Mission: Loyalty — The Secret Behind Experiential Rewards

Let’s dive into the world of experiential rewards, where you can discover how to build long-term brand loyalty with the help of unique experiences.

If you ask a person about the most cherished memory they had as a loyalty program member, it’s unlikely that they would say “It’s that time I got that $10 coupon”. That’s because financial benefits are incentives that appeal to our rationality, not our heart. If you wish to build emotional loyalty by capturing the hearts of customers, the incentive you are looking for is experiential rewards. Offering experiences as rewards isn’t new, but there are definitely unexplored ways you can do it, so make sure to keep reading! It will be an enlightening experience, for sure.

Icon for the "Key takeaways" section of Antavo's article.

Key Takeaways – TL; DR

  • The role of experiential rewards is to spark emotions
  • Experiential rewards are more memorable and reinforce the buying intent of customers
  • Experiential rewards build long-term loyalty vs. coupons, which have a short-term effect
  • Experiences and coupons are both necessary for a well-balanced loyalty program
  • Experiential rewards are characterized by their emotional value, not their cost
  • There are 5 types of experiential rewards to choose from

What Are Experiential Rewards (And Why Are They Game-Changers in Brand Loyalty)

To answer this question, let’s go straight in for an expert opinion from Bernd H. Schmitt, professor at Columbia University and author of Experiential Marketing and Happy Customers Everywhere. Schmitt says that one of the most fundamental concepts of experiential marketing is that value lies not only in a product or service, but in the experience of consuming it.

Experiential rewards, as the name suggests, are all about unique, personal, and memorable experiences. Imagine that a customer who reaches the platinum tier of a loyalty program is rewarded not with a coupon, but with an opportunity to dine with a celebrity chef. Their mind would be blown! As such, the role of experiential rewards is to spark an emotion — therefore, it’s a key component for building long-lasting emotional loyalty.

For an insightful look into the curious case of experiential rewards, check out this episode of Mission: Loyalty.
Read the video transcript here.
Video Transcription

Hi everyone, welcome back to Mission Loyalty: your best – and only – connection for loyalty insights. I made sure of that…

When’s the last time you talked to a friend about that great discount you got 5 years ago?

Yeah… that doesn’t happen too often.

Discounts are transactional rewards, and they are EVERYWHERE. And they can be super-effective in the right place and at the right time! But what they AREN’T going to do is leave a lasting impression. Right?

See? So here’s today’s mission. I challenge you to come up with creative experiential rewards for your loyalty program.

But first, let’s ask: why are experiential rewards so important? Well, because people want MORE than just products and services.

They want experiences.

And who better to explain this concept than Bernd Schmitt, professor at Columbia University, who literally WROTE THE BOOK on experiential marketing.

To paraphrase him, he says that one of the most fundamental concepts of experiential marketing is that value lies not only in a product or service, but in the experience of consuming it.

INSIGHT ALERT!

Antavo’s Research Team recently did an investigation on experiential rewards: just over 65% of companies not already offering experiential rewards plan to introduce them within the next three years.

So, to get our creativity flowing, let’s look at three examples of experiential rewards.

First up? Privilege-based rewards. Think early access to sales, members-only products, and VIP customer support. These rewards are already quite popular, but are on the path to becoming mainstream… which means your customers already expect them.

The second example of experiential rewards is benefits that focus on the shopping or buying experience. This might be an extended return policy or a members-only service line. Exclusive community forums and social media takeovers can also fit into this category.

And third? Partner experiences. Airlines and hotels are well-known for employing these types of experiential rewards.

Or, think of an upscale spy store that offers free luxury hotel upgrades or exclusive dining experiences for loyal customers like me.

Building partnerships with other brands is a great way to expand your presence, and can also be a cost-effective and sustainable source of rewards, because your partners, ideally, have the same target market, but are not your competition.

Experiential rewards make your loyalty program look much more attractive, so be sure to advertise your experiences well.

According to our study, respondents that are planning to introduce a loyalty program within the next three years are ready to use experiential rewards.

Those respondents plan to introduce rewards like:

-Early access to sales

-Access to partner experiences

-Enhanced customer service or members-only services

-Tours of MI6

-Priority access to products or private buying clubs

-Members-only products

And

-Having customers participate in product and service development.

So new loyalty programs are expected to be very much geared toward product-related experiences in the years to come.

Speaking of product-related experiences, Diesel – the fashion company that went from denim to full-on successful living – makes an excellent example. They take experiences to the next level! Their tiered loyalty program, House of Diesel, includes invitations to special events, workshops, and even extra shopping hours!

