05 Oct Generation “why” – The impact on loyalty reward programs
The age of smartphones has increased the productivity of users and allowed them to multi task better than ever before. This also means we are busier than our parents and grandparents, with little time for frivolous loyalty programs – “why” should we join your program? “Why” should I give you my time? This generation is being called the generation “why” because of such questions. So how do we stand out to busy customers and entice them to join our loyalty program? The answer is to keep things simple, easy and quick! Here are some tools to assist you in making things easy for your members:
The first step in any successful loyalty program is the ability to truly understand your customers, their habits, thresholds and motivations. This is a precursor for all activities required to maintain a long and fruitful relationship with your customers. Track spending habits, eDM opens and clicks and send out regular surveys to understand your member base better. By doing so, we can easily discern what customers want and structure our messaging to meet their needs to communicate benefits succinctly.
Relevant Rewards and Promotions
Commodities have never before been so easy to acquire as they are today. This ease of access means that millennials are used to immediate fulfilment and therefore need to be shown immediate value in order to consider joining a program – a 2015 Colloquy study titled “Customer Loyalty in 2015 & Beyond: Are You Wasting Your Money?” demonstrated that 49% of millennials stopped using a loyalty program because of irrelevant and incessant communications. This figure is 12% higher than the rest of the population, suggesting that the future of loyalty programs lies in relevance.
Data management can provide valuable insights into what our members find valuable. In terms of rewards, members want programs that allow them to earn and redeem points easily, without the threat of points expiring. According to Directivity’s For Love or for Money (2016), the inability of the average member to earn points quickly enough to redeem rewards is the biggest deterrent to activating loyalty in customers. Ensure that all the information you provide is relevant and do not bombard your members with too many irrelevant emails!
Communication is Key
Simply offering desirable rewards and benefits is not enough – a communication strategy that explains simply what the rewards are and how they can be redeemed is essential to making more members participate actively in the loyalty program. Communicating relevant changes is just as important! One of the top reasons customers withdraw from a loyalty program is that the benefits and rewards are changed without proper communication to its members (For Love or for Money, 2016). So build a rapport with your members and endeavour to respond as quickly as possible to encourage members to communicate with you frequently and effectively. The effects of relevant, crisp and concise communication is evident inelucidate Hachiko’s average monthly Click Through rate of 19% as opposed to the industry average of approximately 2-3%.
Make it easy to redeem rewards! Although cards are still more popular than apps in a B2C environment, apps are catching up quickly. Minimise effort by reducing the number of clicks required to earn points and redeem rewards.
We can address the needs of busy consumers using the above to construct a message that clearly and concisely communicates how their needs are being fulfilled. Doing so will reduce the unnecessary distractions from the main message and will ensure that the message is communicated before the members loses interest – who can resist rewards that they would like to receive from easily completing actions they would have done anyway? Now you’ve got their attention!