Improving Customer Experience with Loyalty Programs

Customer-Loyalty-Program

Hello, Retailers! Welcome back from your Thanksgiving holiday!

Thanksgiving is one of the biggest traveling times of the year, with over 43 million of us busing, flying, or driving to see loved ones. This Thanksgiving Eve, the Wednesday before Thanksgiving, I was one of the few million who had to travel through the snow to get where I was going. But before I left, I needed to get gas. I spent almost twenty extra minutes driving through the traffic and snow to get to one particular gas station, even though it wasn’t the closest, or necessarily the cheapest. I was inspired to go out of my way to get to this gas station simply because I had a rewards program with them!

From big box retailers like Best Buy and Target to the mom and pop down the street, nearly 65 percent of the retail industry has invested in customer appreciation techniques that inspire brand loyalty. These techniques, called loyalty programs, include discounts, free products, access to offers and events, and other shopping perks for customers who chose to come back. We want customers not only to come to our store, but to return back time and time again. A good loyalty program can help ensure that next step.

Loyalty programs can also help build awareness and brand. Keith Smith, the CEO of BigDoor, the group responsible for the rewards programs at companies like Adobe and NFL.com, suggests that encouraging engagement outside of the point-of-sale is just as important. Providing incentives for mobile or online interactions is an important advertising tactic that will help drive revenues in both the short and long term.

According to the 2013 Colloquy Loyalty Census, between 2010-2012 there was a huge surge in loyalty program enrollment, but last year just under 10 percent of consumers were actively taking advantage of loyalty programs. The report states that this low participation rate “suggests some staleness in the value propositions of retail programs.”

So how do we build a program that turns a walk-in customer into a loyal brand advocate, rather than build a program that ends up being a waste of time and resources? By ditching the stale routine and opting for a fresh program that meets consumers’ needs. This means piquing consumer interest and meeting them where they’re most comfortable – at home and on the go.

Have fun with Gamification

Some of the most successful loyalty programs incorporate entertaining your customers. Take McDonald’s and Hasboro’s yearly Monopoly game, which consistently hits marketing gold. The game involves peeling off game pieces on some of the stores’ most expensive items to win instant prizes – anything from free fries (which brings your right back to their store) to a car or even a million dollar grand prize.

Starbucks has taken up this strategy, too. Rather than a direct game being played, they allow customers to use their mobile devices as well as their physical Starbucks rewards cards to purchase items, receive stars based off of purchases, and move up different levels of rewards.

Integrating games into your rewards programs not only will encourage customers to return, but keep them interacting with your store and products through multiple mediums. And speaking of different mediums…

Take the show on the road

As of this June, over half (56 percent) of the adult American population owns a smart phone. And nearly three quarters (72 percent) of all online adults are on social networking sites like Twitter and Facebook. Kelly Clay, a contributor at Forbes, explains that, before, loyalty programs would see customers as three different people – one in store, one online, and one on a mobile device. Clay writes, “Without this integration of in-store, mobile, and online … the customer really has no incentive for returning to a website more often than absolutely necessary.”

Instead, consumer experience experts suggest bringing special offers to each medium, fueled by engagement, rather than just point-of-purchase rewards to aid with customer experience management. Ways to do this could be through writing reviews, Tweeting about their customer experience, or offering discounts/rewards points for mobile users.

For further help and support regarding customer experience optimization, it might be worth doing some research into customer experience software that can help to streamline a consumer’s interactions with your business. To learn more go to squelch.io.

Remember that customer is king when it comes to retail. We want to turn customers into brand advocates, and a great way to do that is through loyalty programs. If you or your company has a great loyalty program tip, let us know on Twitter at @retailbound or on Facebook at www.facebook.com/retailbound

For more information about RetailBound visit www.retailbound.com or email us at info@retailbound.com.

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