And they’re serving their top-tier style-minded customers with private shopping sessions with their denim experts. Styling is such a great reward in the fashion and cosmetics universe.

Are you feeling inspired to offer experiences yet?Yeah!

So get creative! I can’t wait to see more experiential loyalty programs out there.

Thank you so much for watching today.

Ready to continue your investigation? You will find article suggestions in the description below, so check them out to learn more about experiential rewards.

And if you’re ready to learn more about Antavo’s Enterprise Loyalty Cloud, visit antavo.com to see our product videos and documentation, or request a demo of our platform.

See you next time on Mission: Loyalty.

Experiences as Rewards — Why Do Customers Love Them So Much?

Clearly, experiential rewards play a huge part in adding more value to a membership program. The secret lies in the cognitive biases we all harbor in the crevices of our minds. I don’t want to go full armchair psychologist, so here are the three main reasons why experiences as rewards are so powerful:

  1. They are worth remembering: coupons and discounts are a means to an end. That means, most likely, customers will remember the thing they bought with the coupon, but not the coupon itself. However, if the reward is a ticket to a sporting event, the reward itself (and the company who provided it) will be part of the memory.
  2. They reinforce them for buying from you: Many people would love to be seated in the front row at a fashion gala, but may not be willing to spend their money on it. If the opportunity is, instead, presented as a reward for their continued loyalty at your store, their attendance will feel justifiable — and more exciting. After all, since they spent their money on goods they wanted, the gala ticket will be seen as a gift!
  3. They give customers bragging rights: Touring the headquarters of a craft beer company is great, but telling the story on social media for all the envy of your friends is even better! Experiential rewards have the power to generate social media virality for both the customer and the brand.
A mockup loyalty program depicting how an experiential loyalty program would look like.
Experiential rewards have an excellent marketing effect: the moment customers see them, they want to enroll to find out more about these deals.

Experiential VS “Normal” Rewards – The Age-Old Dilemma

Experiential rewards are undoubtedly an exciting aspect of a loyalty program — but they aren’t the only perk. Completely abandoning traditional reward types in favor of purely experiential rewards is a mistake. Sure, experiential rewards are more exciting than any coupon, but that doesn’t mean that coupons are useless.

In reality, both of them play an important role as incentives.

  • Known as hard benefits, transactional rewards or freebies deliver instant gratification. That’s why they are so great at catching the eyes of potential new members and reactivating those dormant members, or customers at risk of churning. These types of rewards generate short-term loyalty.
  • Soft benefits, which include experiential rewards, create long-term brand love. They are usually harder to obtain or require more time to take effect.
  • A truly enticing loyalty program features both soft and hard benefits. Coupons and smaller-value rewards can be used to hook new members. Then, you can develop their lifetime value with the appeal of unique experiences, which are reserved for high-tier members.
The promotional image for the For Love or Money 2022 report, depicting the six currencies loyalty program members care about.
Certain customer groups also have their preferences. The For Love or Money 2022 report by The Point of Loyalty identified that, while personalized and experience-driven rewards are most popular among Gen Z and Millennial  buyers, Baby Boomers prefer incentives that have financial value.

The Right Business Perspective: Think “Value”, Not “Cost”

The power of experiential rewards comes from their perceived value. That doesn’t necessarily mean that your rewards have to cost a lot — but elements like convenience, uniqueness, packaging, and execution will help make your rewards feel more valuable to loyalty program members. So instead of sweating over providing free yacht trips in Monaco, think about how you can create maximum value at minimum cost. Perception is the key to great experiences.

For example, the actual cost of early access to products or sales is relatively low — you just need a platform where you can set up different access privileges for members. For customers, however, it’s a symbol of status and exclusivity. The same goes for partner rewards or influencer marketing: if you play it smart, you can strike a deal behind the scenes with a partner who will take care of either the promotion or the provision of the reward.

Master the art of balancing your budget and loyalty concept from our ebook. Download it now to learn how to account for every possible cost both before and after the launch.

A banner recommending to download Antavo‘s 'Budget Planning 101 for Loyalty Programs’ ebook

Which Type of Experiential Reward Fits Your Loyalty Program?

Although experiential rewards are already a popular part of loyalty programs today, we will see more of them in the future. Antavo’s Global Customer Loyalty Report 2022 shows that 65.2% of companies with a loyalty program plan to add experiential rewards to their offering.

