September 10, 2014

8 Effective Tips for Creating Successful Loyalty Programs


We spoke to two loyalty program experts to learn more about what it takes to create and sustain a successful loyalty program in today’s flooded marketplace of free stuff, sweepstakes, online giveaways, content unlocking, and cash rewards.

We asked BigDoor’s Director of Marketing Ashley Tate and Maritz Motivation Solutions’ VP of Loyalty Strategy Barry Kirk to share their best tips on developing and growing loyalty programs that inspire consumer loyalty without costing a fortune.

1. Offer unique rewards, not just “free stuff.”

Tate shared that, for a very long time, loyalty marketing often relied on handing out “free stuff” in exchange for a consumer purchase or action. Now, she sees more loyalty providers offering experiences, sweepstakes, and digital content as rewards. In other words, brands should be strategic in choosing their rewards, which leads to Tip #2:

2. Offer rewards with intrinsic value.

Kirk suggested that brands should offer rewards that have intrinsic value to consumers. In other words, a loyalty program shouldn’t just give rewards for the sake of giving rewards. They should provide rewards that are tailor-made for their specific type of consumer.

3. Offer gift cards and cash.

Kirk also shared that many current loyalty program members prefer gift cards and cash instead of physical items. Tate noted that this can help a company’s bottom-line as it negates the need for warehousing and shipping costs.

4. Socialize your rewards program.

Kirk encouraged companies to use 21st-century word-of-mouth marketing, a.k.a. social media, to help exponentially grow their loyalty programs. Maritz Motivation Solutions views social interaction as one of the most highly effective forms of motivation. Consequently, they encourage loyalty programs to “socialize” their loyalty program apps, websites, or other digital—and even physical—consumer touchpoints.

5. Move your brand from “legacy loyalty” to “cult loyalty.”

Kirk explained that “legacy loyalty” occurs when a consumer buys from a particular company because that’s the brand they’ve always known. Conversely, “cult loyalty” refers to a more intertwined relationship between a consumer and a company, where the consumer identifies with the brand on a deeper level, like Apple fanatics. Since the 1970s, and especially with millennials, consumers have moved away from legacy loyalty to cult loyalty, and brands and companies should tailor their rewards programs so as to engender cult loyalty.

6. Move away from dollar-backed reward systems.

In an era of rapid digital expansion, Tate suggested that loyalty programs move away from dollar-backed reward systems and use non-dollar-backed reward systems. By offering rewards like unlocked content online, companies can save on warehouse space and distribution, as well as provide almost instant rewards to their consumers.

7. Thank consumers before a purchase.

BigDoor espouses “reciprocal loyalty,” where a brand offers their thanks to a consumer before a purchase has been made. For example, a brand could discover a way to say thanks to their consumers who have spent time on their website, tweeted to them, or have taken part in an online or real-world event. Such pre-purchase thoughtfulness works to instill a sense of loyalty in a customer.

8. Listen to your customers.

Lastly, Tate espoused an age-old necessity of marketing: listening. Loyalty programs should know who their customers are and offer multiple routes for customer feedback. To create and grow a successful loyalty program, a brand must listen to its consumers and respond accordingly. When consumers know that a brand actually listens to them and actually takes action, then loyalty will increase—as will sales.

Now that you know eight tips for better loyalty marketing, learn why customers participate in loyalty programs in our recent survey of 3,000 loyalty program members.

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To learn more about BigDoor, a service loyalty company, visit www.bigdoor.com or connect with them on Twitter at @bigdoor. For more on Maritz Motivation Solutions, who have served clients in the loyalty marketing space for more than a century, visit www.maritzmotivation.com or connect with Barry Kirk on Twitter @barrykirk.

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