With personalisation on the rise, loyalty programs are gaining popularity once again.
When done right, they're a win-win for customers and brands alike.
Some even prompted customers to switch sides, with little to no benefits to the customer.
As they regain their position as a tool for customer engagement and retention, one must ask: what makes a loyalty program actually worthwhile?
To be truly effective, you have to go beyond simply offering points or discounts.
Your customers need to understand what exactly they're gaining from the program. Shocking, I know.
Clear concise messaging about rewards, benefits, and of course, how to earn them ensures they see the value in signing up (and staying on.)
Sephora's "Beauty Insider.' The retail giant knows what the girlies want and how to give it to them. It's simple and easy to understand--all members earn 1 point per $1 spent.
The points get you to different tiers. And the benefits (savings, samples and experiences) are all listed clearly for each tier, increasing in value as you climb.
On that note, a tiered rewards system is very effective.
Offering different tiers of rewards motivates customers to engage more to unlock higher levels of benefits. This taps into the psychological principle of progression, driving your customers to aspire to climb the tiers.
Obviously, if I know I'm about to unlock the next level of benefits, I'm going to spend that little bit extra. It's genius.
Hilton Honors. Like Sephora, the hotel brand has a tiered program where members can move up from Silver to Gold to Diamond status, the more points they earn. Moving up unlocks increasing levels of perks like room upgrades and free breakfast.
Elements like challenges, badges, or competitions encourage your customers to stay engaged and connected by tapping into their natural desire for achievement. Because who doesn't love a little praise? 😉
Duolingo. Their streaks and leaderboard system uses gamification to engage its users. The platform rewards users' continuous participation and creates friendly competition. And this is why they have a cult following.
We don't all like the same things - crazy, right? Providing customers with a range of options for redeeming points (e.g., discounts, products, experiences) increases engagement. It also ensures rewards cater to different customer preferences.
Chase Ultimate Rewards. The bank offers a system that allows cardholders to redeem points for travel, cash back, gift cards, or purchases through partners like Amazon. This gives customers a variety of options.
In this day and age - it's a must. Loyalty programs should be seamless across all channels, from online to in-store, and even through mobile apps. Customers should be able to engage with the program wherever they interact with the brand.
Nordstrom's Rewards. Or 'The Nordy Club.' The program is fully integrated across their app, website, and physical stores. This mean customers can easily earn and redeem rewards, no matter where they shop. Perfecto.
