Basing your loyalty program on points may be tedious for more demanding customers who expect innovation. So what if we skip the points altogether?
Beyond points: discover innovative customer loyalty programs
Our top ideas for running innovative customer loyalty programs include:
- dynamic customer segmentation and mail automation,
- using incentives instead of material rewards,
- keeping your customers motivated by omni-channel presence and clear customer progress tracking,
- making your loyalty program mobile-friendly.
For more detailed answers, check the post below.
When you think about loyalty programs, the first thing that comes to mind are points. And that makes sense - all huge retailers follow this pattern: Sephora, Starbucks, The North Face, and many others. But what if you’re not a gigantic retail brand?
Building a point-based loyalty program is in fact an expensive investment and, ultimately, an architecture for collecting points is only the beginning; you also need to exchange the points and integrate your loyalty management software with the distribution of loyalty rewards.
In this post, I’d like to show you how to launch some of the best and most innovative loyalty programs without an extra penny spent on new infrastructure. I’m going to use regular coupons, gift cards, and customer segments to create loyalty programs that scream ‘innovation’.
Create different loyalty levels based on customer profiles
People are much more motivated to participate in a loyalty program when they see a clear goal. And if they see that it’s within reach. That’s why dividing your loyalty program into levels is a great idea to keep your customers excited. Then each customer is always close to getting some loyalty reward. What’s also motivating is that they can see what’s at the very end - the Holy Grail of sorts. Typically, it’s entering a VIP or Premium Group of customers.
Keeping that in mind, it’s important to introduce the entire loyalty program structure and send it over to every customer with the invitation to join.
How can you model that workflow without points? Let’s take a look at the idea below:
- Customer segments based on total order amount and number of purchases. The segment criteria defines “loyal” customers and divides them into different “loyalty levels”.
- Automatic distribution of personalized emails which deliver rewards such as discount coupons and gift cards.
- Each email contains a simple graphic which informs them about their loyalty level.
- Rewards have their unique codes to enable customer tracking program results.
To start with, you need to define a profile of your loyal buyer. Usually, brands take into account total spent amount and total number of orders. For us, loyal customers need to spend at least $300 to get an invitation to join our loyalty campaign. Moreover, to achieve the next levels, this initial amount needs to grow.
- Invitation to join with 20% discount on the next order: for the segment of customers who spent at least $300 in the last six months.
- Level 2: 30$ gift card – for the segment of customers who spent at least $500 in the last six months.
- Level 3: 50% off the next order – for the segment of customers who spent at least $600 in the last six months.
- Premium Group - a segment of customers who spent at least $1000. Rewards for the Premium group can be a regular 20% discount, valid for 1 year, and occasional gift cards for special dates and holidays.
You should be able to recreate this innovative idea with your CRM and email automation providers, such as MailChimp. Of course, you also need a promotion management software, such as Voucherify, to help you with generating, tracking and distributing codes and gift cards.
And all that to create innovative loyalty program that’s not only affordable, but also imaginative and effective.
Invest in coupons and gift cards instead of material loyalty rewards
The power of coupons and gift cards lies in their innovativeness, flexibility, and tracking possibilities. They can be tailored to the needs of a particular customer, wrapped into a personalized message, and finally, tracked throughout their entire lifecycle. Tracking is crucial for managing a loyalty program with dynamic levels and customer segments. You need to know if customers actually redeem their incentives, analyze order history, and get clues for future improvements.
Ultimately, every detail counts. It can be a channel, type of incentive, time limit, or even a subject line that makes one segment grow faster than others. Counting redemptions and measuring performance on each level shows which configurations work best and this is what all innovative loyalty programs need - rewards that bring true value and easily trackable progress.
Make your loyalty program an experience
The biggest challenge of all innovative and standard loyalty programs is to keep customers involved after achieving a certain level. There is a risk that your client will redeem a reward (or not) and then forget about moving forward. This is a one upsetting scenario you don’t want to deal with.
All best loyalty programs are like a gamified journey with a unique narrative in the background that keeps clients informed about where they are at the moment and where the road is going to take them next.
Partly, all of that is provided by levels. The second important thing are the right incentives. They need to be worth coming back to and justify spending more. Last but not least, customers should be kept up-to-date about their progress to the top of a loyalty ladder and the distance separating them from the next reward.
To showcase these innovative features in practice, I’m going to use personalized emails. Why emails?
"Emails that make the recipient feel like you’re talking directly to them are always a good bet. The personalized approach makes your target audience feel valued and connected while still delivering content that furthers your marketing goals and eventually, sales goals." MailMunch
Thanks, MailMunch, that’s why.
A simple graphic inside an email gamifies the customer experience and gives the motivation to move forward to the next loyalty level. Ultimately, the point of every game is to finish it, right?
Automate your innovative customer loyalty program to grow with you
Don’t even think about running a loyalty program manually. Automation is a must in any gamified loyalty program. In our example, customers spend money and join matching segments thus all levels represented by customer segments are dynamic creatures by nature.
Moreover, each time someone enters one of the loyalty segments, an email with a particular reward needs to be automatically triggered to their mailbox. That is what your system needs to cover.
Summing up, if you want to run an innovative loyalty program based on incentives different than points, your infrastructure needs to be ready to:
- Track and store customer data.
- Build dynamic segments based on total spent amount.
- Trigger automatic emails in response to customer joining a segment.
- Create personalized emails with custom design and graphics (or integrate with email provider of choice).
- Generate rewards with unique codes such as gift cards and coupon codes.
- Track every code and validate before redemption.
- Equip your rewards and program with budget-based rules, time limits, etc.
- Support more than one distribution channel to enable a true cross-channel experience for your customers.
Make your loyalty program mobile-friendly
Data suggests that 75% of consumers would engage more with loyalty programs that make rewards mobile-friendly. This includes points, discount codes, vouchers and gift cards. One of the pioneers in the sphere of mobile loyalty programs was Starbucks that allowed the exchange of ‘stars’ for coffees and other products and all that via phone.
The innovation of mobile and incentive-based loyalty programs lies in the fact that both rely on the power of impression and aim at influencing customers behaviour using interactive channels that presuppose a sense of intimacy between your brand and your most dedicated customers.
Having all that in place, you can create a truly gamified journey for your customers. It’s a myth that you have to invest in a solution dedicated to loyalty programs. The aim of running such campaigns is to distinguish your loyal and most profitable customers and turn them into faithful brand advocates. This is the very first thing that should come to your mind when thinking about innovative loyalty programs.
At Voucherify, we are developing coupon, referral, and loyalty solutions for businesses of every shape and size worldwide. If you’re interested in having a consultative talk to help you decide how you should implement your loyalty campaigns, let us know at firstname.lastname@example.org — We’re always happy to help!