Loyalty Programs

Each store, supermarket, bank intend to make their customers more ‘happy’ with their loyalty programs.

In fact, loyalty programs are based on the same principles whether it belongs to supermarket or a boutique shop. Loyalty programs are the systematic collection of customer data in return for rewards or benefits, often used to give customer additional privileges or services to best/loyal customers.

Organizations must get serious about loyalty marketing, especially when subscription drives their revenue. By definition, loyalty is expressed when a consumer chooses your product/service when other options are mostly equal. It's a form of incremental affection whose balance can be easily disturbed.

A new way of thinking about loyalty is in the framework of gamification. After all, if loyalty is about driving incremental user action in a crowded environment, gamification is able to do that and deliver viral user growth, improved satisfaction, and revenue. In order to develop loyalty; define the grid; choose a clear and easy-to-understand action as the core of your product and loyalty effort. Think checking in or tweeting. Do not use "buy" or "subscribe" because those are outgrowths of good engagement rather than ends in and of themselves. Concepts such as "like," "comment," "argue," or "challenge" are good examples. Tangible rewards like merchandise, discounts, and cash equivalents are a default concept in loyalty program design but are increasingly becoming less relevant in the gamified world. Offer your users emotionally meaningful rewards. Think of experiences like Nike Plus and Stack Overflow as good examples of stuff-free reward models.

Obviously, many concepts that are critical to good gamified engagement aren't included in this discussion, including the importance of a redeemable point system, monetizing loyalty itself (by selling virtual items or points to third parties) and demonstrable status items - e.g. physical loyalty cards. But as with all elements of good startup design, the first step is to get the core design and iterate in an agile fashion. With Gamification, startups can give major loyalty programs a run for their money, focusing on great design, user engagement and scalable, non-cash rewards.

Loyalty programmes offer opportunity to get to know customer – that’s cost of knowledge that must be recovered. Opportunity comes from using the data- to drive more spend- personnel shopping lists. Customers enjoy being part of programmes if they get privileges of whatever value. Therefore, work hard to give them value.

HERE ARE 8 LOYALTY PROGRAM STRUCTURE SECRETS WE KNOW ABOUT:

1. Reminding The Final Reward:
Consumers always need to be reminded how close they are to a  reward. Even a coffee lover is not able  to remember how many coffees are left to the free coffee reward. Therefore brands should send catchy information messages to their customers.

2. Always Give in Advance:
If consumers cannot protect the status quo about a loyalty program and start to use it less, brands should increase their motivation by giving advances (e.x. advance stars, miles, etc..) Its a well know fact that advances will trigger consumption.

3. Convenience:
The loyalty program should be running without any interruption. This system should be as easy as logging-in a social media account.

4. Digital Media:
Nowadays consumers are always mobile. 9 out of 10 smartphones are connected to the Internet. Instead of physical cards and mobile applications; think 'gamification’ and ‘mobil’ combination in order to trigger loyalty program usage.

5. Clubs Within Program: 
Develop Clubs within the loyalty program that use knowledge gathered from grocery purchases. Create groups for key interest groups where product marketing efforts can be targeted and incremental purchase is easy to stimulate. The structure creates greater relevance for Club members and reduces cost of generating incremental spend.

6. Sales Promotion Integration: 
Data collected drives all marketing activity – it is not operated in isolation. Data should be used to target sales promotion activity; life stage, shopping habits, location etc. Customers should always be offered something extra. The biggest advantage of this structure is the greater ROI from all marketing activities.

7. Brand Loyalty Not Consumption:
Do not give reward to consumers for their purchases, reward loyalty only.

8. Personification:
In accordance with CRM Reports, privileges and campaigns should be personified in terms of segment needs.. (Daily, hourly, seasonal, product-based, location-based privileges etc..)