How Does a Customer Loyalty Program Work?
- 1. How does a customer loyalty program work?
- 2. To understand how, we must first understand why. Why do businesses want loyalty programs?
- 3. Why? • To retain curren customers and channel partners • To set themselves apart from the competition • To motivate customers to perform long-term or short-term tasks
- 4. Bonus benefits of customer loyalty programs: • Increased brand reputation • Increased brand awareness • Better customer experience • Promoted brand values
- 5. How do they acutally work? How do customer loyalty programs accomplish all this?
- 6. How? 1. Program participants see an opportunity to earn something. Does the reward appeal to them? Different demographics have different interests and priorities. When determining which rewards people want, keep into consideration their: • Generation (Baby Boomers, Millennials, etc.) • Role (Where are they in life/career?) • Culture (What is their lifestyle?)
- 7. Generation
- 8. Role
- 9. CUlture
- 10. How? 2. participants alter their behavior to earn a reward. Some common rewards offered to participants: • Online reward points redeemable for merchandise in an online rewards catalog • Recognition/praise • Cash - CAUTION (see next slide!) • Gift or debit cards • Event or trip
- 11. Participants either see value in the reward and are motivated to earn the reward again, or they don’t see the value. How to make sure it’s the former, not the latter: Offer non-cash rewards People unconsciously prefer non-cash rewards even if they say they prefer cash. Don’t offer the same rewards every time. Separating rewards into categories increases participants’ effort - they don’t want to miss out. Deliver the reward the right way. The perfect reward poorly presented would have half the impact.
- 12. How? To function in the long-term, the loyalty program must: • Have objectives and goals tied to your organizational objectives • Have clear, consistent rules • Deliver regular information and updates to participants through the right communication channels • Feature reports and analytics to help determine the program’s effectiveness 3. the loyalty program has a system.
- 13. 1. Program participants see an opportunity to earn something. The reward appeals to their unique personality and interests. 2. participants alter their behavior to earn a reward. They see value in the reward and want to earn it again. 3. the loyalty program has a system. WIth proper participant communication, clearly laid-out rules, and measurement of the program’s success, it operates effectively. Add it all up and what do you get? A loyalty program that works!
- 14. 800.844.5000 2299 Perimeter Park Drive, Ste 150 Atlanta, GA 30341 http://www.loyaltyworks.com/