoy great deals and invitations to experiential events but also access to exclusive products.
Additionally, to provide more flexibility to shoppers, let them choose how to spend their points rather than dictate their experience. For example, 10 points unlock free shipping, or 500 points equal a branded sweatshirt. This way, customers have personalized goals to work towards.
Design a Seamless, Multi-Channel Experience
A good rewards program should have excellent UX and UI, meaning that shoppers can easily:
- Log in via mobile or online to check how many points they have earned.
- View how many points they need to unlock their next reward (a progress bar works great here).
- See how many points they will earn for any action they take.
Starbucks’s mobile app does everything, including allowing users to use their “Star Points'' to redeem drinks. The app also notifies customers of special days where they can earn double or even triple points.
It’s all about integrating your rewards program with your e-commerce platform, marketing channels, and customer service.
Pro tip: Want someone to manage it all for you? We’ve got you covered at Kangaroo Rewards.
Create Creative Ways to Earn
Shoppers don’t just want to earn when they spend. So, why not reward them for actions that benefit your brand? For example, you can use your rewards program to thank shoppers who:
- Leave a product review
- Share user-generated content that you repost
- Follow you on social media
Urban Outfitters’s “UO Rewards” offers points to members who make purchases, subscribe to emails, and leave reviews. Their perks aren’t too shabby either, from event tickets to signed merch from different artists.
Even better, design different membership tiers that shoppers can advance through, depending on the number of points they’ve accumulated. (The higher the tier, the better the rewards.) Having your best shoppers enjoy top or “platinum” tier status boosts their affinity to your brand and gives them something to talk about.
Provide Flexibility
Let’s be honest: Some of the spending rules that brands initiate via their rewards programs are anything but fun. You know what we’re talking about — those programs with points that expire within a month or others with extremely short redemption periods. While these terms and conditions can benefit the brand, they’re simply not customer friendly.
Being more generous with your rewards can go a long way here, whether this means points that never expire or memberships that don’t require renewing.
Maintain Cohesive Branding
Think of your rewards program as an extension of your brand community experience — you’ll want a program name that’s relevant to your brand and products. That means not just calling it your “Rewards Program” — you’re more creative than that! It needs to be memorable and attention-grabbing.
Provide Unexpected Delight
Shoppers love it when they receive something they weren’t expecting. When it comes to rewards programs, this may be a small gift (or unexpected points) for their birthdays or flash VIP sales. These moments of unexpected delight all contribute to creating a memorable customer experience.
Skincare brand One Love Organics showers its loyalty program members with extra points occasionally for no reason other than providing some unexpected joy.
A rewards program is a great way to build a community of loyal fans and brand advocates who will come back for more. Ready to get started? Check out Kangaroo Rewards’s loyalty and marketing solution today. And for more strategies to attract, nurture, and convert customers, AdRoll is here to help, too.
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