Category: Loyalty Industry News

The Rise of Micro Rewards

You’ve heard of the jet-setting rewards, the big showy incentives and the treats that big business use but what’s available to the time poor or cash strapped SME? Introducing the biggest trend in rewards  – Micro Rewards.

These are the bite sized ways to say thank you that don’t take chunks out of your budget and come with smart analytical packages that pinpoint ROI where you need it most and smart, millennial proof delivery options.

We caught up with Jill Goldworn, co-founder of the company behind the SaaS Enterprise level platform, thefirstclub.com, the leading worldwide B2B digital Thank You Company who think rewards should be open to everyone so you can see if Micro Rewards are right for you.

 

What are micro rewards?

Micro Rewards are low cost, high value snackable rewards allowing Brands to say thank you easily and often to anyone. New customers can be rewarded with an instant download from the first purchase and high valued customers can be engaged throughout the relationship with Surprise and Delight digital rewards based on Brand goals, and employees for engaging in successful activities.

 

What types of business utilise micro rewards?

We have Clients such as Wells Fargo Bank and InterContinental Hotels Group who use our millions of choices of music, movies, games, e Books and eMagazines integrated into their respective loyalty program redemption choices. Other Clients such as FedEx use them to say thank you for completing surveys, watching videos or as an anniversary bonus; and yet others who understand that Customer Service is not a department but an attitude and thus reward customer service operators in call centers to encourage desired resolution of customer queries.

 

Are these internal or external, or both?  

Loyalty should be a cohesive strategy within an organization, we share with our Clients that their employees are their most important customers and they should be rewarded with the same loyalty program to both reward and help employees better understand the value proposition, and as such our platform is well suited to be used internally as part of the existing program or externally on thefirstclub.com as stand-alone solution.

 

What problems do you see in the reward and loyalty space ?

When we launched thefirstclub.com in 2009 it was to fit a need for Lightspeed Research a company who wanted to offer digital downloads as an incentive to inspire consumers to complete surveys. They had tried high end rewards, but as in most programs it takes the average user 2 ½-3years to earn enough points for a $300 airline reward, and a high value user 9months to -1 ½ years, so they suffered with a high degree of churn. With instant digital downloads their customer could be rewarded from the first survey and so the number of surveys completed rose a dramatic 50%. Over time we migrated Clients previously using physical rewards to adopt digital and added many more categories to the site to encourage repeat visits such as eBooks, games, eMagazines, software mobile apps and games and more recently movie streaming and next month gift cards so we now have compiled the most robust digital entertainment reward category in the industry delivering 60 million choices to most any device worldwide and translated into 14 languages. Now with the rise of mobile usage for purchasing, reward redemption and researching the competition becoming ubiquitous, it is even more important for Brands to institute engagement strategies to reward the customer from the very first purchase and nothing does that better than instant micro rewards.

 

What trends are you seeing in the space?

Our goal is to connect Brands to their customers passions and nothing does that better than entertainment content…music is still the most popular choice followed evenly by the top-selling PC games, streaming movies and current eMags. One of the important drivers is choice….from the latest content releases from all the major Labels to excite the Millennials and the classics for the Baby Boomers. And the fact that we share the redemption data with the Brands, thus allowing them to understand their customer’s passions in order to suggest more targeted offers to provide deeper engagement.

 

Are the same rules of reward still at play?

Yes – choice is key – we offer a wide range of what people want including millions of music tracks from all the major Labels, the top-selling games, the most popular eBooks, largest variety of eMagazines ( single download or subscription), mobile apps (free and paid) , productivity software, and popular movie streaming – all instantly redeemed onto most any device — PC, Mobile or Tablet

 

What have traditional rewards platforms overlooked?

One of the primary reasons people are not active in the loyalty programs they join is it takes too long to earn rewards and Brands tend to focus on the most valuable 20% of members. So what’s needed are strategies to help a new member embark on the journey to become a most valued member. We help by using digital entertainment to reward social media posting activity, gamification by giving random rewards and because our solution allows for redemption from the first purchase it’s a strong driver to hook a customer early and keep them active. Members in programs using our digital reward solution come back to the site an average of 17X per year to redeem rewards thus spending more and having that Brand become part of their every day lives and growing into a high value member.

