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Cara Panosian : 06/08/22
When a loyalty program is solely focused on rewarding transactional behaviors they are missing out on the chance to build real long-lasting customer loyalty. When a program is focused on building relationships (relational loyalty programs) it is important that they reward the customers for their engagement and behaviors outside of the buying cycle. Brands who make their program engagement based are more likely to have a successful and long-lasting program.
The first step to making sure your program is focusing on the right strategy is understanding the difference between Transactional & Relational Loyalty Programs.
Transactional loyalty programs focus primarily on customer interactions that are transaction-based: purchases, earning, redemptions. They’re more traditional and easier to manage due to their one-size-fits-all approach because the only time the members are actively engaging with the program is when they’re spending money which makes what they are able to achieve slightly limited.
Relational loyalty programs utilize a more well rounded approach to growing customer loyalty. This promotes a more emotional connection between a brand and customer. Similar to transactional loyalty, they reward purchases and transactions, but they also prioritize providing value outside of the buying cycle through not only engagement but also experiences. Relational loyalty programs focus on building and nurturing customer relationships using personalized experiences, promotion shared values, tailoring rewards and offers, and other tactics.
Here are some things to take into consideration if you have a transactional-based loyalty program:
Once you decide to make the change towards an engagement-based loyalty program, here are 5 things you can do to see your loyalty program grow:
It is important that you go into this change having a game plan. Knowing whether you want to drive more traffic across the brand sites or social media accounts. Do you want to collect more product reviews or referrals? Would you like to increase customer participation in brand-hosted events or activities? These are just a couple questions to ask to know where to get started. Having these goals clearly listed helps to then identify or come up with ideas for driving engagement in your loyalty program.
Allow them to attach social media handles to their member account
People are posting on social media very frequently so if your customers are able to earn rewards while doing something that is already in their routine it is more likely that they will utilize it.
Utilize gamification
You want your customers to enjoy their experience with your brand, a great way to do that is to make it fun! Turning things that are normally boring and mundane into an exciting experience will make your company stand out from your competitors and keep the customers engaged.
Host member events
Making your members feel like they are a part of something exclusive is important. If you are able to host things that are special to the members then it is a chance to thank them for their loyalty to your brand. REI is a great example, they offer in person and online events specifically for their members, discounts on classes and day trips, and exclusive gear! Who doesn't want to get discounts and new products just for being a member?
Incorporate partner programs
Teaming up with other brands is a great way to market to a different audience. Throwing an event with different companies will get your name out to people who might not have heard of your company but also expose your regular audience to a new brand. Some examples could be an art class paired with a wine tasting or a workout class paired with an athletic brand. Both brands have their own audience but they work well together to create an even bigger one.
It is important to encourage all different types of engagement so you can offer different bonus points, free gifts, achievement badges, etc in return for customer engagement. Sending thank-you emails or badges when a customer posts a product review or is giving referrals is a great way to show your appreciation to your members.
If you do not have clear communication with your customers it is unlikely that they will stay a customer long. You need to make sure that you are very clear on the benefits of engaging with your program and what that will get them in return. Make sure they know their reward options, status increase, and that they have access to exclusive opportunities.
It is important to make sure that your customers can always track their progress but also make sure that you are able to monitor and measure your efforts. You need to establish which KPIs or metrics you want to track so that you can identify what is working for your program and what isn't so you can adjust accordingly.
While it seems daunting to change from being transaction-based to being engagement-based, it only takes a few changes and you will quickly see the benefits that those changes offer. This information and these 5 steps are just a couple of things that will help you get started on this transition.
Want to learn more about how your company can make this transition? Reach out to us today and we would love to help you get started!
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