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Loyalty Programs

How to Create an Addictive Loyalty Program for Your Customers

Written by 
Brad Davis
February 21, 2022

An addictive loyalty program is every marketer’s dream. It’s one thing to create a rewards program that keeps existing customers coming back for many transactions to come, but what about one that consistently boosts a customer’s frequency of visit and average order value, while incentivizing referrals and other behavior that helps to expand your customer base? Isn’t that the Holy Grail of loyalty marketing?

Here are a few tips and tricks for ensuring that your loyalty program never fails to get customers through the door (or clicking onto your website) and telling all their friends about your brand.

1. Offer an upfront signup incentive

DD Perks Upfront Incentives
DD Perks Upfront Incentives

At Stamp Me, we’ve noticed that businesses which offer their customers an immediate upfront reward for joining their loyalty program build registrations three times faster than businesses which don’t.

To get customers addicted to your loyalty program, you first need them to sign up in the first place. The more incentive you give people to sign up, the quicker you’ll build registrations and then you can convert these new customers to loyal repeat customers.

This means making the signup process as quick and convenient as possible, as well as giving them a reason to stop what they’re doing and take two minutes out of their day to download your digital loyalty app and fill in some basic personal details.

Don’t think of it as giving something away for free to a customer who hasn’t proven their loyalty yet… think of it as an investment in their customer lifetime value.

You’re immediately showing that you appreciate their repeat business, and that your loyalty program offers value. Right from the get-go, you’re building the foundations of an addictive loyalty program experience that keeps them coming back again and again.

2. Make your rewards experiential

screenshot of nordstrom nordy club webpage
Nordstrom's The Nordy Club - Image source: Nordstrom

What’s an experiential reward? In short, it’s when you treat your customers to an actual experience that will become a fond memory, rather than discounted products or freebies.

This is increasingly important, as the Brookings Institute recently revealed that more than 70% of Millennials prefer to spend money on experiences, rather than material objects. This trend is expected to continue as younger generations take over a greater proportion of global consumerism.So how can you make your loyalty program addictive with experiential rewards?

Some cosmetics brands invite their loyalty program members to in-store workshops on how to style make-up in different ways to achieve various looks, while some restaurants host cooking classes exclusively for high-tier rewards program members.

To use a real example, American luxury department store Nordstrom offers customers the following perks and benefits as part of its Nordy Club program:

  • Access to exclusive events and workshops
  • Curb-side pickup options
  • Free basic alterations
  • First dibs on Nordstrom Rack’s “Clear the Rack” sales
  • Countless other VIP perks and benefits

Notice how none of these rewards actually cost Nordstrom any money? Every reward listed here focuses on delivering a more convenient and exciting experience for customers, without drastically impacting Nordstrom’s bottom line.

Of course, your experiential rewards don’t have to directly relate to your business. You can incorporate everything from movie and concert tickets to skydiving passes, hotel stays and go-karting coupons into your loyalty program.

The trick is to know your target audience, and offer them experiential rewards that have the highest likelihood of appealing to them. Finding local businesses to partner with is the easy part.

3. Give regular loyalty status updates

man texting on phone
A member checking his loyalty status updates

A sure-fire way to create an addictive loyalty program for your customers is to keep them updated on where they stand. If you keep reminding someone that they are a single purchase away from redeeming their next reward, they’re much more likely to visit your store (or jump on your website) and make a purchase.

Many loyalty app providers offer features and functions within the platform that allow marketers/business owners to automate the process of sending tailored texts, emails and push notifications based on a customer’s loyalty status.

So for example, you could set things up in a way where any customer who is one stamp away from a reward and hasn’t made a purchase in three weeks automatically receives a notification reminding them of how close they are. This message goes directly to their mobile device, and encourages them to complete their rewards cycle.You can even play on people’s natural competitive streaks by gamifying the process with loyalty badges and leader boards.

4. Send targeted communications

bobs burgers push notification
Bob's Burgers' push notification on the Stamp Me app

Perhaps the most efficient and effective way to make your loyalty program irresistibly addictive to customers is to personalize their experience. What does personalization mean?

In a nutshell…

1. You collect and store transactional data every time any customer makes a purchase with your brand.
2. You use this data to build a profile of each individual customer – what products they like to buy, what time they like to shop, how much they typically spend, whether they prefer to shop in-store or online, and numerous other data points.
3. You divide your entire customer base into segments based on shopping preferences, and each customer is categorized based on which segment best aligns with their shopping habits and consumer needs.
4. You send each segment tailored offers and communications that are most likely to appeal to them.

This is how brands are able to offer free shipping to the customer who always buys jeans and jackets online, while the customer who always comes into the shop for handbags and accessories gets a “Buy One Get One Free” offer for jewellery.

The process might sound complicated, but actually personalization is completely automated when you sign up to the right digital loyalty app providers. As an example, Stamp Me offers highly advanced personalization features and functions that are embedded into the very fabric of our state-of-the-art rewards platform, so you don’t have to worry about a thing.

Any customer who signs up to your loyalty app and makes repeat purchases will automatically receive tailored offers and enjoy a personalized experience with your brand.

5. Throw exclusive side promotions

screenshots of scratch and win game on stamp me app
Scratch & Win gamification on the Stamp Me app

Even if you’re running a very straightforward “Buy 6 X & Get the 7th Free” digital stamp card, you can keep customers engaged by offering spontaneous instant prize draw competitions. Scratch & Win Instant Prizes are a fantastic way to catch customers off-guard with a fun and thrilling side promotion they weren’t expecting.

You can also use social media to spruce up your loyalty program with fun prize draws that are exclusive to people who have downloaded your loyalty app and signed up.

It keeps your business front-of-mind, builds hype around your brand and (depending how you go about your gamified social media campaigns) it builds a community around your rewards program. If these aren’t the seeds for an addictive loyalty program, I don’t know what is!

Creating an addictive loyalty program is easy, with Stamp Me

The Stamp Me digital loyalty app is a remarkably quick and easy way to retain more customers and boost brand loyalty with an addictive loyalty program as early as today.

Our app allows you to digitize the traditional paper punch card system, as well as send targeted communications, tailored offers, gamified functions and a whole host of other incentives that will keep your customers engaged and excited about your brand.

Start your free trial today, or get in touch for more information and we’ll be happy to assist.

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