Where are your energies going and what’s next for you?

We are looking to the future and are focused on the release of an improved interface of our customer service community, which will provide a more holistic view of user data, allowing for a better understanding of consumer behavior and passions to better engage with them on a deeper level.

The implementation of the first AI (augmented intelligence) features will be added to our Core customer service tool to allow the Client to see the customer in a wholistic way and cool features to thefirstclub.com to recommend the most suitable rewards based on customer desires. We will continue to expand our catalog with more desired content such as gift cards, and enhancing the mobile experience to engage our Clients customer even further.

5 must haves for loyalty in eCommerce

3 Missed Opportunities in Customer Loyalty

by Michael Greenberg

Customer loyalty is an incredibly lucrative opportunity for brands, yet marketers still struggle to maximize their relationships with existing customers even though recent research from Forrester shows that 93% of companies have placed customer experience on their list of strategic priorities, with 28% claiming it as their top priority.

Clearly brands understand the value of each customer, yet there is a disconnect between knowing what customers need and want and the ability to actually deliver in a way that creates an experience that builds long-term loyalty. Recent advances such as runtime modeling, location-based services and the increased use of smartphones as shopping devices have greatly improved marketer’s capabilities to deliver exceptional customer experiences by anticipating customers’ needs in near real time.

Lasting loyalty is built on three basic strategies: acquisition, retention and engagement. Here are three commonly missed opportunities and how brands can best address the needs of an increasingly mobile and connected customer to foster loyal and lucrative relationships.

  1. Acquisition: Connecting on a customer-by-customer basis

    The classic CRM approach of defining segments, setting up automation based on those segments, then watching for certain things to occur and responding is still the right mindset. However, marketers’ models and understanding of non-transactional behavior and the whole context of the customer interaction needs to come into play. It’s no longer good enough to know that someone has bought a particular product in the past. Marketers need to move beyond basic segmentation and start looking at: How do I construct models that I can calculate on the fly? How do I estimate lifetime value or potential? Marketers need to be able to do these things in very short periods of time—in milliseconds as opposed to minutes.

    Marketers have a very short window to change the experience for customers, get the right products in front of them, and show what offers might be relevant to that product. Armed with that knowledge, marketers can change the experience on a customer-by-customer basis, adjusting the product, pricing and offer and content that’s relevant to the individual. For example, if you know enough to predict a high lifetime potential for a customer, you should be much more willing to spend more aggressively to acquire that customer—whether through discounts, human follow-up or differentiated service.

  2. Retention: Nurturing a higher-value relationship

    What are the pathways to higher value relationships? Marketers may be able to identify and correct misallocations of capital around email, direct mail, website, SEM or elsewhere. Yet when a customer is in front of you, engaged right now, how do you best take advantage of that slice of attention you are getting?

    In many cases it’s smarter to think in terms of the longer-term customer relationship, instead of focusing on maximizing the immediate transaction to do a better job meeting your customers’ immediate needs. For example, by waiving shipping charges (which reduces revenue but increases customer satisfaction), extending a reward certificate past the cancel date, or sending your tier two support to handle a Twitter complaint (instead of tier one) for an elite customer. Treating elite customers as average is a missed opportunity. Treat these customers differently to gain their loyalty with an eye on the long term relationship.”

    While operating in this mindset may mean less revenue in the short term, the revenue brought in over the life of the customer relationship can more than make up for it.

  3. Immediate engagement

    Marketers need to think about the same things they’ve been thinking about in marketing for a long time, but frame them in a different way. Don’t miss the opportunity to learn more about your customer at interaction points.

    We know that 50% to 70% of purchasing decisions are made on the spot, while the customer is standing in a store. So how best can marketers tell when they are there and influence a purchase decision at that very point in time? Mobile applications are getting much better at using geofences to know when a customer is near or inside a location. It’s only a matter of time before customers expect real-time suggestions, coupons, or other notifications during their shopping experience. And when a customer raises their hand and interacts with your mobile app directly, they’re primed to share more information that will let you serve them better, now and down the road.

 
So if you aren’t actively engaging at these kinds of moments, they become a lost opportunity for cross-selling, upselling, targeted offers, surprise and delights, or any of the other small opportunities that may add up to large changes down the road.

