If you've done any research into loyalty programs or loyalty program design, chances are you've seen the claim "Keep loyalty programs simple!" But what does that mean?
Over all the basic concept of a loyalty program is simple enough: complete an action or purchase to earn points, then spend points for rewards. Easy enough. But loyalty programs today have grown beyond the basic "earn and burn" formats, partially out of a need to differentiate themselves from the competition and partially because customers today are seeking more from their loyalty programs than just earning points. What customers want from loyalty programs is an enjoyable experience that makes them feel good about what they're doing while they're doing it; whether that's earning points, redeeming for rewards, participating in games or promotions, or just engaging with the brand online.
The struggle is when brands begin to over-think program design. They discover first-hand how it's all too easy to slip from "easy-to-understand" straight into "over-complicated" when creating loyalty programs. In order to create that positive and enjoyable experience for customers, there are specific core loyalty program processes and features that need to be kept simple in form and function.
1. Make It Easy To Join Your Loyalty Program
Repeat after me: when it comes to enrolling new program members, less is always more. Any cashier who's ever asked a customer at the register to opt-in or sign-up for a program will testify that as the number of steps or information customers are required to give goes up, your odds of success go down. If enrolling into your loyalty program feels more like filling out a mortgage application, you need to revamp your process ASAP.
You can keep your sign-up process simple by only asking for the information you really need to get new customers started. Typically this is a name and email address. Maybe your customer’s birthday (if you offer something special like a discount to celebrate, this can be a good enrollment incentive), and those 2-3 items are all you really need at this point.
Getting more in-depth customer information can come later as new members complete their member profiles. Loyalty programs can serve as a great tool for lead capturing, but no one wants to share their entire life story as part of the sign-up process.
Bonus: If you’re looking to drive members to complete empty parts of their member profile (such as favorite products, address, rewards wishlists, etc.) offering free points for doing so is a great motivator. Everyone loves free points!
Make It Easy To Navigate
Have you ever gotten frustrated when trying to locate specific section on a website and either can't locate it or you have to dig through multiple webpages to finally get what you need? You're definitely not alone. A critical part of loyalty program design is ensuring that user dashboards or account views make sense and don't require a map to navigate. Key items like "User Information", "Points Balance", Transaction History", "Rewards Options", and more should be easy for the user to find.
This might sound obvious, but sometimes companies fall into a "branding wormhole" when designing their loyalty programs.
For example, let's say your company is a children's clothing retailer called Happy Frogs and you've just launched your full-fledged, branded customer loyalty program. When new users log into their program accounts for the first time, they see a navigation with links such as "Total Lily Pads", "Happy Frog Log", "Past Lake Seasons", "Frog Helpers" and other head-scratching menu options.
This naming scheme might match your company branding, but it can be very confusing for new and even existing customers who might not automatically make the connection that "Total Lily Pads" is a link to a points page where they can see their total earned rewards points. Or that "Frog Helpers" is the link to your customer service contact page.
Branding is a great method for differentiating your loyalty program from your competitors, which is why many companies make do make a point to include custom naming conventions for certain parts of their loyalty program. One great example is Sephora’s Beauty Insider loyalty program tier names - Insider, VIB, and Rouge. It's a great idea to incorporate some creativity and originality within your program. However simplicity applies here too; don’t get carried away in designing every part of the program to be so brand-specific that you accidentally end up confusing your customers.
Keep Point Earning Rules Simple
Everyone loves getting points. Bonus points, birthday points, earned points from purchases...
What they do not love when their methods for getting points is too convoluted to understand.
Customers have multiple demands on their time and attention. They do not want to have to memorize a complicated rules list for earning loyalty points. If you have multiple requirements to earn points -- these products don't qualify for points on when purchased on weekends, purchases from certain retailer partners don't count, you can only earn points for these items if you buy them in at a particular store, etc. -- your customers will quickly become frustrated at having to work around these rules. No matter how cool or amazing your rewards are, customers will disengage from your program in a flash if they can’t understand how to earn points for those rewards or if they believe that your program isn't worth the time and effort needed to earn redeemable points.
Keep your earning rules basic and have them clearly displayed where customers can easily find them. The simpler your rules are, the better off you and your customers will be.
Make Redeeming Points Simple
If customers don’t like complications when it comes to earning points, then they definitely don’t like when it’s complicated to spending points. There are two main reasons why difficult spending requirements are major problems for customers:
Firstly, to revisit a previous point, customers have limited time and energy to allocate towards their loyalty programs. Making them jump through hoops just to spend points creates another roadblock that hinders them from getting the most out of your program. If members only earn points and never spend points, that’s not a positive for your brand; it means that customers are not receiving the full value your program provides. Eventually customers will recognize they’re not getting a good return on their time and money and they’ll leave to find a better deal from a competitor.
Secondly, making it difficult for customers to spend their points causes your program to feel disingenuous. It gives customers the impression that you’re trying to prevent them from receiving those nice rewards you’re offering, even though they earned them fair and square. Customers today belong to several loyalty programs, so they know the redeeming points for rewards doesn't have to be difficult -- which makes them wonder why your program makes it so hard. Even if they love your company and products, customers won't want to stay in a program that gives them next to zero actual rewards.
Keep New Updates And Launches Simple
Loyalty program technology today has become much more agile and modular, meaning it's easier for loyalty program to scale and grow post-launch. Instead of having to wait until every imagined aspect of the loyalty platform to be designed and built before launching, brands can instead create their foundational program, and then continue expanding with new features and updates in measured phases post-launch. This is also a benefit because it allows companies to see customer responses to their current loyalty program, and then tweak their planning for future phases based on feedback and program performance.
However, brands need to also be cautious about what type of updates they are planning to incorporate post-launch. Each new aspect should feel like a natural enhancement to the current program, not a series of complete overalls. For example, if you launch your program with a specific process for earning points, and then 6 months later launch a new feature update that invalidates the existing process and forces customers to do something completely different, you risk throw off the momentum you've gained so far. Even if this new update is beneficial - maybe it creates a smoother and faster process for customers - you're still at risk of causing confusion or frustration among existing members who are already used to the former process.
And if your planned list of post-launch updates is a series of situations like the one above, your program performance will suffer. Customers will have a harder time connecting with your program if it keeps drastically changing over and over again.
This is why taking the time to thoroughly define and build your loyalty program strategy and design pre-launch is so important. It will give you the strategic foundation for your initial program build and help you create the future roadmap for incorporating new expansions as your program grows and matures. Establishing a firm loyalty strategy will help you determine:
- What processes and features are most important to building customer loyalty for your brand
- Which need to be included in the initial program build
- What formats these features should take
Knowing what type of loyalty program your brand wants from the beginning in turn gives you a stronger start. Instead of having to make a series of dramatic changes and updates post-launch, you'll be able to launch with your ideal loyalty program from day one.
Note: This point doesn't apply to situations where part of your loyalty platform is broken or suffering from repeated issues. If you need to make an update or change in order to fix a critical problem that causing performance issues, then obviously you should!
There's a lot of advice out there about the best type of loyalty program or what features really work to motivate customer behavior. In the end simplicity always wins out over everything. Customers appreciate companies that help make their lives easier, not harder, and this apply to loyalty programs too. By keeping your program simple to use, you make it easier for customers to connect to your brand, which is turns sets the stage for growing long-term brand loyalty.
If you're looking for a partner to help your craft the perfect loyalty strategy or program design, reach out to us today!