Perking Up Your Loyalty Program Benefits Is As Easy As A-B-C

Consumers and marketers don't always see eye to eye when it comes to customer loyalty programs. Consumers tell us they enroll in programs for the points, discounts, and savings, while companies tell us boosting customer engagement is a top goal for their loyalty programs. Sixty-seven percent of consumers consider themselves active in programs they join, yet the marketers who run loyalty programs report that only 16% of customers are active program participants. Regardless of which camp you fall into, one thing is clear: a program is only as strong as the members who participate in it. And, the value exchange a program creates is central to attracting members today and getting them to come back tomorrow, next month, and next year.

But, choosing program benefits can create some anxiety. Marketers need a mix of rewards that satisfies consumers' desire for savings while encouraging deeper engagement, and acknowledging/recognizing customer value. Forrester clients often ask me questions like "What can we offer besides points?," and "How do we make customers feel valued?." The short answer is that there are a lot of options that have varying objectives for the customer:

Table of benefits and customer impact

To help, I recently published a report that maps out the pros and cons of 16 different benefit types including loyalty currency, enhanced customer service, experiential rewards, surprise and delight, and status tiers (subscription required). Whether you're auditing your current mix, or looking to start fresh, be sure to follow the ABC's of program benefits.

  • Align them with your program, customer, and brand objectives. Not every benefit is going to reward and retain and recognize member value. And piling on too many rewards creates confusion and complexity. Success is choosing the right benefits that reflect your business goals -- short and long-term -- and meet customer expectations.
  • Boost their perceived value and attainability. Regardless of how much money you dish out to fund your rewards, customer perception is reality. Rewards that members perceive as difficult to achieve or worthless are not going to motivate the desired behavior.
  • Contain the costs and the resources required to deliver them. The thought of managing the liability of a points program is enough to throw many retailers into a tailspin. And if you only have two or three people managing the loyalty program, creating and refreshing content that keeps customers engaged may seem like a Sisyphean task. If your loyalty program is costing you more to maintain than the value you gain, you're not doing your business any favors.

How did you determine your ideal reward mix? What are the challenges you face when it comes to identifying and delivering rewards? I'd love to hear your perspective and thoughts on this topic. Feel free to reach out to me via email, on Twitter, or request an inquiry.