Customer reward programs are powerful tools you can use to increase revenue and customer loyalty. When not well thought out, such programs fail and returns on the investment are not realized. According to data analyzed by eMarketer, the average American belongs to around 13 loyalty programs, but actively participates on less than half of them. Starting a reward program that will be successful demands that you structure it carefully. Important issues you must consider include:
How customers make progress
You will need a system that allows customers to make progress in the program, such as by accumulating points. The customer behavior that you are looking to increase should be identified, and then used to implement this. For instance, it is obvious for people to use grocery stores repeatedly. To create loyalty and encourage them to keep buying from your store, your reward program could involve the accumulation of points that are proportional to how much they spend.
You can make this process more creative. An example is making it easier to get more points when they achieve a certain goal. For instance, a basic program member can get a point for every dollar they spend on purchases, but get one and a half points per dollar if the total purchase price exceeds $150.
Important aspects about deciding how they make progress include keeping it simple, providing attractive rewards and making it easy to check how far the customer has progressed. This will motivate your customers.
The goals should be clear
Reward programs that are complicated are counter-productive; they will reduce you customers’ interest in actively engaging in the program. The program goals should be clear to your customers. In the grocery store example above, you could set a simple goal such as regular discounts when customers attain a certain number of points.
Basically, you should be able to tell your customers what they will benefit from in one or two sentences. An example of this is “You will get a 15% discount on your purchases for every time you accrue or surpass 50 points.” If you need a whole paragraph to explain the end point of any loyalty program, you definitely need to rethink and simplify it. Working with an experienced merchant services company to create and run the program is a powerful way to avoid this.
Reward program goals are usually in the form of discounts that non-program members may not have access to, free items or enhanced services. This is not all; you can also use your creativity to come up with other unique goals. You only need to make sure that they are clear and exciting.
Program advancement can be pitched as a bonus
This is an issue that most customer reward programs miss, despite the fact that it is the core of any customer loyalty program. If your program is point-based, for instance, make it clear to customers that amassing more points leads to better rewards. Otherwise, they will have no motivation to keep participating in the program. Continuously participating in the program should lead to more benefits for the customer. One basic form of advancement is offering new program members points so that they can get started.
If you want to find out how to start offering customer reward programs, feel free to talk to us at Nationwide Merchant Solutions today.