5 Essential Questions to Ask Before Running a Loyalty Promotion

The simplest of questions have the most complex answers. Running a promotion can be exciting, but don't let the nerves distract you from putting in the grunt work. Make sure you have clear and concise answers to the following questions before launching any type of program.

Question one: Is your budget healthy? 

This question often follows any good idea, most definitely killing whatever vibe the creative department was trying to manifest. But, alas, money is a factor when investing in the relationship between your brand and your customer. 

"Earn and burn" programs are losing steam. These traditional programs are high-maintenance, causing them to be expensive and exhausting. Alternative methods are not always cheaper; however, businesses must get creative, finding more than one way to offer points and rewards. Customers want to buy from brands that make them feel like an individual, not just a transaction.

"It's no longer enough to win on price or product quality alone — trust, great shopping experiences, and excellent customer service are an even more valuable currency among today's shoppers." (Yopto)

A healthy budget can transform a junky honors program into a creative and engaging experience. Of course, no business is looking to spend more money than they have to, but developing, running, and promoting a strategy-based, award-winning loyalty promotional campaign is a big ask for your part-time social media intern. A thoughtful, effective program requires a thoughtful and efficient budget. 

86% of U.S. shoppers said that a loyalty program influences them to buy again from a brand, and 44% of U.S. shoppers said that a loyalty program highly influences their purchase decision. (Yopto)

Question two: Are your goals consistent?

The health of your budget may be subjective, but promotional goals must be objective. What is the problem you are trying to solve? What are you trying to achieve by running a promotion? The more specific your answer, the easier it is to find an effective solution. The individual needs of each end user group must be understood. 

Problem: People don't trust our whitening toothpaste.

Why don't people trust our product? How do we collect more product reviews? Should reviews require photos? Are we looking for referrals? How can we increase customer participation? What kind of events should we host? Who can we collaborate with? 

Niche, industrial businesses don't share the same goals as household names. Niche brands depend on innovative promotions that communicate a more personal message, building brand awareness. They should implement customizable features representing brand tone and voice- creating a memorable experience promoting brand image. 

Comparatively, many large corporations need assistance managing their program accounts for a larger target audience. Their goals benefit from program features that control traffic, driving and directing users towards buying and sharing.

Question three: What is your timeframe?

Your timeframe has to make sense of your product. Sales and clearances are product based. Similar brands run similar promotions during similar seasons. Seasons influence trends, controlling supply and demand. The demand for bug repellant and allergy medications increases during spring. Tech brands run back-to-school deals featuring the newest laptop. Gift wrap does best in the winter. 

Off-season promotions are a great time to develop the brand and consumer relationship in pursuit of loyal customers who will stick around during the more competitive, peak seasons. 

X% of U.S. shoppers are most likely to participate in an X brand's loyalty program:

• 76% food & beverage
• 66.2% fashion & apparel
• 55.4% beauty & cosmetics
• 55.1% consumer electronics 
• 31% home electronics

(Yopto)

Question four: What kind of rewards are you looking for? 

Make sure you are offering rewards that your customers want. Incentive and reward programs work best by providing customers with "soft wins" and high-value rewards for each tier of the customer. If the only valuable rewards cost an arm and a leg, you will discourage customers from participating. 

Ensure that the rewards you offer are relevant to your customer base. For example, if your rewards catalog only targets one specific type of buyer persona, then you risk excluding all of your other types of equally valuable customers.

Question five: How will you spread awareness?

76% of people report their loyalty to a brand is impacted by the opinions of friends and family, while paid celebrities and influencer endorsements only impact 44%. (Clarus Commerce)

We all buy the same peanut butter brand our mother does. We trust our communities to share and support brands that have similar, like-minded values. That is why user-generated content is so important when building awareness. 

Several loyalty program member communities started on social media platforms like Facebook, Twitter, Instagram, and others. You can create social media campaigns and let loyal members earn participation points, such as posting to a specific hashtag or a comment. In addition, you can give members the option to link their social media handles to their membership profile to earn points and make it easier to participate in future promotions down the line.