PART 2 of 2: The DOs and DON’Ts of Setting Up a Loyalty Program
This is the final post of a special two-part series on the basics of how to set up a loyalty program. The first post covered all the DO’S. Brace yourself, all. These are the DON’TS.
1. Don’t use a physical punch card.
We’ve already discussed the dangers of the Wallet Obesity Epidemic, but there’s no harm in reiterating our point. DON’T USE PHYSICAL PUNCH CARDS. The savvy digital consumer has moved beyond paper cards. People are even doing away altogether from carrying their credit cards, opting instead to consolidate plastic and paper onto one card. As I write this, I’m looking in my wallet right now and I see six loyalty cards that I’ve had since high school. Just think about that for a moment. High school. The effectiveness of physical cards have joined the nostalgic ranks of acid washed jeans, Garbage Pail Kids and bad perms. All kidding aside, if you’ve enlisted physical punch cards as the means to your rewards program, you’re at a major disadvantage. Physical cards can’t track spending data. They’re unable to offer any information that you can then use to re-target your customers with. Plus, you are entirely reliant on the hope that your customers will remember to use the card, let alone carry it with them. Hoping and wishing never make for a good strategy. Be forward thinking and go where your customers already are – up in the cloud.
2. Don’t spam your customers.
Be real. No one likes spam mail. Except maybe for that Nigerian prince that keeps asking everyone to send him money. Why then are stores spamming people with offers for things they’ve never even bought? A 20 year old guy in college doesn’t need prenatal vitamins, so why is he getting emails about them? To be perfectly honest, we have no idea why. But we suspect these may be the same people that are still using a physical punch card.
In all seriousness, these mass mailings happen for a few reasons:
- Some businesses don’t have the ability to capture customer spending data.
- For those businesses that are able to capture spending data, they don’t take the time to analyze it or take action from the data.
- A minority of businesses actually think “spray and pray” mass mailings work.
In this highly connected world, setting up permission-based marketing programs like opt-ins to receive emails or SMS to keep customers informed of events and special promotions will help build up the long term value of customer relationships. For instance, Jamba Juice’s Insider Reward™ program sends out emails and SMS to let customers know about their reward status, reward expiration, and special promotions or offers at their preferred store locations.
“When I received my email reminding me that I only had 10 days left to redeem my Jamba points, it was just the gentle push I needed to go grab freshly squeezed juice for lunch that day,” says Spendgo’s communications lead Stephanie.
3. Don’t make your program impossible to understand.
This one seems like a no-brainer, but it’s surprising how many loyalty programs out there make it nearly impossible to understand. Programs which require the purchase of three entrees, two appetizers, four large beverages, and one dessert on non-holidays in order to earn one free beverage feels like a game of chess. Don’t make earning points a complicated process where you put the pressure on the customer to figure it out. Remember the acronym K.I.S.S.? “Keep It Simple, Stupid.” Make your loyalty program easy to understand and even easier to earn points.
4. Make the juice worth the squeeze.
If it takes seven months to earn a measly reward of one free cup of coffee, chances are people have better things to do. The well-known technology reporter Sarah Lacy has been known to complain about a widely-used online dining reservation system whose loyalty points program is “slightly better than a punch in the face.” Ouch. Be sure to evaluate your current loyalty program to see if reward achievements are attainable and redeemable in a reasonable enough time. National BBQ chain Dickey’s Barbecue Pit is a good example of how to do things right. When the average individual meal costs around $10, Dickey’s offers $8 off for ever 79 points earned. Seems like a smart offer, right? We think so, too. Remember, no one is going to participate in your program if it isn’t worth it. Make the juice worth the squeeze.