Between half and three-quarters of U.S. consumers belong to a loyalty program. Shoppers love these programs because they earn points and redeem offers. Businesses love loyalty programs because they keep customers coming back, driving increased customer value. Simply put, loyalty programs are a win-win—a successful program that benefits everyone.
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 see as most valuable.
Why Do Customers Join?
According to a new study from Sailthru, the top three reasons customers join loyalty programs include the ability to receive products for free or at a discount (15%). Note that while some customers join loyalty programs to save money, this isn’t always the primary motivation—loyalty programs often tap the power of FOMO, or “fear of missing out.”
“Offers” can also mean a variety of products. For example, they include things like access to exclusive VIP-only events, free or discounted shipping, access to new releases before everyone else, and free product samples.
Earning vs. Saving
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 when offers are continually changing. That’s because loyalty programs often tap the power of FOMO, or “fear of missing out.”
Loyalty Matters
Does receiving signage promoting a store’s loyalty program, or receiving a postcard reminding you to redeem the rewards points you’ve earned from your favorite brand, prompt you to think about the loyalty program? If not, perhaps it should—customers who belong to such programs are more likely to provide their personal information in exchange for more personalized experiences. More than 70% of insider offers and VIP deals are more popular reasons to join a loyalty program than among older shoppers.
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, and are twice as 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.