3 Loyalty Program “Add-Ons” That Delight and Win Over Customers

Most loyalty programs operate using a point system. Shoppers buy products, and then they earn points for their purchases that can later be redeemed for perks and freebies. And while there’s certainly nothing wrong with running such loyalty programs, sticking to the “points-for-purchases” format alone is no longer enough to engage shoppers and bring about real loyalty. The practice has become so commonplace that the allure of earning points doesn’t excite consumers the way it used to.

Retailers have to be more innovative in implementing their loyalty efforts. If you’re running a reward program, cook up unique perks on top of the typical point system that will not only encourage customers to come back but also generate genuine loyalty.

Examples of such perks include:

1. Early access to products or services

Introducing a new product or service? Invite your most loyal customers for a first look. Aside from making your customers feel special (who wouldn’t be honored to get early access to something?), this move gives you the chance to test and refine the product or service before unveiling it to the public.

A good example of this can be seen at certain Starwood Hotels & Resorts, which are currently testing a keyless entry service that would enable guests to skip the front desk and open their room doors using their smartphones. The service is scheduled isn't completely available to the public yet, but select members of its Starwood Preferred Guest loyalty program can already access the capability.

Action step: See whether you can do something similar in your business. If you’re considering a new product, for instance, hand out samples to your most frequent shoppers or top spenders and give them the chance to try it out. Let them know that you’re giving them the exclusive opportunity because you value their business—and their opinions. This will not only earn you loyalty points from your customers but you’ll also likely get some valuable insights about your product or idea in the process.

2. Rewards that they won’t see coming

Giving out unexpected rewards has proven to be an effective way to delight customers, boost loyalty, and get people talking. Plenty of businesses can attest to this.

TD Canada Trust, for example, wowed its customers—along with the rest of the world—when it turned its ATM (automated teller machine) into an automated thanking machine that spoke to customers and gave them personalized gifts as a thank you for being loyal patrons.

Plenty of TD Bank members were surprised, including a customer who received a plane ticket to see her daughter in Trinidad, a baseball fan who got the chance to throw the first pitch at his favorite team’s game, and a mom who got $2,000 that would go into a savings account for her kids.

The campaign—captured in this video—demonstrates just how powerful surprises can be. When implemented the right way, an unexpected reward won’t just make someone’s day. It can turn her into a lifelong customer.

In addition, rewards that people don’t see coming are also far more memorable than generic points. Brad Handler, chairman of Inspirato, shared a story about how an airline surprised him and his family by upgrading them to first class back when he was a 10th grader.

“The upgrade was unexpected and appreciated,” he wrote on Forbes. “Had we not been upgraded, the connecting flight to Orlando would have been exactly as I anticipated and instantly forgotten. Instead, I remember it 30 years later.”

The same thing can be said about the loyalty programs we see today. Customers probably won’t recall most of the rewards that they redeemed with their points, but they’re bound to remember an unexpected present or a free upgrade.

Action step: Find ways to surprise your best customers. You don’t have to pull off a huge stunt to accomplish this. Simple gestures such as giving them a handwritten note, handing them a personalized gift, or upgrading their coffee cup size from small to large can go a long way.

3. Tailored perks

A study cited by eMarketer found that “consumers have begun to expect more personalized offers and services—not just blanket discounts—in return for their participation” in rewards programs. When asked about the benefits of providing personal information to businesses, 76% of consumers cited “more relevant discounts and offers,” and 62% mentioned “personalized offers.”

Despite these findings, however, most companies aren’t incorporating their customer data and preferences into their rewards programs. Don’t be one them. Enhance your loyalty efforts by using shopper information (ex: demographics, purchase history, etc.) to provide tailored rewards and experiences.

You can also ask shoppers to provide information on their shopping habits as they sign up for your program. A great example of this comes from Office Depot, which customizes member perks based on frequently purchased items as well as the information that they give the retailer. Upon sign-up, customers are asked to choose from three membership types: Local Business, Loyal Customers, or Star Teachers, and they’ll receive offers designed exclusively for them.

Action step: If you haven’t done so yet, start collecting more information about your customers. Where are they located? Which items do they frequently purchase? How old are they? Take note of the answers to these questions, and use them to personalize their rewards.

Your take

Can you name other special rewards that businesses can offer to their loyal customers? Share your thoughts in the comments.

Want more retail advice? Check out the Vend Retail Blog, where we talk about trends, tips, and other cool things that can help stores increase sales, serve customers better, and be more awesome overall.

Image:bloeise on Flickr