Consumer trends evolve and change, and so should rewards portfolios. Static loyalty programs that don’t account for changing consumer trends will have a hard time engaging current members and drawing in new ones (read: they’ll perform poorly). Successful rewards program managers not only study the KPI’s of their program data, but also look to retail trends and track changes in consumer purchase behaviors to stay relevant. It’s how to make sure that their program is offering the right rewards at the right time.
Successful loyalty programs account for seasonal sales changes, and so looking closely at consumer purchase behavior at certain times of the year can help create a direct path from points to rewards.
Change with the seasons.
Consumers spend their rewards points in much the same way that they spend their money, which changes with the seasons. Think about the times when you spend the most money; there’s a good chance that’s when your rewards members are spending their points. According to our rewards data, specific seasonal spikes in redemption include:
- January – March: the “wave season” – travel rewards programs usage increases
- March: home improvement merchant gift card reward-redemption increases
- July – September: back-to-school supplies and apparel sales increase
- October – December: the “peak (holiday) season” – gift card redemption increases
Keep these seasonal trends in mind and consider incorporating them into your rewards strategy. Offer your rewards members what they need, and when they need it, and your program can benefit from transactions your customers could be making elsewhere. Consider it low-hanging fruit.
But don’t get carried away.
Although swapping rewards has its place throughout the year, as a general rule, it’s best to limit seasonal swapping to once every quarter. Too many major modifications can cause frustration. Consider the customer: He or she makes regular purchases and collects points throughout the year, then finds your rewards catalog no longer offers the desired reward(s). It can be tricky, but you’ll want to try and strike a balance between making seasonal changes, removing poorly-performing rewards and maintaining rewards long enough for your members to save up – and cash in. Another simple way to add some seasonality to your rewards suite is to consider changing the positioning of the rewards on your site and changing your marketing messaging. Placing timely rewards front and center, where members can easily see them can be all the refresh you need.
Communication is key.
Effective rewards program managers explain the points-to-rewards process – how, what, when and where customers can redeem points. Keep that communication open with your rewards members. If you’re making major changes to your program, let your members know. If you’re adding (or doing away with) a certain category of reward, tell them.
Email newsletters are a great way to keep rewards members engaged and market new products. Thinking about adding travel or other types of rewards offerings or opportunities to earn points? Send rewards members an email or newsletter to promote new reward offerings and get them excited. Direct communication with your member base can drive just as much activity as changing your portfolio—in fact, sending them a message amplifies the change. They may not have noticed the update to your rewards suite, or that a new reward was added to your site.
Change can be good.
If your loyalty program isn’t performing well, making some seasonal changes can help encourage members to use their rewards and even drive dormant members to re-engage in the program. Seasonal changes also can be an opportunity to try new rewards offerings, like travel or experiential rewards (e.g. concert or sporting event tickets).
But also keep in mind that seasonal performance on poorly performing rewards may be just that—seasonal—and may not be indicative of year round success. Any time you do make changes, just be sure to track redemption data to see what’s working and what’s not.
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