Loyalty programs are a great way to build lasting customer relationships and turn frequent or even first-time customers into long-term brand advocates. A customer who feels valued and connected to a brand is more likely to make repeat purchases.
Successful loyalty programs leverage customer data to deliver relevant, personalized communications to their customers that convey appreciation and offer a unique touch.
Below are 6 things to keep in mind when developing a loyalty program that truly speaks to its members and delivers a best-in-class customer experience.
Like all marketing initiatives, loyalty programs should be informed by customer data. Data defines important questions and functionalities – what message components can be personalized, what type of rewards are customers most likely to redeem, what perks do members value the most, what incentives are most effective in driving new member registrations, and much more. Knowing the answers to such questions can help ensure that a brand’s loyalty program consistently meets consumer expectations and can be easily adjusted when member preferences change.
In addition, customer data such as loyalty status, rewards earned, point redemptions, etc. can be used to personalize every loyalty program message which would lead to higher engagement and could even provide a loyalty milestone for members to work towards, such as higher status or better rewards..
Getting close and personal with data might not be the most glamourous part of the loyalty program development process, but is well worth the exercise.
The way brands welcome new members into their loyalty programs can define the rest of the relationship – that’s why designing a thoughtful welcome message is key.
The first goal of a loyalty program welcome is to highlight the benefits of being a loyalty member while communicating a sense of exclusivity. Just like regular welcome messages, loyalty ones garner an outstanding response – they generate 2.5 times the open rate, more than 4 times the unique click rate and double the click-to-open rate (CTO) of business-as-usual campaigns. To extend the engagement of welcome messages and keep the momentum going, marketers should consider a welcome series instead of a single welcome email. That way, each message can focus on a different aspect of the loyalty program and how members can take full advantage of all it has to offer.
Speaking of welcome messages, a brand’s regular welcome program is a great way to introduce their loyalty program and get new subscribers excited about special perks and offers. Similarly, a membership anniversary message is a great way to add more lifecycle messaging to loyalty communications, thus driving higher engagement and conversion. Anniversary campaigns typically drive 40% higher open rate, 50% higher unique click rate and 30% higher CTO than business-as-usual communications.
In this example, Sephora does an excellent job of welcoming members, getting them excited about what’s to come and outlining the benefits of their loyalty program while still giving members the opportunity to purchase by promoting their best-seller items.
With a variety of loyalty programs to choose from, customers might need more of an incentive than rewards points to join a brand’s loyalty program. Those who have taken the time to enroll want to feel like they have exclusive access to benefits the average subscriber does not (like a backstage pass to their favorite brand). Marketers can announce special events and initiatives to their loyalty members first or provide additional incentives to members which will reinforce the feeling of exclusivity that is often a key reason for joining a rewards program. This is a simple, yet overlooked way to keep VIPs happy while making the program fun and exciting!
TOMS does a great job of conveying exclusivity to rewards members by giving them early access to an upcoming sale that has not yet been advertised to regular subscribers.
Consumers join loyalty programs for one reason: rewards – be it in the form of status, points, cash-back, access or something else. Brands should always keep members updated on what they have earned and how close they are to a reward – this helps to reinforce the value of the program, helps them quantify their loyalty and gives them an attainable goal to strive towards achieving. Sometimes all it takes is a glimpse of what’s in reach to motivate a customer to make that next purchase. Updates about rewards will also remind customers that abandoning the program would constitute a loss since they already put in the effort to get where they are.
Account or reward statement emails are specifically intended for this but they’re often sent at longer intervals – such as monthly. Why not remind customers of their earnings more often? Marketers can include a real-time point balance or rewards status module in every email a loyalty member gets without taking up much real estate.
The two modules below from Marriott Rewards are great examples of an engaging, real-time loyalty email components that remind members not just of how far they’ve gotten in their loyalty journey but also of the consistent benefits they get from their membership.
Visuals and infographics are another clean and creative way to make rewards feel within reach. With flooded inboxes, something a reader can easily scan is likely to stand out. Just be sure to consider how they would render on mobile or in images-off environment.
By using straight-forward messaging and clear, colorful visuals Walgreens reminds loyalty members of rewards they have earned as well as how to get more.
It is great to have a ton of loyalty members but it’s more important if they’re active. Based on a study by Bond Brand Loyalty1, the average consumer is registered in 13.4 different loyalty programs but active in only 6.7
This is why a lapsed member message or series is a key component of an effective loyalty program. This type of messages are also easy to set up and execute – they can target loyalty members that have been unresponsive in a while or are just about to fall into inactivity. The primary goal of these campaigns is to remind members of existing perks and rewards they qualify for, re-iterate the benefits of being part of the loyalty program, and incentivize them to engage. Maybe members forgot a great perk such as free shipping or were not aware of newly-introduced benefits such as a special member service (like a digital stylist or concierge).
6. Find New Ways to Engage!
This is the fun part! Customers love the benefits of a loyalty program, but also find value in being a part of a community. Loyalty program emails often provide a great opportunity to include sticky content that enhances the relationship between a brand and its customers and connects them with other brand loyalists. Marketers can include user generated content from social channels, polls, stories, or behind the scenes information on the brand or products.
Real-time elements such as countdown clocks, scratch offs, or maps dynamically populated with the nearest store location make emails more interactive and motivate customers to make that next purchase or redeem a reward.
In short, the program sounded fun and worthwhile when a customer joined, so find ways to keep it extra special!
Sephora makes the reward advertised in this email even more redeemable by including a shopping guide for the holidays which offers plenty of ideas on what shoppers can use their reward to purchase.
In the email above REI incorporates useful content that helps members pick the right shoe for their unique style of activity. In addition, the message fosters a sense of accessibility and community through the invitation to join other REI enthusiasts on a hike.
Loyalty programs are one of the most effective ways to ensure consumers remain engaged long-term and well-designed ones adhere to the 6 points above in order to effectively cater to a brand’s most important customers and ensure an experience that’s in line with their expectations.