“Should Loyalty Programs always involve points, credits or miles?” The answer is clear: “No, not necessarily”. The most common practices in terms of loyalty programs that we know, all involve certain point structures. No matter if you call it points, coins, credits or ‘miles’, the calculation behind it is based on numbers. This is easy to use and to understand for consumers. Lately, we talk to more and more companies that don’t want to work with a certain point structure. “It sounds ‘cheap’ and not exclusive enough”. So, let’s talk about other possibilities to create an extensive loyalty program without involving a point structure.
Let’s be creative and think about different kind of programs. What do you do when you have a low frequency product, with high involvement at the sale? For example: cars, bikes, insurances but also glasses and mobile phone contracts. In these occasions, it is difficult to work with points as the frequency in purchases is low. Does it mean that ‘loyalty’ is less important for this kind of companies? No. It is perhaps even more important, as there are less touch points and you do want to stay connected, interacted and engaged with these customers. Let’s try to look at the way you come to your best fitting program structure, with or without points.
For every kind of companies and business, a certain loyalty program is applicable. It is always essential not to use one program for all, so every company should approach a loyalty process and development of a program completely from scratch. Even though a company could fit a program with clear point structure, for business results it could sometimes be better to choose a different kind of setup. Here we should distinguish two sides of the perspective: (1) which activities are you rewarded for and (2) in what manner are you rewarded.
It is important to start from a business perspective when deciding about what type of behavior you want to reward. What are our company goals, which KPI’s do we want to focus on for the long term? And which activities can contribute to our business results on the short term? For all the goals there are fitting practices to include in your program, no matter if it is about sales (e.g. increased AOV; higher purchase frequency; greater total sales volume), marketing (e.g. bigger social media reach; increased traffic on the website; growth of online community) or service related goals (e.g. decrease in number of customer service cases, increase in usage digital service channel). Within this approach, it is also important to decide if you focus on one specific brand / product, or on the combination of your portfolio of brands, products and services.
To start with, there are different ways you can reward purchases:
But as mentioned before, there are many businesses that have products with a lower frequency in purchasing. In that case, we need to look at other ways to reward behavior, that directly or indirectly influence the business results. Examples of these kinds of other ways to reward valuable behavior are:
Normally, purchase rewarding sounds easier to process in terms of point, perk or benefit assigning. But these incidental rewards are as easy to include in your loyalty mechanism. Through API connections with external systems, calculations can be made based on actions that are being called. In that way, through a web of API connections and full ecosystem can be designed for the best loyalty and even customer engagement programs!
Of course, there are more creatives ideas for incidental rewarding depending on the ecosystem involved around the customer and business. Interested in discovering which business goals you can achieve with an extensive incentive or loyalty program? Reach out for a free brainstorm meeting and we’ll be glad to support you in the development of your customer engagement strategies and incentive & loyalty programs.
Next read in Part 2: Now we have decided which business goals can be touched by rewarding what kind of behavior, we need to decide how we are going to reward the customers. What is in their interest? For the success of the program, we use the outside-in, customer-centric approach, to understand which variables will drive the usage of the program and, with that, the success.
‘’I don’t give a 10, because that would mean there is no room for improvement, but I certainly give them a big fat 9, because that is what they deserve.’’
Manager Customer Service Omoda
North Africa Dreamin’
The North Africa Dreamin team is made up of volunteers from the Moroccan Trailblazers community whose common vision could be summed up in one word: sharing
Let’s have a coffee and connect real‑life. Call us at 0800-0900042 or e‑mail to email@example.com