Consumer choice is a process that is determined through various factors. When preparing a loyalty program, you must remember to design it so that its future participants want to participate and use the proposed solutions actively. As a result, companies are constantly searching for tools that can build loyal customers. Their precise nature and the loyalty mechanics themselves are of great importance, but more so, the search for a grandiose award is the ultimate motivation for the customer. Sooner or later, the propositions you provide, even to the most demanding customers, are always met with questions about the end use of a customer loyalty program. So how do we know that you will achieve retention, loyalty, and an overall increase in sales? Is there a benefits program that will work in every case? What can’t you forget when designing your own program? Let’s find out together.
A small preface before we begin; first, we must get to know your target group and adjust to the industry in which you operate.
All big things have small beginnings:
Initially, you must ask yourself a few questions regarding what you want to achieve. Namely, by conducting some basic research into your customer base and being able to define a few basic parameters, What type of rewards are your customers seeking? What is the target demographic of your overall client base? What are the needs of your target demographic? What are the common factors and behaviors of your customer? Have previous initiatives or actions conducted in the past had a net positive or negative impact on company perception? What is the retention of your customer base, and how to expand it even further? Has customer satisfaction increased, and how to elevate it further? Furthermore, the goal you should consider the most is what pathway you and your customer base can take to find commonality and mutual benefits from each other.
Another range of questions you need to ask yourself is about the nature of the industry you operate, explicitly thinking about the pre-established notions/norms adopted so far. Although it is worth thinking outside the box and proposing new solutions to clients, it is no use trying to cause a paradigm shift if the industry does not require one. Also, it is essential to consider that not every industry can offer equally attractive rewards or choose specific reward base mechanisms. Regardless of the schemes adopted, it is paramount to tailor your program to your customer’s requirements individually.
Create options with bonuses – offer choices but also create a desirable program that stays relevant
It is impossible to tailor to every customer’s needs. Therefore, if you want to build a positive image in the client’s mind, it is worth considering a specific range of available solutions they may receive. By giving variety and operating in this way, you can influence people considering participating in the program and those who are already a part of the program but show low levels of participation.
So considering everything mentioned so far, does your program have a chance of success with the currently selected mechanics in your loyalty program?
Allow us to elaborate as we shall share our experience and prove that using tools such as discounts and target product schemes can be the right incentives, but the more-so motivation for your customer base.
Customer loyalty programs and rewards schemes – how to appreciate customers to encourage them to use the programs via discount incentives actively
While this may seem the most challenging part of rebate-based programs, they also offer a variety of rewards. How, you may ask? First of all: by setting the proper discount levels.
It is worth considering what discount percentage you can begin with and what is the highest discount you can afford. Remember that the ultimate goal is that the program will bring you profit, not losses. If you require assistance with this, Spartavita’s experts can also advise and help you create an individual strategy for you to maximize your returns.
We have successfully implemented such a strategy with two clients – BIRJU and New Balance. The mechanism used by BRIJU is an excellent example of the processes we are writing about. Participants in the program can receive discounts at four levels: 6%, 9%, 12%, and 15%. The first level is desirable enough to join the program initially, but the last level of discount is a motivating tool for the customer to stay longer and to gather more points – inevitably leading to a higher reward, but most importantly – customer retention.
Points-based retrieval program for awards – another way to entice customers
You can think about many different avenues and solutions when creating a program to earn specific products for the right points. One clear-cut way that is proven to work is to propose an exchange of points for a particular offering, moreover, a ‘retrieval program.’ Why is this worth doing, you may ask? The short answer is that if your customer joins the loyalty program, they initially want to be rewarded for their loyalty. Henceforth you also carry products and services that they deem valuable and can relate to. If you can establish and maintain this relationship by providing a steady flow of positive reinforcement to that relationship via awards, then you can only further solidify this bond.
An example of this type of retrieval program and its benefits is one of Spartavita’s customers – The Body Shop. Participants can receive valuable coupons to spend on cosmetics online as a reward for previously collected points as part of their points retrieval program. This creates a reciprocal relationship with the client and creates beneficiaries on both ends.
Why is it worth focusing on rewards in loyalty programs?
While it may seem that a good quality service or product is enough to build a customer-brand relationship based on trust, it is not enough. These excellent and lasting relationships with customers often or not require more effort and attention than one may initially think. That is why it is paramount to look at the real benefits we can give customers when preparing and creating a loyalty program that is unique to your business.
However, loyalty programs should not be perceived as simple knee-jerk gratification based on a few essential gifts from time to time. No, the relationship that the program should create is an experience where the customer feels valued in a personalized way. This, in turn, creates an association between the customer to the program and highlights its initial benefits. It can also become a distinguishing feature amongst other competitors in the marketplace.
Please contact us if you also wish to create a program full of truly desirable awards and benefits. We will help you develop the correct mechanisms and propose the best solutions to tailor to your specific needs uniquely. Our clientele speaks for themselves, and we hope that we can together create a program that you and your customers will be satisfied with.
