Oct
2

Incentivizing Loyalty: Get to the Points

Incentivizing Loyalty: Get to the PointsIn the virtual world, merely unlocking the front door of your online store is hardly enough to bring in shoppers. Web surfers aren’t curious enough to open just any door—they need an incentive to come in and wander around, to tell their friends about what they see there and to come back for another look later. While great products/services and outstanding customer service are key to success, with a plethora of options open to consumers, smart and engaging incentive programs can be a big boost for business.  Using points-based incentives to spur repeat customers capitalizes on two irresistible consumer forces: it is psychologically rewarding and it represents an evolution from the age-old idea of offering a reward to customers for engaging with a brand and remaining loyal.

The concept of incentivizing loyalty has grabbed a solid hold in the online marketplace and has become that “next big thing” that marketers always attempt to leverage. It may involve competing on social sites to earn badges, a top spot on a leader board, virtual currency, a claim to a geo-location, or simply a gift card. Recently, this phenomenon has evolved into a system for earning loyalty points, just as a shopper might earn reward points for using a credit card.

While loyalty incentives have been around for a long time (think airline miles and travel rewards), it has recently taken on a form to make almost anything inherently more engaging. Today, consumers can engage in more ways than ever with a brand, which means companies have more ways than ever to reward customers and visitors.  Points can be offered for visiting a website, inviting friends to check out Facebook content, Tweeting the answer to a question, checking in at the store’s physical location, or using platforms such as Instagram or Pinterest to demonstrate engagement. By incentivizing such engagements, brands create a win-win strategy for both consumers and businesses. With more options than ever before, copious amounts of internet-powered competition and noise, customers need clear answers to, “Why you?” And it’s a fair question.

The key is to provide reasons for customers to pick one business over another, to return and to share a brand’s content. The services that enable these promotions and points programs today have enrolled hundreds of websites that are engaging with tens of thousands of loyalty-program members. Anywhere from 50 to 100 percent of these members have repeated their engagement with the brand’s site, and they tend to bring others to the site with them.

Loyalty is no longer is focused on a single transactional moment, and transactions no longer are solely monetary.  Rather, loyalty programs can become sustaining social programs in which consumers are tweeting, posting, sharing to social streams, walking into stores and checking into geo-location sites.  This “transactional network” interconnects the brand’s presence with the consumer’s social needs, creating valuable layers of contact and information, as well as a loyal population of fans.

Source: Loyalty 360, July 3, 2012. Author, Ranjith Kumaran

In what ways are you offering points to your customers?

What reasons do customers pick one brand over another?

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