In 1929, Betty Crocker started the first brand specific loyalty program when they introduced their box top program. Customers could save clippings from products and mail them in to receive a prize once they collected enough. When customers accrued enough points, they were mailed a catalog and could choose a reward from the items on the list.
While the basic premise of loyalty programs has stayed the same – rewarding customers for their business to increase retention – the programs themselves have changed drastically over the years.
In the 1990’s card-based loyalty programs gained popularity where customers were given a branded card to keep track of their points. Personalization emerged in the early 2000’s with businesses focusing more on using loyalty programs to collect information about their members to better market to them. In more recent years, loyalty programs changed again when mobile technology became the norm. Businesses like Starbucks monopolized on this by creating mobile apps that acted as both a mobile payment method and a rewards program.
Currently, immediacy is the biggest trend for loyalty programs. In the past, customers would have to work a long time, sometimes 12 to 36 months to earn enough points to cash in for a reward. But consumers quickly lose interest in those programs and are more inclined to invest their time and money into programs that pay-off several times a year.
As loyalty programs and consumer preferences continue to change, how can businesses ensure that their loyalty programs are not only up-to-date, but still relevant?
1. Establish Your Value Proposition
At its core, what does your loyalty program truly offer members? Think beyond rewards and savings. What are the intangible benefits that they will receive? Greater convenience? Personalized service? Stronger relationships? Being a part of a community of other brand loyalists? Inspiration through creative design or messaging? Whatever those benefits are, they will end up being some of the strongest reasons for a customer to keep participating in your loyalty program and will also form your value proposition. In an age where there are a glut of products, experiences and business competing for our attention, business need to clearly generate value for their customers. If you’re able to create this in your loyalty program, you’ll have staunch brand loyalists on your hands.
2. Offer rewards to all customers instead of focusing solely on highest-spending clients
While increasing and rewarding a customer’s spending volume is one of the top goals of loyalty programs, the programs themselves shouldn’t be focused solely on top-tier customers. With the average US consumer holding memberships in 29 loyalty programs, but only remaining active in 12, a simple message becomes clear. It’s imperative for businesses to engage and recognize their customers early on in their memberships, instead of only rewarding certain customers after they’ve crossed a spending threshold. Frequent, easily attainable rewards in the beginning motivate your customers to keep participating at higher levels.
3. Integrate your loyalty program into your overall customer experience
Successful customer experiences achieve three things: 1.) Accurately represent and communicate a business’ brand to their target audience, 2.) Provide excellent service and 3.) Create value and meaning. A loyalty program should help you better meet those goals. Give program members special access to more exclusive parts of your business, personalize communications, offers and products, build community by hosting special events for program members, or enable them to shop more often through special promotions. Stop thinking of your loyalty program as a separate add-on to your business and more as a necessary integration for customers to more fully participate in everything your business has to offer.