If there’s something the 21st century has taught us, it’s that one-size-fits-all solutions simply won’t cut it anymore. With the rise of the ‘unique consumer’ who wants everything to be super-personalized and hyper-relevant, companies — brands especially — need to custom-tailor their customer retention strategy to fit their own unique needs better . And the best place to start is designing a consumer-facing brand loyalty program that embodies everything your business stands for.
What Do Brand Loyalty Programs Look Like?
In my previous article from a few weeks ago, I laid down the foundations of a thrilling reward program for retailers. It’s time to flip the coin, though, and summarize the characteristics of a successful program for standalone brands.
In short, brands are in a peculiar position. Unlike retailers, they’re already differentiating themselves due to their line of products or services. It’s the infrequent purchase frequency that causes them a headache.
Most brands aim at gaining relevancy by engaging customers and driving word of mouth. Brands loyalists not only have a higher CLV but also build aspiration in others, which is a powerful motivating factor.
- Get your name out: Brands differentiate themselves by nature: therefore their main aspiration is to reach as many people as possible. Due to this, their primary focus is on building advocacy.
- Customer advocacy requires long-term engagement. Because of that, brands motivate customers to consume content and engage with them on social media to generate hype and word of mouth.
For a more detailed breakdown on the best practices for brand loyalty programs, check this episode of Customer Loyalty Minutes, starring Zsuzsa Kecsmar, Co-founder and CMO of Antavo, and Jörn Roegler, VP of Strategy & Insight.
So let’s count down the top loyalty program strategies for brands who wish to give back to their customers.
1. Self-Assertion Through Partner Retailers
Retail stores are an important platform for most brands, but third-party sales make it almost impossible to engage with customers and enroll them into a loyalty program. But you can bridge this gap with any of these approaches:
- Scanning Product QR codes: Associate each product with a unique tag that comes in an attached little sachet. Customers can scan the QR code and be redirected to the loyalty program’s landing page, and even receive a small reward.
- Receipt upload: Ask customers to take a photo of their purchase receipt and upload it at a given link to prove their purchase and earn benefits.
- Product codes: Add a special note containing a unique product code inside the product packaging. After scanning the code and registering, customers can unlock exclusive benefits.
- Photo contests: By scanning the attached QR code, people can enter a photo contest. Those who upload their photo posing with their purchase have the chance of taking home the grand prize.
Employing any of these tricks promises substantial benefits. Other than enrolling new members, brands receive UGC, drive word of mouth, track purchases, change purchasing habits and foster a sense of gratitude among customers.
2. Personalization Redefined
Personalization is a double-edged sword: according to the Loyalty Report 2019 by Bond, 8 members out of 10 are dissatisfied with the level of personalization in their loyalty program. But the same report also states that when done right, personalization contributes to a huge uplift in customer spend, retention and engagement.
Loyalty programs by their nature help marketers solve the personalization challenge by adding touchpoints where customers can generate content or share information.
For instance, email communication is made more personal when adding loyalty-related information, such as tiers, or the number of points currently available. Doing so also creates an urge in the reader to act upon the unused benefits.
Another way to enhance personalization is to use Gamified Profiling to learn about people’s preferences, values, personality, spending habits or fashion style. All of this information can be used later on to make the marketing activity more relevant.
3. Rewards That Are Memorable
Gifts, benefits, and incentives are what make the world go around. Yet we see very little imagination in the industry, as companies usually stick to discounts and coupons.
There’s a logic in it because 61% of customers rely heavily on discounts to this very day. However, transactional discounts become a hygiene factor where competitors with bigger budgets can easily top your offers.
Moreover, markdowns cannot be “branded”. In other words, price cuts won’t remind people of your brand, unlike gifts and rewards. You don’t have to think big: little freebies such as a lipstick or even an engraved pin can put a smile on people’s face. And they’ll no doubt tell their friends about it.
At the other end of the spectrum are VIP rewards. Benefits like these include an invite to a delicious cocktail party or a weekend in a wellness spa. Naturally, only a small segment of the members are entitled to such luxury, but those who earn it — either by winning a contest or being a top spender in a high tier — will never forget the experience. Plus, the allure of a VIP reward might inspire others to increase their purchase frequency.
4. Hook Customers With Gamification
Gamification is like chocolate: in one way or another, everyone loves it. Adding game-like elements to a loyalty program revitalizes passive members and has a positive effect on acquiring new ones. There are a number of ways to gamify the experience:
- Announce a contest: Promise a high-value reward and let members submit anything that drives your KPI – music, design ideas, video, photo, etc. The selected judges then decide on the winners.
- Create sweepstakes: Participants who purchase the lottery-like tickets with their points have a random chance to win something big. The more tickets they purchase the better their odds.
- Add challenges: Drive long term commitment and foster repetitive behavior to reach your business goals. Challenges also represent social status, and people can brag about their achievements on social media.
- Introduce voting: Gain valuable feedback by encouraging loyalty members to vote which product or feature they wish to see more of.
- Introduce a Prize Wheel: Similarly to sweepstakes, people can buy tickets to spin the wheel in hopes of winning something. The difference is that the prize pool, in this case, has both small and large gifts.
81% of participants engage with game mechanics if available. And unlike chocolate, people won’t get full of them – Loyalty Report 2019
5. Boost Social Media Engagement
Social media plays a pivotal role in today’s marketing communication, which is why you should absolutely reward customer engagement on Facebook, Instagram and Twitter, as well as maximize the effectiveness of referrals.
First, drive traffic to your products or seasonal landing pages by offering bonus points for sharing them online. Also, build credibility, reputation, and trust by incentivizing people to follow your social profiles. Doing so gives you the option to communicate with members in different ways, other than email.
The next step should be riding the waves of buzz marketing and harnessing the power of referrals. Members are more than willing to refer their friends and family members if there are rewards on the line.
The same goes for influencers. Offering a commission after successfully referring a customer inspires them to be more proactive when promoting the brand. As for their followers, they feel exalted for receiving exclusive benefits when clicking on the influencer’s dedicated URL.
1: Renting Tech in Retail Showrooms
This last part is more of a prediction that we started to see already out there. Still, the topic involves a trend that might gain traction in the future, so better keep an eye on it.
In short, Toys”R”Us plans to make a comeback. But here’s the twist: instead of setting up a traditional store, the toy retailer transforms its locations into spectacular showrooms. The company intends to collect money from brands who’d rent a section within the store. In exchange, manufacturers could display their goods in a high-profile environment and access the retailer’s tech, insight and data.
I can easily see this practice will become common in the future. Brands would receive free reign by renting a spot in an illustrious retail environment, and use the store’s reputation to boost acquisition rates.
This way you could also showcase your personalization and gamification prowess for a local audience. Last but not least, it’d be the retailer investing in technology such as POS integration, which you could rely on to make your omnichannel strategy complete.
Future-Proofing Your Brand Loyalty Program
As you can see, there are almost limitless possibilities to tailor your brand loyalty program in a way that it’s not only appealing for the customers but also drives your KPIs.