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Loyalty program participation and enrollment are two completely different things. Participation is when your loyalty program members are actively engaged in the program. Its success is based on a high level of member engagement, not on enrollment. In this post, I will explain how to boost your loyalty program participation rates.
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Enrollment vs. Participation
As I mentioned before, enrollment does not mean members are participating. Joining a program is easy, but getting people to engage, is the real goal. Typically, loyalty program enrollment is high but active participation is low. This is because many retailers both online and offline give a great incentive to join (which I recommend) but fail to offer any subsequent motivators or opportunities to engage. The success is in the follow-up. The goal is to entice people to join your program and then give them reasons to engage.
Boost Loyalty Program Participation The question now becomes, what do I do to get all the members I attract to my program to stay and participate? Here are 5 ways to encourage loyalty members to actively participate in your loyalty program:
1. Be Transparent A survey conducted by Colloquy Loyalty found that the number one factor behind active participation in loyalty programs is simplicity. An astonishing 81% of respondents state that ease of use is important to them. So how do you adjust your program to these findings?
Keep it simple. You want your program to be as transparent and user-friendly as possible. Make sure your members know everything they need to know to actively participate. You must be very clear on how they will earn and spend points. Have an area of your site dedicated to educating members on how many points can be earned and how. The most important ones to be clear on are the number of points earned per purchase and the number of points required to redeem a reward.
2. Lots of Ways to Earn Points Your members have grown tired of those standard retail loyalty programs that only give points when you make a purchase. They want a program that gives them a number of different ways to earn points. The same study by Colloquy found that 50% of respondents said that they participate more in programs that have multiple ways to earn.
3. On-Site Reminders and Cues In the online world, you do not have a cashier asking every person who checks out if they would like to collect reward points on their purchase. That is why you must strategically place loyalty program reminders across your website especially on your homepage, above the fold. Not only does this remind existing members to participate it also acts as a point of differentiation from your competitors. If you have a program and they don’t, a potential customer will likely choose you. You can also use other on-site promotion methods like floating tabs, slider or hero images, and even pop-ups (just be sure not to annoy your customer).
4. External Reminders and Cues Reminders on your site are great but they’re only effective if your customers are visiting you frequently. According to many studies, email marketing is the most effective and easy to use marketing tool available to today’s digital marketers.
A great way to boost participation in your loyalty program is to combine loyalty and email marketing into a “super campaign”. Use email to send your program members notifications relating to earning and redeeming points, special bonus offers and upcoming sales or promotional events. You can also email all of your non-program members to let them know about the benefits of the program. Combining your loyalty marketing and email marketing is one of the most effective ways to increase program awareness and boost loyalty program participation.
5. Obtainable Rewards One of the biggest mistakes I see with any loyalty program is making the rewards too difficult to accrue. How is anyone supposed to get the 20,000 points needed for your reward if you are giving 1 point per $1 spent on your tea site? They would have to spend $20,000 to get a reward. Would you participate in that program?
Your loyalty program members become hooked on your program when they first spend points on a reward, not as they are accumulating points. That is why you need to make it easy to obtain rewards. I like to recommend a substantial points reward for referrals. Help grow your membership organically. When a member refers a friend who makes a purchase, reward them handsomely and they will tell two more friends! I also like offering a few of what I call “aspirational rewards.” These are rewards that are designed to be ridiculously hard to achieve. They give your program a talking point and can help differentiate your program. Just be sure there are plenty of obtainable rewards as well.
How Do I Know if Participation is Improving? You now have a few things you can do to boost your loyalty program’s participation rate. But, before you race out and try all these new tactics at once, you will want to know how to measure success. Customer lifetime value, repeat purchase rate, and net promoter score can be key performance indicators. However, if you want to measure changes in your participation rate I recommend using your redemption rate. Your redemption rate shows you the percentage of your issued points that are being converted into a reward. If your members are participating, they will be spending their loyalty points. Start by performing the above equation today to get your baseline. Then make some of the above changes and measure your redemption rate again. An increase in redemption means that your participation is on the rise.
Here is one business we’ve worked with to go mobile. Watch this video about Denim Industries:
