When you pass colorful signage promoting a store’s loyalty program or receive a postcard reminding you to redeem the rewards points you’ve earned from your favorite brand, does this prompt you to think about the benefits of your own loyalty program? If not, perhaps it should.
Between half and three-quarters of U.S. consumers belong to a loyalty program. Shoppers love these programs because they give them more value and let them earn cool stuff. Businesses love loyalty programs because they keep customers engaged and increase lifetime customer value.
Simply put, loyalty programs are a win-win for both sides.
Not all customers are looking for the same things out of a loyalty program, however, so it’s important to match your program to what your customers want. According to a new study from Sailthru, the top three reasons customers join loyalty programs are as follows:
51% Earn points to redeem offers
20% Save money
15% Receive products for free or at a discount
Note that while some customers join loyalty programs to save money, this isn’t always the primary reason. Consumers are more than twice as likely to jump on board to earn points and redeem offers.
Aren’t redeeming offers and saving money the same thing? Not always. Earning loyalty points is much like a game—there is excitement associated with building up points and seeing what you can snag, especially when offers are continually changing. That’s because loyalty programs often tap the power of FOMO, or “fear of missing out.”
“Offers” can also mean a variety of things beyond free or discounted products. For example, they include things like:
- Sneak peeks at new products.
- Access to exclusive VIP-only events.
- Free or discounted shipping for online orders.
- Access to new releases before everyone else.
- Free product samples.
Among younger consumers, insider offers and VIP deals are more popular reasons to join a loyalty program than among older shoppers.
Beyond customer engagement, there are other benefits to starting or promoting a loyalty program. Customers who belong to such programs are more likely to provide their personal information in exchange for more personalized experiences. More than 70% of consumers are also more likely to recommend a brand if it has a good loyalty program.
If you don’t have one already, consider getting your “loyalty program on.” But be creative. Understand what offers your customers see as most valuable, then develop unique and interesting benefits to keep them happy and engaged.