Customer loyalty programs are nothing new. In as far back as Colonial America, for example, merchants used copper tokens to provide discounts to customers — a coin in exchange for a percentage discount on a suit, or as proof of membership in a group or society.
Oddly enough, customer loyalty hasn’t changed much from these early days until very recently. Grocery stores and retailers have been providing charge cards, loyalty cards and members-only discounts since the 1950s. Earning “miles” for flying boomed into popularity in the 1970s, with United Airlines paving the way with its frequent flyer program.
The modern customer loyalty program, however, is far more robust than a coin, card, or members-only discount. With changes in technology and consumer behavior, a slew of trends have cropped up. Here are some ideas for catering to the modern shopper as you develop your own company’s loyalty program.
According to a 2017 Magstar blog post, mobility should be at the forefront of your customer loyalty program design — both on the employee side, and on the customer side. Here’s how it works: with employees wielding mobile devices in store, they can approach customers and quickly sign them up for rewards programs. This helps to avoid the lengthy POS signup process, and in some cases, can be as quick as scanning a shopper’s driver’s license to extract important information.
On the customer side, keep in mind that more shoppers are using mobile devices to browse the web than ever before. This means they’re accessing your store (and their rewards benefits) through their mobile devices, so your site should be optimized for mobile viewing and navigation.
While some of your shoppers might cash in their rewards points during visits to your brick-and-mortar shop, others may only want to use their points online. Others, still, may never visit your online store but instead stay updated through Facebook. By offering members-only promotions and special rewards on different channels, you can reach more customers at different touchpoints and grow sales.
In addition, having omnichannel options helps limit frustration from the customer perspective. For example, imagine a woman who frequents her neighborhood grocery store but doesn’t use the internet. If she racks up loyalty points but is then required to register her card online, what will she do? She may reject the loyalty program, tell her friends about the hassle, or go to a competitor. The less red tape you have in place and the easier it is to build loyalty with a variety of customers, the happier everyone will be.
Your mom was right about the dangers of herd mentality: you shouldn’t do something just because everyone else is doing it. The same applies to loyalty programs. Just because a big-box retailer is using a plastic rewards card with their customers doesn’t mean this tactic will serve you best (in fact, these one-sided loyalty programs are becoming forgettable over time as more people implement them).
When you’re thinking of how you can stand out, first, brainstorm your inherent differentiators. Observe what others are doing in your industry, and imagine how you might try something different in order to stand out. Make your loyalty program seamless with your brand: it should be a natural extension of what you do, rather than a hassle or something forced.
For example, grocery chain Hy-Vee provides shoppers with points to use toward fuel purchases at participating gas stations. It works because many Hy-Vee shoppers drive to the grocery store — meaning they’re using vehicles (and fuel) regularly. However, if Hy-Vee instead offered points to use toward purchases at a nearby restaurant, this would only appeal to a few people. It wouldn’t fit the Hy-Vee brand identity.
Keep it in line with your goals.
According to Moe Min, VP of online sales and marketing at Wells Fargo, customer loyalty programs fall into one of two camps: either they reward organic purchases (like “buy 9, get the 10th free” punch cards), or they drive purchase volume by encouraging purchases beyond what they normally would have made.
Each type has its pros and cons, but the type you choose depends on your goals. If you want a loyalty program that has demonstrable ROI, a punch card won’t cut it — but a digital version may be exactly what you need.
Modern loyalty programs can be customized endlessly depending on your company and its needs. From gamification to rewarding customers for dwelling on your website, technology has opened up a whole new world of customer engagement opportunities. If you’re ready to map out a strategy for your first loyalty program, choose an eCommerce technology consultant with experience working with your type of business.