But what kind of experiences best fit a loyalty program? There’s no single answer to this question. Experiential rewards are like superpowers in a comic book: each hero has their own unique abilities, which they are known for. The key to success is offering one-of-a-kind, personal, and memorable experiences that align with the interests of your customers and create a deeper emotional connection with your brand.

Looking for a guiding light for building the reward system for your loyalty program? We have the worksheet you need: it helps you organize various types of rewards based on aspects like spending limit, accessibility, and perceived value. It’s a must-have for brainstorming sessions.

Banner recommending readers to download Antavo's Reward Planning Worksheet

Of course, I can’t let you go without practical advice, so here are the top 5 experiential reward categories to consider adding to your loyalty program.

1. Privilege-based rewards

This category includes all things that make the members of a reward program feel special or privileged. Early access to new product drops or members-only sales events come to mind, but fast-food restaurants and brick-and-mortars can also include priority treatment, like express checkout or access to VIP customer service. One thing to keep in mind: you should reserve these privileges for a selected few. Not because they cost a lot but because the more people have access to them, the less impactful they will feel.

The Curator from MATCHESFASHION — Embodying exclusive treatment

UK-based luxury fashion brand MATCHESFASHION knows how to pamper their most loyal customers. The company’s loyalty program has four tiers, each one offering an increasing list of privilege-driven rewards. This includes birthday rewards, invitations to private sales, priority access to online styling services, free shipping and so on.

What puts ‘curated’ into The Curator Club’s experience? The company hand-picks certain rewards for members. Each year, customers receive two to five (depending on their tier) surprise rewards, which range from access to events and experiences to exclusive offers and gifts. This element of surprise and delight makes every single year memorable for members.

The main page of the MATCHESFASHION loyalty program.
One major thing we can learn from The Curator is that experiential rewards are the cornerstone of loyalty programs that aim to give customers special treatment.

2. Exclusive community events

Similarly impactful, but still budget-conscious, are community events. Contrary to privileges, the goal here is to let members share the experience, preferably during a live event. This can be an anniversary party in your flagship store, special movie screenings, flashmobs, or any sort of gathering where members can meet each other and mingle. Besides helping to foster a like-minded community, exclusive community events are an excellent way to find potential brand ambassadors or influencers.

REI Co-op — The perfect blend of soft and hard benefits

As an American retail and outdoor recreation services corporation, it’s no surprise that REI knows how to cater to an active community. Though the membership comes at a one-time subscription fee of $30, REI Co-op makes up for it big time. Co-op members are eligible for transactional incentives like discounts on bike services and rentals.

Even better, they offer experiential rewards. In addition to REI’s classes, day trips, and nationwide adventures, the company also hosts unique local events for the community across the country. Last but not least, the outdoor company champions the idea of noble causes, donating part of each membership fee to charity.

The main page of the REI Co-op loyalty program.
REI Co-op perfectly demonstrates that offering exciting experiential rewards is a great strategy to justify a subscription fee for a premium loyalty program.

3. Personalized brand experiences

Some customers crave special experiences where they can interact with their favorite brand, but want it to be a private event. True one-on-one brand interactions, like a private appointment with the brand’s stylist or a guided tour in the company’s headquarters, create far more powerful impressions. However, organizing this kind of experience may require a lot of planning and human resources (the stylist needs to be available for the appointments). Still, these types of interactions generate a lot of buzz on social media.

House of Diesel — Upping the ante for experience-based rewards

Diesel – the fashion company that went from denim to full-on successful living, approaches experiential rewards in a smart manner. Unlike many other loyalty programs, House of Diesel unlocks early access to sales on the lowest tier. This helps members ease into the feeling of privilege. Then, as they progress, they can get their hands on other experience-based benefits, like previews for upcoming collections, or invitations to member-only events.

House of Diesel’s main selling point, however, is the private shopping session with the brand’s denim expert. Only members who reach the “Penthouse” tier can access this unique chance. And for true brand lovers, that kind of experience is priceless.

The main page of the House of Diesel loyalty program.
House of Diesel demonstrates that letting members get a taste of the experiential rewards early can be beneficial.

4. Adventure experiences

Now we are getting into the territory of higher-profile experiential rewards. Ranging from tickets to cultural or sporting to a free day in a theme park, experiences centered around fun activities steal the spotlight. By themselves, these types of incentives can be costly, which is why it’s worth looking for viable partnerships to support your objectives. Even better, brands that are part of a coalition can lend their services to one another, creating a truly experiential offering.