The world is changing to a much more mobile and social-centric view; the way customers interact with brands has changed and very few companies are actually keeping up. The shift to mobile has taken a lot of companies by surprise; mobile has gone through early adopters—early majority and late majority—so fast that everyone, including your grandmother and your five-year old nephew, is interacting via mobile.

Learning to steer customers through all of the various small touch points, to guide them from their current value to their potential value as a customer, is an opportunity marketers can’t afford to miss.

Original document from Chief Marketer.

“Loyalty Cards Don’t Drive Loyalty,” so what does?

This post is in response to “Loyalty Cards Don’t Drive Loyalty” by Colin Shaw.

How many loyalty cards do you have in your wallet right now? I just counted the cards on my keyring. I have thirteen. Thirteen! That seems like a preposterous number. I certainly don’t use every card on a regular basis, so what distinguishes the cards that I use from those that sit abandoned on my keyring?

According to Colin Shaw in his post, a loyalty card does not guarantee a customer’s loyalty. A study by The Logic Group reveals that, while 62% of people surveyed belong to a loyalty program, only 23% think it makes them more loyal to a brand. The difference, according to Shaw, is the discrepancy in how customers and brands view a loyalty program. Customers view loyalty cards as an extension of a brand’s offering, not an extra incentive.

As a brand, a “loyalty card” is a program that will create customers that are loyal to your brand – that is, they return again and again over your competitor(s) because they are part of the program. Shaw says this about loyalty cards:

“Loyalty cards are perceived by companies to build loyalty from the customers that use it by providing additional benefits to the possessor while reward cards are meant to incentivize behaviors.”

So what’s the difference? A loyalty card does NOT secure loyalty from a customer to your brand. It does, however, provide a gateway for you to engage with your customers on a consistent basis. Adding a loyalty program is not an automatic fix that will suddenly draw flocks of customers that will stay with your brand forever. It does give new and returning customers a reason to use your service, and provide a window for you to get back in touch with them.

How do customers want to be engaged and rewarded? According to a 2012 study by ICM, 75% of consumers would prefer to receive smaller rewards on an ongoing basis than a chance to win one large prize. Rewarding and engaging customers early in their experience with your program will keep them coming back. Consider offering lower level prizes, like digital rewards, that are quickly attainable and instantly available.

Build and nurture long-term relationships with your customers by offering a loyalty program, but don’t view it as a quick, band-aid fix. Your loyalty program can provide valuable insights into your customers’ needs and will help your serve them better in the future, creating a strong relationship that will keep them coming back for more.

To learn about how we can help you with your loyalty program, contact us!

Read Shaw’s full article here.

What People Really Want from a Loyalty Program

Brands, what does your loyalty program offer your customers? And customers, what are you looking for in a loyalty program? According to this study from BizReport, most customers are members of at least one loyalty program. What’s your favorite loyalty program? Does it offer these features? Is it missing something? Tell us in the comments below!

Loyalty programs continue to grow across the globe, especially with younger consumers. New data out from Club Carlson shows loyalty programs are more popular with those under age 65 than those over 65, with grocery stores have the biggest programs.
by Kristina KnightNew loyalty data out from Club Carlson shows exactly what consumers want more of – points and stays. . .and also WiFi. Many believe hotel loyalty programs should include free WiFi, allowing the consumer to skip the pricey daily connection costs.
“Seventy-eight percent of Americans are members of at least one brand loyalty program; and Americans ages 18-64 are much more likely to join compared to those older than 65,” was written in the report. “Grocery stores have the most members, with 50 percent acknowledging their participation in a grocer’s rewards program. This is followed by credit cards offering points, retail stores, and hotels.”
The report also shows:

  • 4 in 5 consumers say they’re interested in hotel loyalty programs but 66% also say it takes 3 or more stays to create a loyalty bond
  • 41% say they’ll cancel a loyalty program after a single disappointing experience
  • 60% say they have more than 1 hotel loyalty program and they ‘shop around’ to find the best deal for any stay

Most (78%) of Americans are members of at least one brand loyalty program. And one more interesting note: many loyalty program members are willing to buy additional points to reach those large rewards. For example, hotel reward program members say they would be willing to pony up some cash for a free night stay when they are close to the free-stay-threshold.

