If you look around today, you quickly find there are numerous choices for consumers. Finding, engaging, and retaining loyal customers has nearly become an art form unto itself.
Also consider the impact of loyalty fatigue: The average consumer belongs to more than 14 loyalty programs. That makes it even more challenging for brands to keep customers engaged.
That leads us to the promise of premium loyalty programs: Members pay an annual fee for instant and enhanced benefits they can use right away.
Premium loyalty programs provide retailers elevated engagement from a brand’s best customers, more order frequency, higher AOV, and more valuable data.
So, let’s look at 5 strategies to employ that will heighten engagement from your premium loyalty program members.
1. Member Enrollment Activation
You’ve cleared the initial hurdle of acquiring a member that includes a risk-free trial period, enrollment incentive, and welcome messaging.
Ensuring your member takes advantage of that incentive item and clearly restating program value in your welcome message is the first step in program engagement.
Customers that cancel during a trial period will cite “did not use” as primary reason. That’s not an indictment of your program value, it’s a failure of your engagement strategy.
An aggressive retention effort is not the right response here. The membership may be extended for a short period, but that value can be offset by customer dissatisfaction with the process ending in negative social media posts.
Early engagement is absolutely crucial.
Your member needs to realize value prior to an initial membership billing event. Transactional program benefits are important; however, you cannot rely on a member making a purchase during the trial period.
Passive benefits where the member is not required to take action to receive value are essential. Surprise enrollment rewards, free content, and free digital magazine subscriptions fit the bill.
For example, when members sign up for GameStop’s PowerUp Rewards Pro program they receive a subscription to the print version of Game Informer. Also, they receive a welcome gift offer to buy two games and get one free coupon for pre-owned games that was worth up to $55.
That initial welcome period is a critical time to show your new members the value of the program in a tangible way.
2. Member Benefit Reminders
You cannot assume that your program’s value proposition is obvious or will remain top of mind.
A loyalty membership does not qualify as an essential item in your customers’ daily lives where everyday engagement is expected.
Continuous messaging of program benefits and their related value is paramount. Determine the proper message cadence for your members and then differentiate your communication and benefit promotion guided by member lifecycle status and engagement history.
Special promotions, sweepstakes, contests, and social media are effective engagement tactics when coupled with a clear call to action.
Sephora, REI, and Starbucks are a few examples of brands who do a great job reminding members about their loyalty program benefits.
Communication of program elements that offer members peace of mind can be very effective, including benefits like price protection, extended return policies, and extended product warranties.
Regularly reminding members of their benefits is a great way to keep your brand and program top of mind.
3. Transactional Engagement
Every purchase presents an opportunity to cement your bond with your member. Amazon Prime membership benefits are extensive; however, the core free shipping benefit on purchases remains a program lynchpin and a primary reason for Prime’s continued success.
Prime members spend more than twice as much as non-Prime members.
A premium loyalty program comes with greater benefit value expectations versus traditional free programs. It should be evident to your customer that their membership status and reward options set them apart from other customers and separate you from your competition.
Transactional benefits like automatic discounts and free shipping on every purchase show your members they are valued and they do not need to shop elsewhere.
Transactional benefits come with a cost but are supported by program membership fees where long-term member participation is directly correlated to program value.
More importantly, those benefits enhance engagement and target core KPIs where the cost is offset by increases in member incremental spend in the form of higher purchase frequency and higher AOV.
Transactional engagement cannot be understated as a key element in any premium loyalty program.
4. Personalizing Member Communications
The best loyalty programs are informed by zero-party and first-party data. Customer detail that moves beyond gender and age range to interests and activities allows for higher levels of engagement through personalization.
The continuous receipt and refresh of customer data will allow you to implement a personalized calendar approach to customer engagement that moves beyond core program benefits.
Birthdays, graduations, weddings, and seasonal holidays become opportunities to deliver the right promotion to the right consumer at the right time.
According to Forrester research, most loyalty program members want to receive updates on their benefits, however, most programs do not do this well. In fact, Forrester reports that most brands send loyalty members and non-members the same promotional emails.
Impactful and personalized loyalty program communications play a huge role in attracting and retaining members. These communications represent loyalty moments and show your members that you appreciate them and want to do something memorable for them.
5. Member Status Rewards
One measure of a successful premium loyalty program is average membership tenure.
Members pay a fee to belong, so the bar is raised.
A certain level of inactivity may be acceptable with traditional loyalty programs, not so with a premium program. A membership fee compels the customer to assess the value of the program on an ongoing basis.
A brand’s failure to live up to expectations will drive program churn.
Members need to be rewarded on a consistent basis. More specifically, membership tenure should be acknowledged and celebrated.
A traditional loyalty program’s tiered benefit strategy should be considered. A member that reaches their 1-, 2- or 3-year milestone is extremely valuable to you and you need to reciprocate.
Acknowledging milestones and delivering commensurate program value on these occasions will certainly keep your members engaged with your brand.
Know Why Your Customers Chose to be Members of Your Premium Loyalty Program
It all comes back to knowing your customers and what drives them to choose your brand and become members of your premium loyalty program.
Remember to always leverage customer insights to always deliver relevant and personalized benefits.
If you effectively welcome new members, routinely remind them of their great benefits, give them updates on those benefits, surprise and delight them, and communicate effectively, you will be running a highly successful premium loyalty program.
Tony Muro
Tony is Vice President of Strategic Partnerships at Clarus Commerce. For over 25 years, Tony has driven revenue generation for Financial Service, Retail, Ecommerce and Travel & Hospitality partners by delivering winning customer acquisition, activation and retention solutions. Tony is an empty nest newbie with two daughters just taking flight. He's also a lapsed Minnesota Vikings fan who can be found tormenting his over 40 soccer league opponents on the weekends.