BMW Inside Edge — An exclusive, perks-driven reward experience

The UK branch of international car manufacturing giant BMW has built a loyalty program purely for company car drivers. Drivers who want to become members of BMW Inside Edge must register using their license plate numbers. Once they are in the club, they have instant access to all benefits — no tiers or points required.

Inside Edge perks include free coffee and muffins at partner Costa Coffee, free movie rentals, and discounted access to learning courses. However, the most outstanding benefit thus far was a limited-edition raffle, where the winner received a ticket for a PGA golf tour event. This was a very clever move by BMW, as using raffles or other chance-based systems helps to level the playing field when you have to decide who wins a limited, high-value experience.

Watch BMW UK’s presentation to see what motivated them to create such a unique loyalty program. 

5. Luxury experiences

The top brass of experiential rewards are those that involve a luxury or high-end journey. This includes aspirational rewards like stays at exclusive resorts, private island getaways, or tickets to luxury cruises. Cooking classes with a celebrity chef or a spa treatment at a wellness retreat can also be considered luxury experiences. These types of rewards should require a significant amount of effort from loyalty program members to offset the cost of the rewards. You might require a lot of points or make it a one-time reward for those who ascend to the top of a 7-tier program. One quick tip is to stay away from raffles — that might risk cheapening the feeling of luxury.

Marriott Bonvoy Moments — Offering unforgettable experiences

If you are looking for inspiration on how to approach luxury experiences, I recommend starting with either travel loyalty programs or hotel reward programs. Marriott Bonvoy Moments, in particular, really sets the standard: they offer a huge selection of luxury and adventure rewards, ranging from culinary to sports and entertainment.

Whether you are looking for a cooking course in a Michelin-star restaurant, a concert in Dubai’s Coca-Cola arena, or a luxury stay at a Malibu villa, Marriott Bonvoy Moments has something dreamy in most major cities around the globe. The rewards come at a high cost, requiring quite a number of stays in their hotels. And while some experiences have a fixed point price, others are made available by auctions — a far better choice for luxury brands than raffles.

The main page of the Marriott Bonvoy Moments loyalty program.
Marriott Bonvoy has such an extended list of experiential rewards that they had to implement a search bar so members can find rewards that match their taste or location more easily.

Experiences Are the Currency of True Brand Love

Mark my words: using experiences as rewards will become mainstream in the coming years. But in the present, they are still a novelty that has the power to turn heads. Make sure to act before the gold rush for experiential rewards begins, and establish yourself as an innovative loyalty program before the competition does.

Already have a concept for your experience-driven reward system, but still missing the last piece — technology? Antavo’s experts are more than happy to arrange a tech showcase for you. Simply book a demo or, even better, send us your RFP.

If you are still in the process of building the concept, don’t forget to download our handy worksheet to streamline your reward planning.

Banner recommending readers to download Antavo's Reward Planning Worksheet
Headshot of Jessica Mizerak, Loyalty Program Analyst and a Certified Loyalty Marketing Professional - CLMP

Jessica Mizerak

Jess is a Loyalty Program Analyst and a Certified Loyalty Marketing Professional - CLMP, helping companies learn more about customer retention strategies, so they can launch successful loyalty programs. She has been writing about loyalty since 2016. Jess also enjoys ballet, travel, learning languages, and carrying out secret missions for loyalty intel.

You might also like

Banner for 14 Innovative Loyalty Program Ideas Blog
Mission: Loyalty by Jessica Mizerak • November 2, 2023 • 13 min read

Mission: Loyalty – Most Innovative Loyalty Program Ideas to Stand Out

Get inspired by innovative loyalty program ideas in just 5 minutes in Mission: Loyalty Episode 1 – Innovative Loyalty Program Ideas.

Antavo’s cover for its Mission: Loyalty article about loyalty program promotion and loyalty program adoption.
Mission: Loyalty by Jessica Mizerak • February 9, 2023 • 14 min read

Mission: Loyalty — Using Loyalty Program Promotion to Boost Adoption

Agent Jess Mizerak is on a mission to increase loyalty program adoption through several loyalty program promotion strategies.

Antavo’s cover for its article about finding the most fitting loyalty program technology.
Mission: Loyalty by Jessica Mizerak • January 19, 2023 • 12 min read

Mission: Loyalty — Finding the Right Loyalty Program Technology

Looking for vendors? In Mission: Loyalty Episode 7, Agent Jess cracks the code to help you find the right loyalty program technology provider.

Partners who trust us
Logo line of partners working together with Antavo. Logo line of partners working together with Antavo.

recognition

Antavo's listing in Gartner.
Antavo's inclusion in Forrester.