Club Carlson is a global hotel rewards program; their researchers polled more than 1,000 customers between April 24 and May 1, 2013 to come to their conclusions.

Consumers Want Loyalty (Rewards)

What kind of rewards does your loyalty program offer? Consumers are enrolled in an average of 7.4 loyalty or rewards programs, but according to Maritz, they actively participate in just 4.7% of them. How are you engaging your customers to make your program part of that 4.7%?

Instant rewards, such as digital downloads of music, eBooks, software, etc., are on the rise in consumer popularity and increase redemption by offering low-level rewards. Learn more about how we can help your loyalty program engage customers with our fully customizable digital rewards platform here.

Article below originally from Direct Marketing News.

U.S. consumers have a desire for more loyalty cards in their wallets—even though they use only half of the programs they’re enrolled in now, according to the newly released study: “Maritz Loyalty Report™: U.S. Edition,” which examines brand loyalty across six different industries.More than seven in 10 of the 6,000 surveyed consumers said they had room for additional loyalty programs, even though the currently participate in an average of only 4.7 percent of the 7.4 programs in which they are enrolled, according to Bob Macdonald, president and CEO of Maritz Loyalty Marketing.

Only 35 percent of respondents were active in all of the programs in which they were enrolled, while 47 percent stopped participating in one or more programs in the past year. This high percentage of drop offs illustrates the importance of keeping customers engaged in loyalty programs, says Scott Robinson, Maritz Loyalty Marketing senior director of loyalty consulting. “Sixty-seven percent will modify where and when they buy and half will change brands depending on a loyalty program’s benefits.”

So, it’s essential that marketers recognize what will engage customers in a program and what will cause them to actively leave the program or to passively quit using it, Robinson notes. “Marketers can’t afford to outspend each other,” he says. “They can’t rely on enrollment discounts to maintain engagement. They need to focus on creating an experience.”

For example, loyalty programs should offer special experiences such as free upgrades, preferred seating, and similar benefits designed to meet customers’ desires and go beyond simple discounting, according to Macdonald.

The report’s best programs in this regard, based on customer satisfaction scores, were:

  • Chase Ultimate Rewards, (84 percent) financial services
  • Kroger Rewards (83 percent), grocery
  • Carmike Cinemas Rewards (79 percent), entertainment
  • Kohl’s Rewards (73 percent), retail
  • IHG Priority Club Rewards (67 percent), hospitality
  • Southwest Airlines Rapid Rewards (58 percent), airlines

Beyond an engaging program, other essential elements of a successful loyalty program focus on communications and balancing those communications with the customers’ desire for privacy, Robinson notes. Ninety-four percent of those surveyed said they want to receive communications from loyalty programs, but only 53 percent said that the communications that they receive are relevant. A program’s delivery of relevant communications is closely tied to participant satisfaction, according to Robinson, citing the marketing axiom of the right message needing to be delivered to the right customer at the right time. Using the right channel and the right context are equally important.

Loyalty program participants are open to more frequent communications as long as they’re relevant, Robinson adds, pointing to the study’s findings that only 12 percent of loyalty program participants say they get too many messages. But one member’s communication frequency and channel preferences may be far different from another’s, so marketers need to pay close attention to those differences and recognize that preferences change. Consequently, marketers need to stay abreast of individual customers’ communication preferences.

Similarly, to be effective, loyalty marketers need to determine the amount of personal information that a customer is comfortable with sharing and with the company using. Some customers like the idea of a company using previous purchases to make offers, while other consumers find this “creepy and weird,” Robinson says, adding that Maritz has developed a “cool to creepy” index for loyalty program communications.

What do you think? Share and comment below!

7 Customer Loyalty Programs That Actually Add Value

by Kendal Peiguss.

According to Inc.it costs a business about 5-10 times more to acquire a new customer than it does to sell to an existing one — and on average those current customers of yours spend 67% more than a new one. So, what are you doing to keep your customers coming back to your business? If you’re like 65% of marketers, your company has implemented a loyalty program. But is it working? According to the 2011 Colloquy Customer Loyalty Census, of the $48 billion worth of perceived value in reward points and miles distributed by American businesses annually, one-third goes unredeemed by consumers. Companies lose money on time and effort, and customers get no more value from the businesses to which they are “loyal.”

