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Loyalty Strategy

Why Rewarding Customers Straight Away Is So Important

Written by 
Brad Davis
November 15, 2022

It might seem counterintuitive to provide an immediate reward to first-time customers for their business – after all, who’s to say you’ll ever see this customer again? Rewarding customers straight away may seem absurd, right?

But if you consider this same transaction as an investment in the future of your brand-customer relationship, then it makes perfect sense that you would offer this customer a reason to come back again.

The first transaction with a customer is a crucial step to winning their loyalty.

It is the perfect time to get them join them to your loyalty program, so that you can have further opportunities to build a relationship instead of letting them walk out the door without having their contact details.

But how do you get first-time customers to join your loyalty program?

One of the best ways to achieve more loyalty program registrations is with a sign-up reward.

A loyalty sign-up reward can be the difference between a one-time sale and the creation of a loyal customer.

This train of thought is Loyalty Marketing 101, and it’s crucial if you want to retain customers and build brand loyalty. According to eMarketer, Gen Z wants instant gratification and same-day delivery from loyalty programs, above anything else.

Loyalty Program Sign Ups
Rewards upon signup

Loyalty programs are a way for customers to enjoy higher value for repeat business, so the best thing a company can do is show this value straight away.

Stamp Me has noticed that businesses who employ the strategy of rewarding customers straight away enjoy 3x more loyalty program registrations those that don’t offer any sign-up incentive.

Signing up to a free loyalty program requires zero commitment from the customer, and yet it assigns ownership to this newly created membership. By giving the customer an upfront reward, they’ve already made progress, seen results and the brand has begun building trust.

You can learn more about the psychology behind this in our other article on the Power of the Endowment Effect.

Maybe the best way to illustrate the importance of rewarding customers right away is to share some examples of techniques that many brands are already utilizing.

Here are some ways you can reward customers straight away when they join your loyalty program...

1. Provide an immediate discount

Have you ever been standing in a shop while a staff member scans your items at point of sale, and the employee has mentioned that you’ll receive a discount on today’s purchases if you join the shop’s loyalty program right then and there?

This is a very effective on-boarding strategy, because it instantly answers the age-old question: “What’s in it for me?”

Even if you don’t intend to shop with this brand in the future, why not take a few minutes to join the rewards program and save yourself a few bucks?

Stamp Me co-founder Shannon Magowan experienced this when he shopped at Japanese casual-wear designer Uniqlo for the first time last year.

Uniqlo’s exceptional on-boarding strategy ($10 off today’s purchase) escalated Shannon’s initial $49.90 sale into $200 of revenue from a single customer within a week. It also turned Shannon into a brand advocate.

shannon advice upfront rewards
Shannon Magowan

“Uniqlo understands that if you give a little, you get a lot back,” Shannon said.

“The reality is that the $10 investment is insignificant compared to the long-term value I offer as a returning customer.”

You can read his full analysis of strong vs. weak on-boarding strategies here. While the discount might have incentivized Shannon to join the loyalty program, it’s the next step that turned him into a brand advocate.

2. Send an email to show gratitude

You’d be surprised how much of an impact a simple welcome and/or thank you email can have on a customer’s first impression of your brand.

It doesn’t require much effort to configure your loyalty program in such a way that, when a new customer joins, they immediately receive a text, email or push notification welcoming them to the program. In fact, when you create a rewards program with Stamp Me’s award-winning loyalty platform, we can set this up for you.

Explain how the program works, and offer tips on how customers can maximize their rewards and accrue extra points. Congratulate customers on reaching loyalty milestones, offer birthday gifts, and periodically remind them of where they stand in regards to their next reward.

These are all automatic communications that brands can easily set up, and they constantly work towards fostering an emotional connection between your brand and your customers. You can start this process the moment a new customer joins your program.

Let’s go back to Shannon’s Uniqlo experience. Once he agreed to join the rewards program, the assistant patiently and professionally guided Shannon through the signup process on his phone at POS. The assistant also pointed out some additional features included in the app.

“After signing up, I instantly received a welcome email from Uniqlo, acknowledging my enrolment,” Shannon said. “It felt inclusive; like I was now part of a VIP club.”

“I left the store feeling good about the brand, and happy to receive email notifications. Uniqlo continued to send me online marketing for the end-of-season sale, which successfully grabbed my attention and I ended up making an online purchase within a week of signing up.”

Had Uniqlo not offered Shannon the signup reward, he wouldn’t have bothered joining the loyalty program, the brand wouldn’t have gained permission to contact him with targeted offers, and thus Uniqlo would have missed out on the subsequent sales.

3. Instant and ongoing perks for loyalty program members only

Loyalty program perks example of nike upfront rewards
Members only perks - Image Source: Nike

As the “e-commerce snowball” grows bigger and faster, you’ll notice many brands offering digital loyalty programs that are tailored for online shoppers, some of which offer perks like discounted shipping to all members – just for joining!

For industries like fashion and cosmetics, repeat purchases are typically frequent and upselling at check-out is common. Discounted shipping can equal huge savings for many consumers.

For brick-and-mortar businesses like cafes and restaurants, mobile app-based loyalty programs are the key to offering instant gratification. Digital loyalty apps can facilitate in-app payment and skip-the-queue privileges, which is a huge incentive for customers to join your loyalty program and enjoy immediate rewards in the form of VIP perks and benefits.

Starbucks and McDonald’s were among the first to introduce this, but even small independent businesses can access this level of sophistication in loyalty programs now.

You can find some more techniques for using VIP perks and benefits to drive customer loyalty in our other article.

Regardless of what industry your business falls under, there’s always a way to offer customers instant gratification for joining.

This is where a little brainstorming can go a long way. Be creative in developing some ideas for signup rewards that work for your specific business.

Referral programs are nothing new, but in recent years there’s been a shift towards rewarding the referred, not just the referrer. This technique satisfies both parties rather than just one, and offers the new customer an immediate reward for joining.

Meanwhile, there is already an element of trust for the brand because the referral comes from a friend. Millennials and Gen Z are more immune to traditional advertising than previous generations, so peer endorsement is becoming increasingly important.

At Stamp Me, we can configure our award-winning loyalty platform to accommodate your brand’s specific needs.

redeem reward message on phone
Redeeming a reward on Stamp Me

All of the upfront rewards and incentives mentioned above can be quickly and easily applied to your new digital loyalty program, when you partner with Stamp Me. We help businesses of all shapes and sizes around the world convert first-time customers into loyal customers through our highly sophisticated rewards platform.

Send customers tailored offers, spontaneous invitations to instant prize competitions and other engaging communications to reward customers right away, with Stamp Me. Get in touch with us today.

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