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Strategy

For Best Results, Keep Loyalty Programs Simple

Easy enrollment, easy-to-earn rewards, and easy redemption can help keep a loyalty program top of mind for customers. Here's how you do it right

Evan F.P.
September 12 2018

Through years of engagement and widespread adoption, loyalty programs have become table-stakes for B2C brands of all verticals. While program mechanics vary widely, they all depend on customers opting in to participate before they can yield value. Unfortunately, that’s where many loyalty marketing amateurs make their first mistake.

Recent studies suggest that if the initial sign up is too time-consuming, customers either won’t bother starting the enrollment process, or will abandon the effort during the process. Others churn out due to overly aggressive marketing tactics that try to capture contact details customers often feel brands don’t yet deserve. Further still, many programs fail to activate customers due to frustrating and/or confusing functionality when it comes to earning and redeeming points.

In order for loyalty programs to be effective, they need to offer simple enrollment, simple earning options, and simple redemptions. Here are few ways loyalty marketers can design their programs for maximum engagement through simplicity.

Simple Sign Up

While capturing loyalty member data at enrollment is important for marketing efforts, it can introduce friction into the sign-up process. According to Loyalty in the Age of the Connected Consumer by Kobie Marketing, just over one quarter (26%) of consumers don’t sign up for loyalty programs in the first place because the enrollment process takes too long.

The study’s authors recommend making sign ups simple. Only ask for the information that helps administer the program and some that contributes to marketing efforts – email address, phone, preferred communication method and – very importantly – the preferred frequency of contact. Some may want to be notified when new reward options are available, when they are nearing or have achieved a certain reward level or when there are special promotions available. Keeping communications concise and purpose-driven will help improve overall sign up rates and lower churn.

Earn and Burn

According to the 2017 Colloquy Loyalty Census, more than half (57%) of members abandon loyalty programs because it takes too long to earn a meaningful number of points. Many of those abandon the program in the earliest stages – before earning a single point or a single mile. Additionally, 22% of consumers won’t join a loyalty program if it takes too long to earn rewards. Three-quarters of consumers earn and redeem rewards in three or fewer programs, even though most have signed up for the loyalty offerings of several other businesses.

Programs should make it simple for members to understand their redemption options in terms of what they can earn and how to cash-in rewards once earned. One of the best ways to do that is to offer members the opportunity to quickly “earn and burn” points.

Small, quick reward redemptions can not only engage, but also drive home the value of being a member of the rewards program, according to the Colloquy report’s authors, who suggest that marketers “Create short-term promotional sales by leveraging loyalty for everyone while also focusing targeted investment on the best customers.”

While occasional promotional emails can engage customers, a First Insight consumer research study points out that this type of marketing only goes so far. If the emails are too frequent, they become part of the increasing email “noise” that consumers have to deal with on a daily basis and may be totally ignored or even produce customer friction. The average consumer subscribed to a retailer’s mailing list receives more than 13 emails a week, and more than two-thirds of those surveyed say that anything more than six per week is too many.

Easy Reward Accumulation and Choice

Smile.io recommends offering customers several ways to earn rewards — including points for signing up, rewards for birthdays or other special events like program membership. The more ways the customers can earn rewards, the better their engagement with the program and engagement is critical to success.

Multiple rewards can increase redemption rates by up to 30%, while birthday rewards can increase redemptions nearly 15%. Additionally, one program offering immediate redemption,  Premium Payback by FIS, saw a 25% boost in spending, according to Colloquy.

Personalization is becoming increasingly important. According to the 2016 Bond Loyalty Report, 79% of customers are very satisfied with loyalty programs that offer high personalization.

Engagement also increases by providing mobile access. According to the Bond Loyalty Report, 57% of consumers want to engage with their loyalty programs via mobile devices, but nearly half (49%) are unsure if their loyalty program includes a mobile app.

With an increasing number of consumers today using their mobile phones for everything from email and text messages to purchases to directions to tracking steps and even the occasional phone call, enabling loyalty program members to keep track and store their loyalty information via a mobile app may be the best option for some programs.

The keys to an effective loyalty program are simplicity and convenience to keep members using the program, generating and redeeming the rewards for renewed gratification, so that the business continues to benefit from the growing customer relationship.

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Evan F.P.

Evan is a writer, educator and tech marketer. As content director at Fluid PR Group, he helps businesses tell their stories to the world. He lives in Toronto with his wife, their son and an occasionally well-behaved Australian Shepherd named Islay. Follow Evan on Twitter

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