So how do you keep your business out of that one-third segment? How do you convey enough additional value in your programs to keep your customers coming back? It’s time for marketers to look beyond convoluted rewards systems and offer actual value to customers using their loyalty program. To get you started, here are some ideas for customer loyalty programs that might work for your business.

7 Customer Loyalty Program Ideas for Your Business

1) Use a Simple Points System

This is the most common loyalty program methodology. Frequent customers earn points, which translate into some type of reward. Whether it’s a discount, a freebie, or special customer treatment, customers work toward a certain amount of points to redeem their reward. Where many companies falter in this method, however, is making the relationship between points and tangible rewards complex and confusing. Fourteen points equals one dollar, and twenty dollars earns 50% off your next purchase in April! That’s not rewarding, that’s a headache. If you opt for a points-based loyalty program, keep the conversions simple and intuitive.

One example of a company using a points-based loyalty program well is Boloco. They speak the language of their audience by measuring points in dollars, and rewards in food items. Customers swipe their stylish Boloco card at every purchase and the card tracks the amount of money spent. Every $50 spent earns the customer a free item. Doesn’t matter if they choose a super jumbo burrito or an extra small smoothie – it’s free after $50. This is an example of a company simplifying points with an accessible customer reward system.

Although a points system is perhaps the most common form of loyalty programs, it isn’t applicable to all business types — this type of loyalty program is most appropriate for businesses that encourage frequent, short-term purchases.

2) Use a Tier System to Reward Initial Loyalty and Encourage More Purchases

Finding a balance between attainable and desirable rewards is a challenge for most companies designing loyalty programs. One way to combat this is to implement a tiered system. Offer small rewards as a base offering for being a part of the program, and encourage repeat customers by increasing the value of the rewards as the customer moves up the loyalty ladder. This helps solve the problem of members forgetting about their points and never redeeming them because the time between purchase and gratification is too long.

Virgin Airlines’ Flying Club inducts members at the Club Red tier, then bumps them up through Club Silver and Club Gold. Club Red members earn miles on flights and get discounts on rental cars and hotels. Club Silver members earn 50% more points on flights, expedited check-in, and priority stand-by seating. Club Gold members get double miles, priority boarding, and access to exclusive clubhouses where they can grab a drink or get a massage before their flight. The key is to offer benefits in the early stages to hook the customer into coming back. Once they do, they’ll realize that “gold” status isn’t unattainable, and offers really cool benefits.

The difference between points and tiered systems is that customers extract short-term versus long-term value from the loyalty program. You may find tiered programs work better for high commitment, higher price-point businesses like airlines, hospitality businesses, or insurance companies.

3) Charge an Upfront Fee for VIP Benefits

Loyalty programs are meant to break down barriers between customers and your business — are we seriously telling you to charge them a fee? In some circumstances, a one-time (or annual) fee that lets customers bypass common purchase blockers is actually quite beneficial for business and customer alike. By identifying the factors that may cause customers to leave, you can customize a fee-based loyalty program to address those specific barriers.

In 2011, eCommerce shopping cart abandonment hit a record high of 72%, and is still rising. This abandonment is often caused by “sticker shock” after tax and shipping prices have been applied. ECommerce giant Amazon found a way to combat this issue in their loyalty program called Prime. For $79 annually, Prime users get free 2-day shipping on millions of products with no minimum purchase, among other benefits.

This program is innovative because it charges loyal customers while providing enough in return for those frequent shoppers to realize the benefits. Analysts estimate that Amazon actually loses about $11 annually for each Prime subscriber, but makes up for it in increased transaction frequency that would not have otherwise happened without their exclusive benefits.

Clearly this system is most applicable to businesses that thrive on frequent, repeat purchases. For an upfront fee, your customers are relieved of inconveniences that could impede future purchases. Amazon has mastered this for eCommerce, but this loyalty program model also has potential to work for B2B businesses who deliver products to businesses on a regular basis.

4) Structure Non-Monetary Programs Around Your Customer’s Values

Really understanding your customer means understanding their values and sense of worth. And depending on your industry, your customers may find more value in non-monetary or discounted rewards. Every company can offer promotional coupons and discount codes, but businesses that can provide value to the customer in ways other than dollars and cents have an opportunity to really connect with their audience.

