TRADITIONALREWARDS FAILTOAPPEAL, IT’S TIME TO REVAMPAND INNOVATE
Loyalty programs are built on the foundation of rewards Without rewards, loyalty programs don’t exist 92% of members believe rewards are a deciding factor in joining loyalty programs.
Loyalty programs have become the most effective marketing strategy for brands.The stats below signify the contribution of loyalty programs to the growth of renowned brands.
■ Ulta gets 95% of its revenue through its loyalty program.
■ Nordstrom gets 67% of its revenue through its loyalty program members.
■ Starbucks gets 40% of its revenue through the loyalty program.
The reasons behind the success of the loyalty program are varied But the bottom line is constant – better customer experience reciprocates customer loyalty
There’s no denying that customer loyalty programs have changed dramatically Especially the evolution in rewards is significant.Today’s customers don’t crave discounts or cashback
but experience beyond monetary benefits And rewards are the cornerstone of customers’ experience in loyalty programs
Scene+ has redefined the approach towards any loyalty program by offering rewards across travel, entertainment, pharmacy, and other sectors. By collaborating with Scotia Rewards and Empire, customers have umpteen ways to earn and burn varied rewards.
It’s just one example of brands stepping up to deliver better rewards instead of conventional discount-only rewards Rewards are the first motivator behind any customer joining a loyalty program Hence, optimizing rewards can have a significant impact on the overall performance of your loyalty program. Let’s understand what modern-day rewards demand from brands that can produce an appeal for customers.
1. Mix of conventional + modern rewards
The evolution in the loyalty landscape signifies a mix of audiences and varied customer expectations Aspecific audience segment still seeks conventional benefits to join a loyalty program 43% of people participate in loyalty programs for discounts or offers, and 27% participate in earning free offers.
The North Face is a perfect example. It gives loyalty program joiners a conventional $10 discount to end first-time buying resistance.Additionally, it has experiential, gamified & rewards for environment-friendly activities Creating such a mix of rewards allows the brand to attract different customer segments and extend the scope of the loyalty program
2. Personalized rewards have become a necessity
Leaning away from generic messaging & rewards is the first step toward building a market-ready loyalty program. 55% of members would use their loyalty programs more if the rewards were personalized to reflect their unique needs The pace of digitization is influencing customer behavior Customers are willing to share their data in return for personalized experiences Through loyalty programs, brands have access to first-party data, which equips marketers to personalize rewards.
Sephora excels in using data-driven infrastructure and delivering customer-centric experiences. It collects personal data & allows customers to choose their rewards. Customers can redeem their points for gifts, limited edition products, or even free beauty tutorials
Furthermore, customers redeem these rewards through mobile apps producing valuable data. Sephora uses it to craft personalized messages, offers, and rewards to boost engagement.The loyalty program results in contributing 80% of their annual revenue.
