Q3 • 2021


15


PROGRAMS LOYALTY Consider these types of loyalty programs:


• A points-based program allows customers to accrue points via purchases or referrals or even by writing reviews; they then use those points to obtain free stuff.


“The key to the loyalty game is to be


different from the competition and offer true value to your customers,” Simpson explains. “Once you’ve listened to your customers and understand what they see as value, there are a few strategies you can use to ensure the perks truly drive loyalty and don’t cost the earth. Tiered programs, for example, encourage add- on sales or desired actions such as referrals. They can also provide extra data points— like competitors’ information or customer preferences—that are difficult to obtain without offering a benefit.” Once you have chosen how you will set


• A tiered program allows members to receive perks for how they rank in the program.


• A paid program offers members the opportunity to pay a (normally) nominal fee for extra perks that are more valuable than the fee.


up your loyalty program, get creative with the activations you make available to your members. Among Simpson’s favorites are rewarding customers for providing insights via one-question surveys; offering flash sales with limited unique offers; auctioning off points; segmenting offers and targeting groups based on consumer insights (such as offering relevant value for early adopters of a new product or service); relying on internal customer service or sales staff by offering incentives to promote membership enrollment or renewal; and rewarding behaviors such as referrals, social tagging, or mentions. King believes that customer acquisition


• A value-based programallows members to donate their points to a charitable cause.


• You can also partner with other brands that fit with your industry to offer customers value beyond your business.


via referral programs is another great way to incent your loyal customers to help bring in new ones. The key, she says, is to have a solid offer where there is a mutually beneficial value proposition—the member gets value from the brand for their efforts and is able to give something of value to the new member they are bringing in. Test and learn and make sure you are reaching out to the right customers (typically your most satisfied) with the right offer, and track conversions. “Keep those most passionate members


• Game-based programs, such as sweepstakes and contests, make the process more fun by offering a chance towin perks.


in the happy zone with a strong brand narrative, so they can potentially bring in like-minded customers with similar spending habits,” King says. “Give them compelling content to share with friends to drive consideration. Inspire your social media team to embrace loyalty culture and understand its importance to the business.


Brand ambassadors often provide their own content. Leverage this and apply member recognition and rewards in social channels.” Simpson adds, “Instantly offering an incentive to purchase again is a signal that you care more about generating sales revenue rather than giving a sign of gratitude.”


Once you have chosen how you will set up your loyalty program, get creative with the activations you make available to your members.


Today’s customers are cautious about sharing


information, so it’s important to only collect data points that you will use to deliver relevant value to them as well as communicate how they will benefit from providing their information to you. “Loyalty programs are easy targets for fraudsters and have become the target of many privacy breaches and other fraudulent activities,” Simpson cautions. “You need to ensure there are the appropriate steps in place to provide security for your customers and your business and communicate that you take your customers’ data privacy seriously. The increased compliance demands of the General Data Protection Regulation (GDPR) and associated penalties of breaches are a big risk to be considered.” 


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