Loyalty program best practices: Five questions to ask yourself as you enter 2019

Whether your new year’s resolutions involve hitting the gym for the first time in a while or pledging to take part in Veganuary, January is no doubt time for reflection. With the madness of Christmas and Black Friday behind us, this brief window of peace and quiet is the perfect time to take a step back and decide if your loyalty program needs a good spring clean.

If your answer is “yes it does”, take the time to asses these five key questions, and you’ll be well on your way to nailing those loyalty program best practices for 2019:

  1. Does your program give enough back to those who use it?
  2. Does your program give members something to aim for?
  3. Does your program differentiate your brand?
  4. Does your program encourage customers to act as advocates?
  5. Does your program do the hard work for you?

 

1. Does your program give enough back to those who use it?

For too many of us, the value of a point is something we set at the outset and never revisit. But, can you be sure that the decision that you made months, or even years ago, is still the right one? First and foremost, dig into your data to understand whether the value of your points and point redemption approach will still work for your customers in 2019.

To get a good steer on this, take a look at the usage rates of your program. Observe the number of members who are actually earning and redeeming points, but also the number of points awarded and if they’re actually being redeemed for rewards.

If the proportion of points being redeemed is low, then the chances are that it’s taking too long for your customers to build up rewards. It might also be that you’re not giving customers enough opportunities to earn points in the first place.

Take a fresh look at your points value and the on-site activities you’re rewarding. One minor adjustment to the activities you reward, and the number of points you award for those activities, could majorly impact the overall success of your program.

Head to the LoyaltyLion Academy for more guidance on setting points values.

2. Does your program give members something to aim for?

The key to a successful loyalty program is giving customers something to aspire to, aside from the next reward. Does your loyalty program have tiers that members can strive to climb? If not, 2019 could be the time to introduce them as they have proven to be one of loyalty program best practices. And, if you already have tiers, does the structure of your program still work, and are the unique rewards you offer in each tier still relevant to your members?

Take a look at how many members are sitting in each tier of your program, and then consider how engaged each of those member segments are. Are they returning to purchase again, or engaging with your program in other ways? Are they actively working towards the next tier? If, however, a high proportion of a certain tier are “at-risk”, and haven’t returned to purchase or engage, it’s likely that they are either unaware of the benefits of moving up a tier, or they don’t feel that it’s attainable.

Assess the criteria of your tiers and whether or not the rewards in each make them worth aspiring to. But remember, if you make any changes, communicate them to your members carefully.

Also, consider how you might add “hidden tiers” to your loyalty program so that you can surprise and delight customers as the year goes on. This could be a great time to move disengaged customers up a tier and restart your relationship with them.

Find out more about tiered loyalty programs.

3. Does your program differentiate your brand?

Despite the continued growth of ecommerce in 2018, it was undisputedly a tough year for retail in general. With more discount days and more big high street names going south than ever before, competition has never been more fierce. No doubt your plans to differentiate yourself from the competition are already in full swing, but is your loyalty program working hard to achieve the same goals?

Take this time to do some due diligence. Do your competitors have loyalty programs and if so, what are they doing differently? What opportunities can you take advantage of to make your program stand out? Take stock also, of whether or not your program is easy to find and easier to use compared to your competitors’. Is your loyalty program featured on your home page, or as part of the customer journey? You could always be making it more obvious to your customers that you value them.

Finally, evaluate if you are taking every opportunity to remind customers why your brand is different. Use your USP in welcome emails, your loyalty program FAQs, and any other loyalty communications. Be sure to use this year to build trust with your customers by frequently reminding them that your brand aligns with their values.

4. Does your program encourage customers to act as advocates?

How many times have you been asked what you got for Christmas in the past few weeks? We bet it’s a few. This is the perfect time to make the most of word of mouth as more people have recently made purchases or received gifts from your store. Ask yourself if those customers will act as advocates and refer your brand to others.

Take a long look at your loyalty program and consider whether it’s valuable for a customer to advocate your brand. Do you incentivise members to leave product or store reviews? Do you award them points if they refer a friend to your store? Do you remind them of they points they’re missing if they don’t? Most importantly, do you make it as easy as possible for customers to take these actions? If you answer “no” to these questions, then this is a key area to focus on this year. You might want to explore our integrations with review providers to see just how easy it is to make these simple tweaks to your program.

It’s also worth digging into your net promoter score. After all, if your customers aren’t happy with your products or service, then they are far less likely to act as advocates. Start measuring your store’s net promoter score with our free Shopify app.

5. Does your program do the hard work for you?

Common misconceptions around loyalty are that programs are complex to implement, and take time to manage. If this is an experience that resonates with you, then it’s time to revisit how your program is operating. Loyalty programs don’t need to be expensive or time-consuming. In fact, if they’re done right, they can even power other areas of your business.

Ask yourself whether you are using your loyalty program in a silo, or whether it is a strategy that is working across your business. For example, are your customer service representatives empowered to award points to disgruntled customers? Are you adding loyalty information to post-purchase emails to encourage another purchase? Is your program working with your subscription business model to encourage more people to sign up to ongoing products? Consider what other areas of your business could be easily enhanced by loyalty program best practices, and build your own set of easy-to-use ecommerce tools that complement each other and make your time investment even more worthwhile.

Look also at how you could be automating your loyalty tasks to save you time. Explore tools such as LoyaltyLion’s Connector for Shopify Flow and see how you could set up workflows to bring tools together and trigger different actions so that your loyalty program keeps working hard while you focus your attention on other things.

Even though we’re only a few days into the new year, it won’t be long before this moment passes and we’re hurtling towards the next key milestone. You might not get another chance, so tick this off the new year’s resolution list nice and early to make sure that you’re using loyalty program best practices. Make your loyalty program the gift that keeps on giving in 2019, and beyond.

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