Long-term loyalty has a simple premise: The more people feel known, understood and valued by a brand, the higher the return of their loyalty.
The rise of data-driven, customer experience marketing has brought with it a new generation of loyalty and reward programs. These programs seek to connect with customers, channel partners and employees, personally; and to build enduring relationships and brand communities.
They achieve these objectives by moving from the traditional, one-size-fits-all approach to loyalty and rewards, towards a more personalised model that factors in a fuller experience of human motivation.
Essentially, this is the shift from the old, transactional model of loyalty and rewards i.e. ‘Do this, get that’, to a more human-centred, relational model, in which it is understood that people are driven by different motivations, and that they have different reward preferences.
A reward strategy based on this model would typically include deep segmentation, a refined member life cycle and data-driven communication cadence.
The result is a given: Highly personalised, highly effective rewards that build loyalty for life.
Bring joy, build loyalty
It used to be that rewards were the last stop in the cycle of attracting, retaining and growing loyalty among customers, channel partners and employees.
The truth is, they still are. Only, what’s changed is that today we don’t simply aim to reward brand users, we strive to bring joy to their lives and build long-term relationships. And there are a few scientifically proven ways to achieve that.
Surprise and delight. Inside the human brain is a built-in reward circuit. It activates in anticipation of a reward and stays active even after having received a reward. We are so driven by this pleasure-seeking practice that we quickly learn what actions will lead to a reward, and then repeat them.
However, when the brain’s reward circuit encounters something new or novel, it seizes on this unexpected stimulus and releases a really powerful load of the pleasure hormone, dopamine.
What’s more, neuroscientists have found that the more random and unexpected the rewards, the more pleasure people get from them. This ‘surprise and delight’ phenomenon is, today, a key feature of reward strategy.
Creating sporadic reward opportunities to ‘surprise and delight’ your customers, channel partners and employees is an easy way to establish a joyfully charged emotional connection.
Instant gratification. It’s a fact: Life is speeding up. Take the internet, for example. There was a time when we would wait minutes for a website to load … our patience extending long enough for images to appear, pixel by pixel. Today, we bounce in less than four seconds when we don’t see what we want.
This accelerated rate of expectation and gratification is well understood in the world of online shopping and digital retailing. Entire sites are designed around ease of purchase and speed to checkout.
No different with rewards. The risk is real for reward marketers who don’t adapt to this environment of instantaneous reward selection and fulfilment.
Fortunately, the last few years have seen incredible innovation in transactional software development. Thanks to new technology in online, offline and mobile payment issuing and processing, reward recipients are able to interact with the brands and businesses giving them rewards, in ways they value and appreciate.
For time-constrained individuals, innovation around the digital display and distribution of rewards is obviously beneficial; for convenience, simplicity and a one-to-one, immersive experience.
Yet, the most significant benefit is in the way that reward wishes can now be gratified, instantly.
Make rewards personal
In a world of look-alike reward programs, there’s a lot to be said for those brands and businesses that practice personalisation effectively.
For one, they help create a virtuous cycle of engagement. The more personalised the brand interactions, the more likely it is that people will provide further personal data, thereby further improving the quality of engagement, and with it the depth of loyalty.
So, what does it take to reward the people who matter to your brand in truly personal ways? In the age of big data, basic segmentation is no longer adequate because it doesn’t yield the nuanced insights necessary to understand users from different angles.
If you’re currently running a reward program, we recommend augmenting registration and member-harvested data, as well as transactional and redemption data, with ethnographic and psychographic research, plus syndicated survey research, towards the creation of a truly customised segmentation model.
Personas – fictional representations of your target audience – are also useful in sharpening the focus of personalisation.They also help shape your content marketing and enrich your brand narrative.
Make rewards exclusive
Status rewards make people feel special and loyalty marketers have been working this angle for decades. First there were VIPs, now there are VVIPs and in the world of rewards, these labels of exclusivity and privilege are all-important. Because, let’s face it, who doesn’t want to feel special? Or, more aptly, who doesn’t want the privileges and rewards that come with being a VVIP?
There’s interesting psychology behind the principle of status and the exclusivity it affords. It has to do with how human beings construct social value.
According to current thinking among psychologists and ethnologists, people rank others according to how they see them being treated.
In the context of rewards and reward programs, tiering is about rank and functions at two levels: For those at the top, the position provides a feeling of superiority. For those in between or at the bottom, the tiers are aspirational and serve to motivate upward mobility.
But back to the principle of social value. It’s a complex concept because it incorporates other human values, such as dignity, respect and a sense of belonging.
Increasingly reward strategists are working to convey these values within each reward experience, and for every reward recipient. This, so that every person who receives a reward, experiences the value of being unique – not in relation to where they rank, but simply for who they are.
The feat here, is to make every reward an exclusive experience, ensuring that for the person experiencing it, they feel like a VVIP.
Measure and assess your experiential campaign
Status rewards make people feel special and loyalty marketers have been working this angle for decades. First there were VIPs, now there are VVIPs and in the world of rewards, these labels of exclusivity and privilege are all-important. Because, let’s face it, who doesn’t want to feel special? Or, more aptly, who doesn’t want the privileges and rewards that come with being a VVIP?
There’s interesting psychology behind the principle of status and the exclusivity it affords. It has to do with how human beings construct social value.
According to current thinking among psychologists and ethnologists, people rank others according to how they see them being treated.
In the context of rewards and reward programs, tiering is about rank and functions at two levels: For those at the top, the position provides a feeling of superiority. For those in between or at the bottom, the tiers are aspirational and serve to motivate upward mobility.
But back to the principle of social value. It’s a complex concept because it incorporates other human values, such as dignity, respect and a sense of belonging.
Increasingly reward strategists are working to convey these values within each reward experience, and for every reward recipient. This, so that every person who receives a reward, experiences the value of being unique – not in relation to where they rank, but simply for who they are.
The feat here, is to make every reward an exclusive experience, ensuring that for the person experiencing it, they feel like a VVIP.
Give them what they want
How can you ensure your rewards aren’t just liked, but loved? Simple. Ask your customers what they want.
Not everyone loves coffee. This was the realisation that changed the course of commercial history for a much-loved, global coffeehouse chain. Because they added teas to their menu. And smoothies, and sodas, and bottled drinks. In doing so, this beloved coffee company invited customers with alternative preferences to become loyal brand fans.
For reward strategists, there is much we can learn from this story. Because when we deepen our understanding of the reward preferences of our customers, channel partners and employees, we add meaning and value to our relationships with them.
With so many different types of rewards, and so many different ways to distribute them, it helps to think about rewards – in the context of preference – in three different scenarios: attraction, retention and motivation.
Attraction is the all-important reward scenario. Apply whatever data analytics you have, together with the buyer personas you’ve developed, to offer a reward of relevance. And give it freely! A positive reward experience will make the recipient want to give you something in return.
Once your reward has enjoyed usage, apply a preference analysis across any sign-up, transaction and/or redemption data you have. The sooner you can map the preferences of your participants, the faster you can tailor your rewards to their lifestyles and around their lifecycles.
To keep your users motivated and engaged, remember to apply the power of surprise. The novelty factor of random rewards activates the brain’s pleasure circuit and have been shown to produce higher affinity and deeper engagement.
We can’t say it enough: the more you know about your customers’, channel partners’ and employees’ preferences, the higher the impact your rewards will make. The intention is not simply to please, but to super-please with surprise and delight.
Want to know how you can optimise your rewards strategy and build enduring relationships with the people who matter to your business? Download our e-guide, The Right Rewards Drive ROI.
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