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Good Points Blog

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4 Ways to breathe new life into your tired loyalty program

What happens when a loyalty program becomes an oxymoron – that is, it fails to foster loyalty, and without active engagement, isn’t really much of a program?  It happens.

If your loyalty program is bordering on the oxymoronic – if you’re seeing low activation, account cancellations or high breakage rates, they can be the symptoms of either a troubled program or one that might just be in need of a refresh. Either way, the goal of any loyalty program should always be increasing member engagement. Before you scrap your entire program design, consider making some of the following enhancements to help boost member activity and revitalize what could be a stagnating program.

Implement different ways to earn points

If customers are limited to earning points only by spending and spending only with one brand at that, then the bar for earning may be too high. This is especially true for brands or retailers where purchasing is seasonal, or may be a big expense that doesn’t happen very often. Allowing members to earn points in ways other than spending could be the boost that’s needed to get members to re-engage. You might consider allowing members to earn rewards for business referrals, for sharing a purchase or positive experience on social media, or even for coming in and testing out a new product.

Walgreens’ Balance Rewards program is a great example. Members of the Walgreens program can earn points not only by spending, but also by making healthy lifestyle choices like exercising, getting health screenings and quitting smoking.

While you’re at it, give them different ways to burn points too

recent study revealed that 82% of customers said loyalty programs would be better if they offered more choice and let members choose the categories of reward they wanted. Opening up your rewards suite to include merchandise and gift cards from a wide range of brands provides added value and leads to happier customers. And if you need help curating the right mix of incentives for your customer base, our portfolio could be a good place to start.

Next, make it easy to spend those points

User experience (UX) is becoming paramount for consumers as they are inundated with rewards programs. With so many choices on where to spend, user and brand experience is often the deciding factor on if and where to make repeat purchases. In fact, 33% of consumers cited the lack of a seamless multi-channel experience as a key reason behind negative social media sentiment concerning loyalty programs.

Taking an omni-channel approach is increasingly important to make sure that customers have the same seamless experience with your brand, whether they redeem their points online, in your store or on their mobile phone or tablet. The fewer hurdles to redeeming a reward, the more likely the customer will be to use them. When offering a gift card or coupon, there should be mechanisms in place that allow the consumer to redeem the reward however they choose.

If all else fails, maybe it’s time for a purge

U.S. households belong to an average of 21.9 loyalty programs, and of those memberships, only 9.5 are currently active.  Carrying those non-active members in your rewards program is expensive—sending emails, direct mail and other communications you need to stay in contact with that audience costs money to produce. If you’ve tried multiple ways to get members to re-engage, but aren’t seeing a spike in activity, segmenting your lists and removing inactive members from your program might be the best tack.

The segmentation exercise also could reveal data that shows you have a portion of your customer base that spends only during a particular time of year, or that they only make 1-2 big purchases a year. Creating a segmented group for those spenders could allow you to make a more tailored reward for those customers based on their spending behavior—for example, send them an offer on their birthday, or around the holiday season, when you know they do the bulk of their purchasing.

These days, buyers are looking for a more tailored shopping and rewards experience with brands. The traditional model of earning and burning doesn’t appeal as much to today’s sophisticated shopper. Employing one or more of these tactics could refresh a staid loyalty program and get members to re-engage.

For continued tips and news on the loyalty landscape, be sure to subscribe to our blog and follow us onLinkedIn and Twitter

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Tags: reward redemption, loyalty, rewards programs, loyalty rewards, loyalty programs

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