Ben Crudo is difference agency. Ben is an e-commerce expert on the transformation from retailer to technologist, helping retailers succeed today and tomorrow.
Don’t judge me. But sometimes what I need to turn my bad days into good ones is a loyalty program.
A few weeks ago, on an exceptionally miserable Monday, as I was leaving the house, I found an envelope in my mailbox. I saw the logo of one of my favorite brands at the return address. Recreational Equipment Inc. (or REI) is a leading retailer of branded equipment, apparel and outdoor adventures. It was $119 in the envelope.
The store where I spent quite a bit of money was a reward for my business as a member of a cooperative. No doubt I will spend that money.
All of that experience made me think about what makes a good loyalty program.
They are ubiquitous these days. From grocers and credit cards to increasingly upscale retail outlets, brands are trying to sweeten the pot with rewards, points and gifts, and there is evidence that it works. The average American household is about 17 different programs, and that number is growing. But on the contrary, people are consistently using less than half.
So, what do you offer? I’ve been privileged to work with companies that have developed great programs, and here’s what really stands out about creating something that will make people come back for more.
Don’t treat loyalty as a promotion.
it happened to you You are naively buying one when you get the pitch. “Save 10% when you sign up for our points program.” Savings may seem like a way to win shoppers’ hearts, but true loyalty shouldn’t be a marketing vehicle.
only in fact About 54% of customers They say price is essential for building loyalty to a brand and ranking behind product quality, value for money and customer service. Simply put, customers looking for deals are usually the least loyal.
Consider my experience with REI. No one pressured me to save now. I wanted to join the company because I had a good experience, and the company wanted compensation for that. This is what a good loyalty program is about. They focus on creating long-term value and rewarding the customers who give them the most business.
Compare it to the program you signed up for at checkout with little understanding of how it works, except for one-time savings. When loyalty is used as a marketing plan, the whole experience becomes cheaper.
Master the moment of introduction.
Instead of offering a deal, treat your loyalty program as a way to add depth to a new relationship.
I spent one summer traveling to a vineyard in Canada’s Okanagan region, and come back every few months for a vineyard that I’ve controlled very well.
My wife and I enjoyed an amazing dinner and fell in love with the atmosphere of the whole place – the food, the wine, the story. When the waiter came with a bill, he also offered membership in the vineyard’s loyalty program. It wasn’t rustic. I didn’t feel any pressure. It felt like a natural way to extend our experience beyond one evening. It felt exclusive.
These experiences underscore the importance of jumping into the moment when customers buy and want more. According to research most shoppers If you are offered exclusive perks, you are more likely to become a loyal customer. Once loyalty is earned, the customer Spend about 33% more per transaction.
Know who your best customers are.
Investing more in your best customers is economical in the long run when you consider customer acquisition. It can cost you up to 5x keep over. This leads many businesses to a relatively inconvenient truth. Not all customers are equal. Equalism is usually a good thing, but not in loyalty programs. Businesses need to dig deep into their data to understand the types of customers they want to reward.
Recently, our team worked with streetwear retailer KITH, a customer we have partnered with since 2019. They had a problem. Their product was so good that the bot snatched the product from the flash sale and reselled it on another platform. It was bringing down their customer experience.
So what did KITH do? They looked inside to find the best customers, looked for feedback, and listened to concerns. Together, we were able to devise a loyalty program that addresses these challenges and improves the experience.
Now the KITH site will not only be able to automatically cancel orders from bots, but will also give the most loyal customers the opportunity to purchase special offers and items. before Flash sales begin.
Because every business is different, it’s impossible to recommend a uniform program to reward the most qualified people. But one thing is universal. It has to work for your business as much as it has to work for your customers. Don’t waste time and money on low prices or overwhelm first-time shoppers. If you pay full price and find people who can feel special, I’m sure you’ll be included in 50% of the loyalty program actually used while regular loyalty cards shuffle behind your wallet.