The Keys to a Successful Customer Loyalty Program
It seems everywhere you look, every business has a loyalty program. This is both good and bad.
It is true that there is a loyalty program fatigue in the mind of the American consumer. We've all been there with all kinds of keychain bar codes or mobile apps we never open, which means they aren't really building "loyalty."
Monoprix recently changed their program to be much simpler and friendly to their customers.
So, what should companies do when thinking about how to structure their loyalty and rewards programs? We found a few real world examples to help you build the best loyalty program for your customers.
This is more a rewards than a loyalty program, but Hy-Vee also owns gas stations. One way Hy-Vee has chosen to reward customers is to provide discounts on gas, based on the purchase of certain products in the grocery store. This isn't unique to many grocery stores across the country, but their app is full of app-only deals and digital coupons.
5 Borough Bagels
This local coffee shop in Des Moines, Iowa, decided right from the very beginning that they wanted to reward their customers, all customers, for their purchases. Sure, the more you buy the more rewards you'll receive, but it's simple: buy ten drinks, get one free. No other rules. Simple and easy to understand. And everyone can participate and eventually get something for coming back again and again.
Over the years, the Starbucks loyalty program has changed quite a bit ... and not usually for the better (if you ask customers). It was once very simple and easy to understand and slowly eroded over time to reward only the top-of-the-top buyer. I'm sure there was a business-case for this change, but it basically made it more difficult for the "lower-than-average" consumer to earn bonuses and rewards and instead, only rewarded the top spenders. That's not quite a friendly rewards and loyalty program when you de-value those who have truly been loyal.
Similar to the coffee shop, Hotels.com has a very simple rewards program: book nine nights and get the tenth free. Speaking from experience, this came in very handy when booking my travel for my honeymoon as well as time with the in-laws. Sure, some hotels don't qualify and it is based on tier of your own spending, but that's fair. The consumer is still getting a reward and it is very easy to understand.
The last example comes from Chic-Fil-A, a fast food restaurant everyone has heard of. I'm quite certain no other fast food restaurant has mastered an app or the fast food rewards program quite like they have. Their app does two things better than most anyone: It tracks progress to your reward (which is a different treat each time!) and has a feature for store managers to send you surprise rewards! The latter is a feature more companies need to take advantage of: surprise & delight. There is tremendous power in this and it can work for all businesses.
Rewards and loyalty programs aren't going away. How you plan it and executre it will make all the difference in making your one-time customer become a raving fan of your business.