No business wants inactive loyalty program members – and yet, every program inevitably has them.
There is a whole host of reasons why a customer might become disengaged with your rewards program; from poorly balanced commitment-to-rewards ratios, to bad customer service experiences, unenticing rewards, mistargeted communications, a fractured omnichannel experience and more.
And while it’s definitely crucial that you identify these loyalty program mistakes and rectify them for a more efficient rewards experience, all is not lost with your lapsed loyalty program members.
There’s a number of techniques you can employ to win back these customers, and reignite the emotional connection between them and your brand. Here are five tips and examples for how to re-engage lapsed loyalty program members.
1. Offer customers a birthday reward
Birthday rewards are an excellent way to personalise the customer’s relationship with your brand, and to make sure your business is part of their special day. Birthday rewards don’t need to be lavish or overly sophisticated – a small token of your appreciation for their ongoing business is enough to leave a lasting impression and keep your brand front-of-mind.
Victoria’s Secret members receive a $10 gift voucher for their birthday each year, while Ulta Beauty takes a different (and very innovative!) approach; offering loyalty program members a free birthday gift as well as double loyalty points on all purchases during their entire birthday month.
If a customer has lost interest in shopping with your brand, a simple birthday reward could be all it takes to bring them back on-board.
2. Acknowledge the customer’s signup anniversary
The anniversary of a customer signing up to your loyalty program is the perfect occasion to re-engage lapsed members. Not only does it acknowledge a shared milestone and show that your business values its customers, but it’s also a fantastic opportunity to summarize their loyalty experience.
You might congratulate them on earning X loyalty points and redeeming Y rewards in the last 12 months. It’s also the ideal moment to point out how many points they currently have, and how many more they need in order to redeem their next reward.
Texas-based chain Cotton Patch Coffee knows how to acquire, retain and re-engage customers with its Cotton Patch Club. Members receive a:
Free appetizer upon signup
Complimentary dessert on their birthday
Free entree each year on the date they signed up
When combined, these three incentives work together to rapidly build registrations and continually engage members at several points throughout the year.
3. Tell customers if their loyalty points will expire soon
A few years ago, Starbucks upset a large portion of its most loyal customers when it neglected to inform them of their imminent demotion from Gold Level Status at the end of the year.
Rather than notifying these members of their status ahead of time and giving them a few pointers on what they can do to maintain Gold Level Status, the global coffee chain only informed them after the fact.
This breaks the trust between brand and customer, and removes the notion that customer loyalty is a two-way street.
The take-away here is that you can approach points expiry in two ways – take the customer’s points away and leave them feeling bitter, or give them tips on how to improve their loyalty experience and leave them feeling motivated.
As we’ve previously covered in our article about leveraging the Endowment Effect, people tend to place higher value on things that are already in our possession than we do on things that aren’t.
Simply letting customers know their loyalty points will soon expire is often incentive enough for the customer to re-engage with your loyalty program.
Hyundai Rewards provides its members with multiple ways in which they can maintain loyalty points that are soon to expire – either by making a purchase to top them up, or by redeeming them for a reward. The program gives members plenty of notice when points are about to expire, via numerous emails to ensure members are fully aware.
4. Entice them back with an abandoned cart email (or three!)
A well-written and strategically structured abandoned cart email can be highly effective in re-engaging a lapsed loyalty program member.
The advantage of having lapsed loyalty program members is that you presumably have their email addresses. Why not integrate an automated “abandoned cart email” function into your digital rewards platform that targets customers who never checked out from your online store?
You can follow it up with a second email a few days later, and perhaps a third one several days after that (and then give up… if you haven’t won them back by this point, they’re not likely to re-engage and you risk losing them as an email subscriber).
Here’s a snappy abandoned cart email from Charles Tyrwhitt, which uses a bit of tongue-in-cheek humour to sway a lapsed customer back to the checkout. Depending on your particular brand’s tone of voice, you might prefer to opt for a more direct and sincere approach, or another tone altogether.
5. Ask the customer where you went wrong
When all else fails, sometimes the best thing you can do is ask people where you went wrong so that you can improve for next time. Consumers are so accustomed to being pestered with digital marketing trying to sell them stuff these days, that sometimes a little transparency goes a long way.
By asking lapsed loyalty program members why you lost their business, you’ll often gain valuable (and brutally honest!) feedback that you can take on-board to hone your loyalty program structure and provide a better experience for your remaining members.
In the long run, this process prevents you from accumulating lapsed loyalty program members down the line.
Check out this enticing email that Anthropologie sends its lapsed customers to ask for feedback:
How to re-engage lapsed loyalty program members
The fact that you are asking yourself this question means you’re already fully aware not to judge your loyalty program’s success on the number of memberships, but on the number of active participants.
This is a crucial step towards understanding how to design an immersive loyalty experience that keeps your customers engaged, invested and emotionally connected to your brand.