Consumers today are overexposed to transactional based loyalty programs. Their wallets and bags are so full of buy 10 get 1 free punch cards they can barely keep track of them all. In fact, on average American households hold 29 loyalty program memberships but are only active in 12 of them, according to Colloquy. This means that if a consumer signs up to your loyalty program there is less than a 50% shot that they’ll actively engage and participate. How can brands avoid this fate?
This answer is in the loyalty program software that your brand decides to use to support its loyalty strategy. This software is crucial to your strategy’s success, here we have laid out the basics in choosing loyalty program software that actually adds value.
1. Simplicity is key
When you’re evaluating different loyalty program software you need to think from the perspective of your end user and target audience. The simplicity of the platform is a huge factor for users to decide if it’s worth their time or not. People don’t like feeling like they don’t know how to do something, if it’s challenging to use they simply will not engage. As the gamification expert Yu-kai Chou stated, “We can’t get the people to do what they don’t know how to do”. You need to keep in mind the limitations of motivation, you can dangle the most enticing reward in front of them but if the program itself isn’t simple enough they will never be motivated enough to take action.
2. Create exclusivity with a tier system
By selecting loyalty program software that allows the use of a tier system you are able to tap into human drives. Gamification is the application of game like elements into a non-game context, using human-focused design instead of function focused. One of the human drives that gamification focuses on is Social Influence and Relatedness. This has to do with comparing yourself to other people, wanting to compete and get ahead. When you create an exclusive group of the top users you motivate users to continue engaging to move up levels and be part of that group. Make special perks for the highest performing group that will appeal to users and drive them to participate.
3. Tap into customers values
This point is an extensive of gamification techniques, another core human drive is called Epic Meaning and Calling. As stated by Yu-kai Chou, “This is the drive where people are motivated because they believe they are engaged in something that is bigger than themselves”. Choose loyalty program software that will allow you to add rewards or actions such as, non-profit donations, volunteer hours, win-win referrals and more. These types of actions and prizes make users feel like they are not acting solely for their own personal gain, but to help others as well. This intrinsic motivation is extremely powerful to drive behaviors and create a positive experience for users.
4. Use strategic partnerships
Strategic partnerships are a great way to provide your users with a plethora of enticing rewards. A great way to draw attention to the loyalty program is to run short term contests for an exciting item offered by a partner. The reason this is so successful is that it creates a sense of urgency since the specific reward is not always offered on the loyalty platform. This also keeps users on their toes by switching up the types of rewards offered and makes them want to keep checking back for new contests or rewards offered. These partnerships can be win-win to keep your users engaged and also give valuable exposure to your partner.
5. Gamify the experience
Gamification is the use of human-focused design and drives behaviors by tapping into intrinsic and extrinsic human drives. Simple right? If you were thinking you could just slap some points onto different actions then think again. Applying gamification to loyalty program software is highly beneficial and must be done in the right way to really obtain results. Look for software that uses levels, segmentations, challenges, social contests, rankings, badges, interactive design, actions that help others, social media actions and more that really taps into human drives and builds a unique, enjoyable experience past the transaction. Once a user has a positive experience they’ll make those referrals and continue to engage with your brand.
6. Don’t depend on a transaction
Did you know that 97% of loyalty programs are transactional based, and that 77% of loyalty programs fail within 2 years according to Cap Gemini? That’s an alarming statistic we are working to change by showing companies that giving discounts for purchases don’t build brand loyalty, it builds deal loyalty. When you force your consumers to make a purchase in order to receive any type of reward it doesn’t create a positive or memorable experience.
Instead, offer your consumers rewards just for simply signing up to your program, which starts your relationship off on the right foot! Once users see the value you can bring them then they’ll actually start engaging and referring friends to your brand and loyalty platform. These transactional programs may have working in the past but in today’s world consumers are not willing to trade in an experience for a discount.
Well, there you have it! 6 ways to choose loyalty program software that actually works for your brand!
If you’d like to learn more for your business needs schedule a call with our loyalty experts!