We recently wrote about how to create the right mix of monetary and experiential rewards for your business's customer loyalty program. This week, an article came out on econsultancy by Andrew Broadbent that discusses the importance of including experiential rewards in your loyalty program. We've included an abbreviated version of the article below. You can read the full article here.
Brands that are incorporating strategies to offer experienced based rewards in their loyalty programs are going to win and retain more customers compared to companies just offering discounts.
Consumers are demanding experienced based loyalty rewards
We all have heard of retail loyalty programs and promotions, pretty much every industry offers some type of program in order to attract new and retain existing customers. The problem is, that many of these programs have become mundane and are not offering rewards that are exciting to their members.
A recent report from a survey conducted by a loyalty program firm Colloquy and a ticket selling platform Fanxchange has confirmed that a majority of Americans are dissatisfied with the reward choices that are being offered in their loyalty programs.
According to a study done by JWT Worldwide, “72% of Millennials would rather spend money on experiences than products” Social media can be a useful activation marketing tool with members posting their once in a lifetime experience of these events. Experiential marketing appeals to consumers because it touches their passions in life.
Tips for using experiential rewards incentives to engage consumers
1. Not all experiential rewards offers are the same.
One size does not fit all when it comes to offering different price level reward promotions to different customer segments. Understanding what will appeal to a high valued consumer is very critical.
For example, going on a vacation to Florida may seem to be an exciting and exotic event for one person, but it could be quite ordinary and routine to someone else.
As a marketer, you need to ask these questions:
- Who is the target audience?
- Where do the incentives and rewards fit into the campaign?
- How frequent or limited is the promotion going to be offered?
- How is the “exclusivity” level going to be determined of the offer?
- How are the marketing goals going to measured and achieved?
2. Exclusive offers and great first impressions matter
People want to feel like they are part of a brand and that they are being offered something special and not generic.
Test the ad copy of the offer you are going to send first. If you are wanting to create excitement or make the offer seem exclusive, then make it seem like it is personalized for them or they are part of a limited tier or group.
An example of this, the Wall Street Journal, WSJ has been doing a terrific job of keeping their subscription members happy by now sending them exotic and exclusive offers via email to be able to RSVP for events, discounts on products, and contests that could win you a dream vacation.
I am myself being able to attend an exclusive “Simon Sinek book signing, cocktail party event at Valentino's New Flagship store in NYC sponsored by the WSJ”. The party was a very upscale VIP experience, where they offered the guests Glenlivet 18 year aged single malt scotch and catered the event with very high end appetizers.
I was so happy that I posted photos to social media and felt very privileged and valued to be a customer of the WSJ.
3. Set your brand's experiential rewards apart from the competitors
Just as people will remember cool and unique event experiences, they will also remember the brand that sponsored and brought it to them.
It’s good to keep tabs and research your competition to see what is being offered in their loyalty programs.The offers should be distinct and unique enough so that it cannot be easily duplicated.
An example of this, MasterCard was a sponsor of Beyonce’s world tour, and it used and used its partnership by offering some it’s upscale customers access and the opportunity to experience “VIP Priceless” events with backstage passes and front row seats.
4. Help to facilitate a buzz: encourage social sharing
When you have a platform that encourages and allows your customers to share their excitement when they earn and receive access to a unique experiential reward, this can be very beneficial for generating buzz and word of mouth loyalty for the brand.
Rewards and loyalty marketers should create hashtags for each event, so can track the social shares before, during and after each event.
5. Test and measure: keep long terms goals
It’s important to realize that when testing different types of experiential incentives and rewards, they will not always be a home run, but it is ok to fail and learn from it.
It is also very important to keep in mind, what are the important loyalty and customer retention metrics worth keeping track of. Take a look at some of these metrics listed in the bullet list below:
- Customer lifetime value
- Return on Investment
- Net promoter scores
- Customer effect scores
Remember one failed reward does mean the business model does not work, Marketers can gain important insights using data analysis techniques and metrics, to determine what went wrong with the last reward and how the next promotion can be more successful.
Some customers may appreciate discounts, but then your company may find itself in the conundrum of the only thing you have to offer is a low price point.
The problem with that is if your products are not unique and the competition only comes down to having the lowest price, then eventually someone is going to undercut you and come in lower.
It is better to build partnerships that help to showcase your brand‘s products, avoid the price slashing and offer unique, experience based rewards and incentives that will make your customers feel special and remember your company.