Thanksgiving and Christmas – the one/two punch of calories at the end of each year. (Yesss!) Unfortunately, not only are our diets sugar-laden these days, so are our loyalty programs.
I read an article earlier this year on how loyalty programs have become “more elaborate and offer more rewards and discounts than in the past.” Discounts off every purchase and rewards for ordinary behavior may energize customer spending but like all sugar-fueled energy, it is short-lived and will fade quickly. Then what, deeper discounts? Where does it end? I like sugar as much as the next person, but we need to be judicious with when and where we apply it.
Limit it with Loyalty
The performance of your loyalty program may have become sluggish, and in your efforts to invigorate it, you’re probably tempted to sweeten your program rewards. But resist that sugary allure. Loyalty programs are long-term initiatives that need to be treated as such. There are other ways to optimize your loyalty program to meet immediate needs yet keep it nutritionally balanced for energy over the long haul.
Replace it with Relevance
Loyalty programs typically deliver a cornucopia of customer information. Use it as the basis of your member communications and offers. For example, I am a Most Valuable member of a certain retailer’s loyalty program. Recently, as a “valued member,” I received an extra special offer in the mail. When I opened my invitation, I found that the savings was indeed “extra special” but the offer was not. My savings invitation was only for the purchase of “full-figured” apparel. That would be nice except for the fact that I am not full-figured. There’s nothing wrong with being full-figured just like there’s nothing wrong with being petite, but, I am neither of those. Furthermore, my shopping history should have indicated that – had this retailer bothered to analyze it. So, rather than feeling extra special, I felt nothing as I tossed the invitation directly into the recycle bin. Not the result this retailer intended, no doubt.
Use those generous servings of customer transaction history and preferences to construct special offers that are appealing to your program members. They don’t necessarily need to be sugar-coated to motivate their shopping behavior and make them feel special. They just need to be meaningful.
Pour it on Promotions
Promotions are short term initiatives, and coincidently, sugar delivers a short burst of energy, so if you’re going to pour it on something, pour it on promotions. Customer spending is lethargic these days, so sweetening the promotional pot will help attract customers and energize their shopping. Plus, sweet promotions will help you keep up with what your competitors are doing. If you’re the only sugar-free dessert on the table, guess what – the sugary treats sitting next to you will get consumed first. Understand though, sweetened deals such as 50% or more off of purchases should be restricted to promotional campaigns only.
The Ultimate Sugar Substitute
So, keep the added sugar away from your loyalty program. Instead of sweeter rewards and deep discounts, try mixing in some relevance. Just like Splenda or some other sugar substitute – a little relevance goes a long way, and the end result will be just as delicious.
Tags: loyalty optimization, loyalty program, Loyalty rewards
With all of the CRM software available, it’s inexcusable to receive an untargeted or mistargeted message.
As a loyal customer and raving fan of several businesses, I’d just like a sincere, personalized “thank you.” You can never say “thank you” enough.
Thanks for the comment, Tom. I agree that CRM software ought to be used to target messages and offers, but unfortunately one of the primary delivery vehicles today is still mass. Coupons in the newspaper — flyers in the mail. It’s one-size-fits-all — not an effective way to say “thank you, we value your business”, is it?
Your point totally hits the mark, relevance is key to creating a compelling rewards program and keeping members engaged.
Thank you Jill. I appreciate the feedback. I hope you’ll come back to visit this site or one of our related blogs on the topic of loyalty: http://www.loyaltyhound.com or http://www.loyaltystrategy.com