Patagonia, an eco-friendly outdoor apparel company, realized that their customer needed more than just points and discounts from a loyalty program. Late last year, the company implemented its Common Threads Initiative. In it, they partnered with eBay to help customers to resell their highly-durable Patagonia clothing online through the company website.

This program builds on their brand of sustainability and creating a high-quality product, and it matches perfectly with the company’s customer persona by providing a value that they really care about. So before implementing a loyalty program of this nature, be sure you’ve researched and designed an in-depth customer persona!

5) Partner With Another Company to Provide All-Inclusive Offers

Strategic partnerships for customer loyalty, also known as coalition programs, can be extremely effective for customer retention and company growth. Again, fully understanding your customers every-day lives and their purchase process will help determine which company is a good fit as a partner.

American Express has a huge partner base with companies across the country. Their recentTwitter Sync campaign rewards customers for tweeting about them by syncing discounts and deals with Twitter #hashtags. According to Visibli.com, cardholders have redeemed over $2,000,000 in rewards. Participating companies that are benefitting from their coalition with Amex include Whole Foods, Staples, and Zappos.

For example, if you’re a dog food company, partner with a veterinary office or pet grooming facility to offer co-branded deals for mutual benefits for your company and your customer. The target audience obviously owns a dog, so any services that dog will require offer added value from your company. Providing customers with value beyond even what your company can offer will show that you understand them, and grows your network to reach your partners’ customers, as well.

6) Make a Game Out of It

Who doesn’t love a good game, right? Turning your loyalty program into a game is a fun way to encourage repeat customers and, depending on the type of game you choose, help solidify your brand’s image.

GrubHub, an online food ordering and delivery website, started Yummy Rummy late last year. Once customers place three unique orders through GrubHub, regardless of price, they get to play a game for a chance of winning free stuff. Players choose one of four cards and have a 25% chance of winning a free dessert, drink, gift card or other cool stuff.

It’s important that customers understand you’re not duping them out of rewards, though. The odds should be no lower than 25% and the purchase requirements to play should be attainable. This type of loyalty program has potential to backfire if customers feel like your company’s jerking them around to win business. Executed properly, however, this type of program could work for almost any type of company, even an off-the-beaten-path B2B company. If your audience enjoys having a little fun and purchases frequently, this type of program can make the buying process fun and engaging.

7) Scratch the ‘Program’ Completely

Considering how many marketers are offering loyalty programs (whether they are effective or not is another story), one innovative idea is to nix the idea all-together. Build loyalty by providing first-time users awesome benefits, hooking them, and offering those benefits with every purchase.

The concept sounds simple, but one of the most innovative companies on the planet implements this strategy: Apple. Even the most loyal Apple customers don’t get special rewards or discounts … because they don’t offer them to anybody. Apple “enchants” customers by delighting them with a product or service the first time. The loyalty is voluntary and long-lasting, according to Apple evangelist Guy Kawasaki. Apple has plenty of supporters, both online and off, ready and willing to rave about their product. For them, loyalty happen organically.

This minimalist approach works best for companies whose products or services are unlike any other. That doesn’t necessarily mean that you offer the lowest price, or the best quality, or most convenience — I’m talking about redefining a category. If, like Apple, your company is pioneering a new product or service, a loyalty program may not be necessary. Customers will be loyal because there are few other options as spectacular as you, and you have communicated that value from your first interaction.

Measuring the Effectiveness of Your Loyalty Program

As with any initiative you implement, there needs to be a way to measure your marketing success. Customer loyalty programs should increase customer happiness and retention; and there are ways to measure these things besides in rainbows and sunshine. A lot of ways, actually. Different companies and programs call for different analytics, but here are a few of the most common metrics companies watch when rolling out loyalty programs.

Customer Retention Rate: This metric is an indication of how long customers stay with you. With a successful loyalty program, this number should increase over time as the number of loyalty program members grows. Run an A/B test against program members and non-program customers to determine the overall effectiveness of the loyalty initiative. According to Fred Reichheld, author of the Loyalty Effecta 5% increase in customer retention can lead to a 25-100% increase in profit for your company.

