Lotteries are faced with the challenge of retaining their players as well as attracting a new generation of players. A recent survey of gamblers in the UK uncovered that 39% put most value and their loyalty on the frequent receipt of special offers. What can you do to motivate customers to come and stay?
Loyalty programs have been around for decades, incentivizing consumers to spend their hard-earned dollars with desirable vendors. As time marches on, we see the evolution of the loyalty programs move from in store stamp cards to broader incentives, enhanced experiences and beyond.
Approximately 78 percent of Millennials belong to two or more loyalty programs, however there’s evidence that loyalty programs are not delivering on their expectations. A concerning 70% of Millennials engage with less than half the loyalty programs to which they belong to, and 50% engage with less than a quarter, compared to 62% and 38% respectively for non-millennials.
When looking at what makes them loyal, 86 percent join to collect and redeem points for rewards, 78 percent to access discounts, and 28 percent for convenience (e.g. skipping the line). This desire for both convenience and near-term rewards in particular is higher than that of any other demographic. Also, this is an on-demand economy: 34 percent say they won’t join if the enrolment process is too long, and if they don’t see results quickly. If they’ve visited several times, they want to see something for that – immediacy is key.
They have the latitude to choose and participate in programs that work best for their lifestyles.
It’s not enough to enable a point system and leave it be. When rewards become automatic, customers forget about the program, which means they aren’t enticed to spend more to earn more. You need a way to keep customers engaged with the program and remind them about what they have achieved.
An e-commerce beauty brand Tarte capitalizes on this desire for engagement by incentivizing users who engage through the brand with their own content and social media. Their platform allows user-generated content (like video makeup tutorials and selfies) to help other consumers make buying decisions. Customers can earn rewards points for activities, like posting a selfie with Tarte products, writing online reviews, and video tutorials — transforming them into brand ambassadors.
Tarte’s program shows us that your loyalty program can incentivize almost any behavior you want from customers and that it doesn’t have to be limited to encouraging them to spend more. That means customers can maintain their point-earning momentum in between purchases, and you can build brand awareness and authority.
Brands should also consider gamification strategies. By adding game-like features to their rewards program, they can create rewarding and engaging experiences in between purchasing behaviour.
What are your customers likes? What do they value? How do they behave with your brand?
Starbucks has done an excellent job of using their loyalty app to gain insights on the behaviours and likes of their customers and has enhanced their experiences with the brand, both in and out of their stores. More than 25% of their consumers use their app to purchase their food/drinks. This is largely due to the fact that they’ve connected the app to their loyalty stars (points), as well as having the skip the line feature. They know the frequency, the products and location preferences of their top consumers. This data gathering empowers them to offer more relevant perks and tailored communication to customers.
Beyond the traditional loyalty offerings, they speak to the millennial mindset by partnering with other brands they value. If you like the music you hear in the store, you an easily find out what it is on the app and “Save to Spotify”.
Consider rewarding your customers with something that recognizes their interests and compliments your brand. North Face has done a great job by offering curated experiences that help to build a stronger connection between consumer and brand. A customer would certainly value earning a mountain climbing trip with North Face gear to wear along the way!
Not all programs have to offer a monetary incentive in exchange for customer purchases and loyalty. Instead, appeal to your customers’ values and philanthropic desires. TOMS supports major charities through its loyalty program, specifically the One For One shoe donation. With every purchase, customers earn the non-monetary incentive of creating change through TOMS supported initiatives.
In the end, knowing your customers likes, wants and behaviours is key when gaining their loyalty. A one-size-fits-all approach doesn’t work- use their data to provide them with a customized experience they’ve come to expect.