Do you want a loyalty program for your online store? Or perhaps you already have one, and don’t exactly know how to keep your customers interested and engaged? First, let me reassure you: there is nothing to fear. There are several creative ways to engage and energize customers using a loyalty program. The following five customer loyalty program tips will help you choose the right incentives to awe anyone visiting your online store.
1. Create a Sense of Belonging With an Exclusive Community
These days people don’t sign up to loyalty programs only to save money. Monetary rewards alone aren’t appealing enough: they want perks, special treatment and a great experience – and if they get it, their purchase frequency may triple.
What can really win customer loyalty is emotion. You want to capture your customers’ hearts and not just their wallets when you invite them to join your loyalty program.
Take LuisaViaRoma’s Sneakers Club for example. It’s a club that members can only enter by spending 2,000 loyalty points. High-rollers who can afford this entrance fee enjoy a position of privilege with benefits that are not available to other members, like access to the latest styles and limited-edition sneakers.
And you can do the same in your loyalty program. Just find the most sought-after product in your catalog, create a “special interest group” around it, and attach exclusive perks to the membership.
People will go nuts for the opportunity to get into this ‘VIP circle’!
2. Keep the Stakes High, But Also Attainable Through Tiers
One of the most common flaws in a loyalty program is that achieving the desired rewards is either frustratingly difficult or way too easy. The former drives away customers before they can really sink their teeth into the program, while the latter fails to maintain people’s interest – and doesn’t do justice to your business goals.
Either way, the result is a disappointment.
There is a fine line between having stakes that are too high and not high enough. Is it possible to find the right balance?
There is no set formula, so we will have to let working examples speak for themselves. At Marine Deals, the fishing and hunting online store, VIP Club customers are motivated to stay active for 12 months because of 3 things:
- If they collect 30,000 points by purchasing products and writing reviews, they can join the VIP Gold Club and enjoy free shipping.
- If they collect 7,500 points, they can earn a free $15 voucher.
- If they don’t collect enough points to reach any status and don’t exchange their currency for a voucher, their points will expire.
Point expiration is driven by both the marketing and the finance team – for the latter it’s a liability they don’t particularly like. On one hand, the sense of urgency motivates members to increase their spending volume and visit your store at frequent intervals. On the other hand, losing hard-earned currency could be uncomfortable.
In Antavo’s experience, it’s worth introducing expiring points, because the urgency encourages people to make the next purchase! To ease the discomfort in point expiration, it’s a good practice to let customers round up their points and access a reward before they expire. It’s a nice gesture, which people appreciate.
How does the motivation system work here?
- The webshop sets multiple goals for customers and also sets a time limit for achieving them.
- If the customer doesn’t participate, they may lose their points; everything is at a stake, just like in a game.
So, if you want to keep your community energized, design your program’s “stake system” consciously. There is also an opportunity to introduce loyalty program tiers, which help you to provide special benefits for the customers who have been the most active or have invested a lot in your brand.
3. Make Sure Your Rules Are Crystal Clear
A loyalty program won’t perform well if no one understands how it works. How can members earn points? What loyalty ranks can be achieved? What kinds of rewards are available?
British fashion brand Represent’s Prestige Club is a great example. It clearly illustrates:
- What the conversion rate is between money and loyalty currency (1 Prestige Point per £1)
- What other, non-transactional actions you can earn extra points with
- How the tier system works and the benefits of each rank
Never underestimate the importance of explaining the rules so that they are clear and precise. This is the absolute starting point for customer engagement.
4. Personalize Rewards Beyond Limits
The best loyalty programs have one thing in common: they know how to send personalized offers to customers based on the data they’ve collected (e.g. purchasing history, wish-list activities, personal information).
Let’s see how far personalization can be taken using Sephora as an example. Sephora’s loyalty program offers:
- Birthday gifts
- Private events
- Personalized recommendations
To unlock these benefits, customers have to collect points by purchasing products. But what’s so great about these rewards? They are engaging.
- Birthday gifts are personal! They make people happy and show that you care about them.
- Private events can build a real community, as members meet and share their experiences.
- Personalized recommendations show how much you know about your customers’ tastes and also makes their buying decisions easier.
(If you want to read more about beauty, we published an analysis of the top 5 beauty loyalty programs today.)
5. Add the Element of Fun
A predictable loyalty program can cause customers to lose interest quickly. To create more excitement, add some flair to your program with experiential rewards, sweepstakes, quizzes, challenges, and surprise gifts.
!ndigo, the Canada-based shop for meaningful gifts, does this very well.
They actually have two reward programs: one is a traditional discount affair for those who wish to make a good deal, while the other lets you earn points, get invited to member-only events, preview upcoming products, and get a bonus reward on your birthday.
The benefits of running such a program include:
- Actively engaging your customers outside the buying cycle
- Gathering more information about your customers
- Bonding with customers who might turn into brand advocates
Implementing Our Customer Loyalty Program Tips
Energizing your customers with these loyalty program tips is not as difficult as it may seem at first. You just need to provide values and triggers that your customers will appreciate, so they’ll choose your store and loyalty program instead of another.
It’s a never-ending story, yet it’s also a creative challenge. Remember, Rome wasn’t built in a day! If you need further help, check out our guide on building a successful customer loyalty program.
Zsuzsa is CCO and Co-founder of Antavo, listed by Forbes as one of Europe’s top 100 female founders in tech. After acting as Antavo’s CMO for nearly a decade, she took over the role to help the company’s clients. She is also a former journalist and has been awarded by the European Commission.