Negative Churn: Churn is the rate at which customers leave your company; negative churn, therefore, is a measurement of customers who do the opposite — upgrade, or purchase additional services. These help to offset the natural churn that goes on in most businesses. Depending on the nature of your business and loyalty program, especially if you opt for a tiered loyalty program, this is an important metric to track.

Net Promoter Score: NPS is a customer satisfaction metric that measures, on a scale of 1-10, the degree to which people would recommend your company to others.

NPS is calculated by subtracting the percentage of detractors (customers who would not recommend your product) from percentage of promoters (customers who would recommend you). The fewer detractors, the better. Improving your net promoter score is one way to establish benchmarks, measure customer loyalty over time, and calculate the effects of your loyalty program. A great NPS score is over 70% — your loyalty program can help get you there!

Customer Effort Score: CES asks customers, “How much effort did you personally have to put forth to solve a problem with the company?” Some companies are vying for this metric over NPS because it measures actual experience rather than the emotional delight of the customer. A Harvard Business Review study found that 48% of customers who had negative experiences with a company told 10 or more people. In this way, customer service impacts both customer acquisition and customer retention. If your loyalty program addresses customer service issues, like expedited requests, personal contacts, or free shipping, this may be one way to measure its success.

Low-level redemption is certainly a great way to retain your initial customers! Learn more about how we can help with that by implementing our fully customizable digital rewards platform into your loyalty program.

What do you think? Does your loyalty program utilize any of these strategies? Leave us a comment below!

Original document from Hubspot.

Capital One Survey Reveals Rewards Redemption on Rise; also offering Purchase Eraser

This “Black Friday,” the traditional prime holiday shopping day, nearly half of rewards card holders are not planning to hit stores or online retailers according to the latest Capital One Rewards Barometer, a quarterly survey among American consumers that focuses on how they accumulate and redeem credit card rewards. However, that doesn’t necessarily mean holiday shopping budgets are down as more than half of rewards card holders’ (58 percent) budgets remain the same as last year and 14 percent are planning to spend more this year. Credit card rewards can help supplement these holiday budgets, yet only 18 percent are taking advantage of redeeming rewards for gifts.

More than one-third of respondents said the economy has changed how they use rewards, especially women with 23 percent reporting that they now use rewards to offset essential expenses like gas and groceries. Further, this holiday season, more women plan on spending less than the prior year in comparison to men (24 percent vs. 18 percent). Thinking ahead to post-holiday shopping bills, men and women are on the same page with one-quarter planning to use their cash rewards earned from holiday shopping as a credit on their statement to offset holiday expenses.

The hustle and bustle of holiday travel is the ideal time to take advantage of rewards, but more than a quarter of those who tried to redeem rewards for travel were unable to do so with blackout dates to blame. With 24 percent of respondents still undecided as to whether they’ll plan to travel this holiday season, these blackout dates as well as rewards restrictions may prevent their last minute travel. In fact, more than half would consider traveling during peak holiday periods (e.g. within 1-2 days of Thanksgiving, Christmas and New Years), if guaranteed to be able to use rewards for their trip. Interestingly, nearly 80 percent of respondents haven’t even tried to redeem for holiday travel this year, with many saying that they thought it was too much of a hassle (28 percent) or they didn’t have enough time to plan (29 percent).

Additional trends stemming from the Rewards Barometer this quarter include:

  • Since 2011, the top three credit card rewards have been cash, gift cards and domestic airline tickets.
  • Since the spring of 2012, 40 percent of rewards card holders consistently reported they prefer a simple rewards card offering the same rate across all purchases.
  • Approximately one-third of consumers remain unaware if they are charged a fee or additional expenses when using rewards to book travel.
  • Over the last year, approximately half of rewards card holders remain unaware that they may be charged foreign transaction fees for purchases made while traveling abroad.
  • Capital One is also reminding cardholders that they can Book Now, Redeem Later. Customers can retroactively redeem rewards online and on your Smartphone within 90 days of your travel purchase with Purchase Eraser.

More about Purchase Eraser here:

Original document from The Wise Marketer.

the first club announced as one of the Top 10 Must-Dos for Loyalty Programs By Chief Marketer

The full article can be viewed here.

