Editor’s note: The information in the post is extracted from our “Loyalty: Up close and personal” report that’s all about building customer loyalty. Download your copy below:
Humans are naturally wired to strive for more and for better. As we get closer to achieving a result, we accelerate our behavior to reach our goals. Our minds are racing ahead to what the next achievement will be.
Think of your loyalty program as a way to inspire customers to reach goals. Give customers the motivation to keep spending and returning to you for a superior experience they can’t find elsewhere. Treating your members to gifts, exclusive access, and VIP treats is a trusted method of providing the aspiration and exclusivity they are looking for.
The goal gradient effect states that as we get closer to achieving a result, we accelerate our behavior. This is why a 10-space coffee card that has been stamped twice gets completed faster than an eight space card that doesn’t have any. We increase our efforts when we feel like we’re nearing a free gift or discount (such as a free coffee).
To stand out with customers, use the goal gradient effect alongside your loyalty program to start building loyalty. Regularly notify customers with point update emails that tell them their balance and the rewards they are close to receiving. This will encourage them to complete more actions to reach the finish line.
Customers have come to expect VIP treatment from the brands they show loyalty to. This can include exclusive perks, free gifts, discounts or first access to new product drops. This exclusivity gives loyal customers a feeling of status and helps to develop an emotional bond between brand and customer. Emotionally connected customers spend twice as much as those who are merely satisfied with a brand.
One study showed that connected customers constituted only 22% of a store’s customer base. However, they accounted for 37% of a store’s revenue. Their study showed that these customers spend, on average, twice as much annually than highly satisfied customers.
While financial incentives – such as sales, discounts and points – are important to customers, experience-based rewards also hold importance. Step up your loyalty program offering to provide experiences that smack of aspiration and exclusivity. These could be free tickets to events, a lottery draw for a weekend trip or even an invite to a live podcast recording or panel talk.
If you know you have a loyal customer base who hurry to your site when you launch new products or put on a sale, give them early access to these events. Make sure they know they’ve got first-look to make them feel special.
Send out an email 24-hours prior to the first-look sale letting them know they’ll first dibs on your most-coveted items.
Segment your loyalty program by adding in tiers for loyalty members such as bronze, silver, gold.
Tease the perks that you give the tier above. This will give customers a sneak peek at what’s on the horizon.
Teasing what’s available in the higher tiers encourages shoppers to keep spending so they can accumulate the points needed to move up.
The Beauty brand, 100% Pure, has a tier-based system that moves customers up depending on their purchases and engagements with the brand.
As customers move up the tiers, they get access to more exclusive, experiential and personalized rewards. For example “Pure Revolutionist” members get early access to new products and free shipping. These premier benefits tempt customers into repeat purchasing and spending more to move up into the top tier.
If you have at-risk customers who have only shopped with you once or twice, gift them a free product on their birthday. They are likely feeling ambivalent towards your brand and this will remind them of why they shopped with you in the first place.
If you have customers who prefer experiences over items, enter them into a raffle to win tickets to your next brand event. You could offer an online workshop or seminar they can watch for free (such as a make-up tutorial or an educational event on how to use your products). You could also offer first access to tickets for real-world events like retreats or workshops.
100% Pure treat members to experiential rewards not available to non-members. They send emails showing their members that they have access to seasonal sales before anyone else.
Today’s customers are goal-oriented and want to achieve results. They want their loyalty to feel valued and rewarded with benefits that more casual shoppers won’t receive.
Use your loyalty program to make customers feel special, providing exclusive benefits such as double points, free gifts or early access to sales. Create an authentic emotional bond with your customers and see your customer lifetime value increase over time.
To learn more about creating aspiration and exclusivity using your loyalty program, download the full report.
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