Loyalty programs are an excellent tool for retaining customers and getting new customers. The problem is that many of those customers lie dormant and do not participate in the loyalty programs once they enroll. One of the goals of implementing the loyalty rewards program is increasing sales. If that’s not happening, then your business is missing half of the action.
Recent studies have produced dismal statistics when it comes to loyalty program participation. Consumers belong to an average of more than 13 programs, but they are only active in half of the programs they enroll in.
6 Ways to Overcome Low Program Participation
Trying the tactics below could help shift passive members into active advocates — and boost your program’s performance all around.
- Make it easy to participate.
- Explain how the program works
- Show reward status
- Offer incentives
- Make customers feel special
- Ask customers for feedback
1. Make it Easy to Participate
One of the most common reasons customers do not participate in the loyalty rewards programs is that the process is too complicated. Many customers are on the go, and they do not want to sign up for things, pull out cards or visit a kiosk to get a coupon to get a discount. Some customers dislike long processes so much that they would forfeit their rewards rather than perform additional tasks. The program processes should have as few steps as possible.
2. Explain How the Loyalty Program Works
From your website to email to your mobile app, social media pages, and on-site signs and brochures, focus your communications around how the program will benefit the customer directly: what the rewards are, how they earn them, and how they can join the loyalty program.
During in-store transactions, the sales associate should remind the customer how the program works and how today’s purchase will get them closer to earning rewards. Customers are more likely to want to participate in the program if they know what’s in it for them.
For example, the Shell Go+ mobile application makes it easy for Shell GO+ members to earn and redeem points every time they fill up at the gas station. Shell GO+ mobile loyalty app makes it easy to understand how to use the program and to get value from participating.
- Convenience: No physical card – all activities are available on the application, e.g., points collection and advanced points redemption.
- Real-time Point Update: Operating on cloud technology, customers can check their collected points and payment amounts on a real-time basis or can redeem rewards instantly.
- 2-in-1 Rewards System: Shell uses a 2-in-1 rewards program, where both points and stamps are earned instantly after transactions, enabling customers to redeem rewards faster. After collecting 12 stamps when purchasing freshly made cupped drinks at delicafé, customers will get one free beverage!
3. Show Reward Status
Consumers place considerable value in knowing their current loyalty points balance — enough that it would lead to more purchases and visits. However, it’s an area where brands seem to be lacking and could improve for a quick win with customers. 18% of US internet users surveyed by 3Cinteractive in March 2018 said they don’t know how many loyalty points they have for their favorite brand, and another 52% said they weren’t sure. 94% of consumers say that timely updates on points balances would drive more purchases.
Tip: Showing customers their point totals on a receipt or a mobile app is a good way to let them know how close they are to the rewards that they desire. You also want to make it easy for the customer to redeem the points across all purchase channels.
4. Offer Incentives
You can initiate a short-term promotion with a special incentive every once in a while. For example, Southwest Airline’s Rapid Rewards members can register to participate in special promotions to earn double points (earning rewards faster) on all their purchases during a specified period.
Another way to boost program participation is by using gamification techniques. Gamification employs game elements to leverage a participant’s sense of challenge, competition, and reward to educate, change attitude or behavior, and inspire action. For example, Starbucks’ Summer Game Boardwalk is one such example. Members sign-up to play at starbuckssummergame.com or via the Starbucks App. Members earn a gameplay every time they make a qualifying purchase with the card registered to their Starbucks Rewards card. (It’s easiest if you use the app) Members collect and match either two or three-game tickets to win a prize, plus there are many instant win tickets, with the top prize being Free Starbucks for 10 Years!
Surprise and delight incentives foster brand awareness by doing things that customers want to tell friends about.
A “surprise and delight” is an unexpected reward given to members of the loyalty program to nurture the customer relationship.
Panera Bread surprises and delights members of their loyalty program with free perks like free bagels for the month or a free cup of coffee each day. Another essential element of this approach is personalization, making the customer feel valued and appreciated.
5. Make Customers Feel Special
Program participants want to feel as if they are a part of something special and get the privileges and recognition they think they deserve. They don’t want to feel like they have the same opportunities as all the other shoppers have. Forrester Research found that 59% of US online adults who belong to a customer loyalty program say that getting special offers or treatment that isn’t available to other customers is important. For consumers who regularly participate in a majority of those programs, 69% find special treatment important.
You can help your customers to feel special by giving them member-only events, offers, personalized experiences, and the like.
For example, Target offers its REDcard members exclusive access to products before they are available to the general public.
Pier 1 Imports sends emails to its My Pier 1 Rewards members inviting them to participate in member-only events like this Destination Style. These localized events create customer experiences where the customer learns how to use the product and interacts with style experts.
6. Ask Customers for Feedback
Always track your program’s participation and conduct qualitative and quantitative research to find out what works and what does not work. That way, you can tailor the program to meet more of your customers’ needs. Qualitative research will help you see the big picture of your loyalty program’s success. In contrast, quantitative research will enable you to get more detailed insight and quantify what is most important to your customers by customer segment.
Tip: Consumers are asking for more and expect programs to deliver beyond the points. Use customer feedback to deliver better customer experiences.
Updated May 15, 2020
Filed under: Loyalty Marketing