The excerpt highlighting digital rewards can be found below:

6. Instant Rewards: InterContinental Hotels Group incorporated a new redemption category, digital instant rewards, that it hopes will encourage new members and light users to see value in its loyalty program and stay dedicated to the brand. Its 65 million Priority Club members now have access to download music with as few as 300 points, 800 points earns popular games once more than 1,200 points have been earned, software for the home office, foreign language education and multimedia tools are available. The idea to offer instant rewards came from member research.

Priority Club Rewards

Is loyalty a missed marketing opportunity for mid-sized retailers?

By Mark Croxton, managing director, UK&I, Aldata

Organisations have been taking advantage of loyalty schemes ever since the Co-operative (or the ‘Rochdale Pioneers Society’ as it was known then) launched its dividends scheme in 1844. The most notable loyalty system today is probably the Tesco Clubcard, started in the mid 90’s by Grant Harrison and Dunnhumby. Schemes continue to evolve, with Debenhams recently announcing a loyalty system using an iPhone app, helping the brand to interact directly with customers via their phone handsets.

According to the Journal of Retailing and Consumer Services, it is recognised that when loyalty scheme members are happy with the benefits of a programme, they will be less fussy about in-store prices, and more likely to return to the store and provide repeat business .

However, these days consumers are targeted with a variety of cards, vouchers, offers, membership deals and subscription-only loyalty schemes. Many of these soon become ineffective as consumers sign up to gain the benefits, but simply receive mass-mailed marketing and general, non-specific promotions.

A problem of size?

Although many loyalty programmes do function well, there is a perception that these are only run by large companies; smaller organisations are limited to ‘cards to get stamped’ to get a free beverage, for example. Indeed, many mid-sized retailers have hesitated over getting into loyalty because of the perceived barriers to entry. Many retailers believe that loyalty systems, with their complex tracking and prediction algorithms, are both difficult and expensive to implement.

But let us take a step back for a moment. There are many mid-sized organisations which are better suited to loyalty schemes by virtue of their specialism or the nature of their services. Small hotel chains, for example, are in regular physical contact with their customers, presenting a strong opportunity for a bespoke scheme and tailored communications. They also gather a wealth of data via bookings systems, which they could potentially feed into loyalty systems, providing customers with offers which exactly suit their requirements – or offer them new opportunities, encouraging new visits and building up the store relationship with the customer.

Loyalty schemes can certainly help these mid-sized players compete with their larger rivals andengage with existing customers. A tailored experience and custom-fit offers can go a long way to make customers return to the store again and again. It also offers a way of testing new products and services with existing loyal customers, or cross- and up-selling. Tesco’s Clubcard, for example, makes no secret that although most of the discount vouchers sent out are for already-purchased items, two out of every six are for items related to existing purchases, expanding sales opportunities.

A new wave of accessible loyalty

As we have said, many small retailers and organisations believe loyalty systems to be inaccessible because of the cost barriers. However, this is far from the truth – with the latest wave of ‘Software as a Service’ offerings, companies can purchase ‘pay as you go’ access to loyalty solution, based on a rental, rather than purchase model, eliminating many of the costly outgoings.

Indeed, Finlandia (a chain of boutique independent hotels in Finland) is using a highly effective loyalty programme, and pays for its loyalty software based on the number of customer sign-ups to the scheme. Finlandia also charges customers €26 for its loyalty card for three years, so the procedure is quite painless from a budgetary point of view.

Once organisations do overcome the perceived barriers, loyalty schemes not only increase customer ‘stickiness’ but also enable organisations to engage with customers, improving brand experience both in-store and out. It can also act as a catalyst for business and a safety net in adverse times.

Today’s need for loyalty

To put this in context, customers included in Finlandia’s loyalty scheme currently account for 5-25% of turnover. During the downturn, overall sales dipped by 20%, but sales from customers in the loyalty scheme only dropped 10%, clearly showing the value of such a scheme properly executed.

Although retailers can hesitate over loyalty schemes, mid-sized retailers should not flinch from the opportunities which they can present. In fact, with many of the issues now a question of perception, rather than of fact, and with a loyal customer often making the difference between a lean year and a good year, now is certainly the time to get involved.

Original post from Ulta Marketing.