Why Loyalty Programs Need to Be Personalized

Why Loyalty Programs Need to Be Personalized

These days, it’s commonplace to make a purchase at a shop, cafe or online store and get asked to join its loyalty program. Many times, these programs are enticing. Getting perks for simply continuing your spending habits seems like a no-brainer and is probably why U.S. consumers hold more than 3.8 billion memberships in these kinds of programs.

At the same time, companies are more than well-aware of all the benefits they get from implementing loyalty programs. After all, what’s better than having customers that wholly trust and recommend your brand? And this is true beyond retail. Think of hotel loyalty programs or rewards credit cards.

Just think about the 80/20 rule. Known officially as the Pareto Principle, when applied to sales, it suggests that 80% of sales come from only 20% of the customers. In other words, it’s a relatively small group of loyal people that is often the driving force behind a successful business.

Loyalty Programs: Great In Theory, Not Always In Practice

Looking at the numbers, it’s no surprise that loyalty has become a priority for all kinds of companies. When a customer is loyal, they spend more money, spend more often and become an advocate for the brand.

  • 57% of consumers spend more on brands they’re loyal to.
  • Loyal customers are 5x more likely to purchase again.
  • 59% of loyal customers are more than willing to refer a brand to friends and family.
Many loyalty programs, with their benefits, deals, and rewards, are missing a vital component: personalization.
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In many cases, efforts to inspire and strengthen this kind of devotion have taken the shape of loyalty programs. Hoping to turn casual buyers loyal and keep top customers coming back, companies design programs where loyalty is acknowledged and rewarded.

But despite the high expectations for these programs, they don’t always deliver. Customers may be willing to join — the average consumer has around 15 loyalty memberships — but are rarely active in more than half of the programs they’re a part of.

  • Only 18% of consumers engage with all of the loyalty programs they belong to.
  • 41% engage with less than one quarter of the loyalty programs they belong to.
  • 65% of consumers engage with less than half of their loyalty programs.

What it comes down to is many of these programs, with their benefits, deals, and rewards, are missing a vital component: personalization.

How Personalization Gets Results

Every day, consumers are bombarded with promotional messaging from every direction, whether it’s emails and texts or app notifications and social media ads. The worst part? They’re mostly irrelevant and unhelpful!

To keep from being constantly distracted by all of these messages, most of us have developed an evolved form of a little something called “banner blindness.”

Banner blindness:
A phenomenon where web users ignore content that looks like advertising banners

Originally referring to internet users consciously and unconsciously ignoring advertising banners on websites, the phenomenon has turned into “ad blindness,” in which any kind of generic advertising is recognized and dismissed almost instinctively.

Unfortunately, many loyalty programs fall into that category of being easily ignored. By operating without personalization in mind, their communications turn generic and, ultimately, irrelevant.

Free White Paper - How to Make Your Loyalty Program Personal

A majority of loyalty program members (78%) are unsatisfied with the current level of personalization of their programs. They want to be treated like the unique individuals they are, not made to feel like just another random customer. And when loyalty members do get that personalized treatment, results follow.

By incorporating Personalized Video in loyalty program campaigns, we’ve seen over 3x more conversions and dramatic increases in both engagement and sales.

Results From Personalized Loyalty Campaigns

You too can get improved results when you make personalization a priority. To help you get started, here are 3 ways you can get personal with your loyalty program.

3 Ideas For Personalizing Your Loyalty Program

3 Ideas For Personalizing Your Loyalty Program

1) Start the Relationship Off Right

From the very beginning, your communications with your loyal customers should have a personal touch. Adding relevant details early will set the tone of your program, emphasizing that you value each member individually and establishing that your messages are not one to be ignored.

A great opportunity for this is onboarding. It’s critical for your members to understand the benefits of your program from the start. To capture their attention, include personal details in the explainer as opposed to sending generic introductions to every new member.

In addition to having them pay attention, though, you’ll want your members to be able to recall the benefits over time. Make your onboarding process memorable by presenting the information in video form. With visual and storytelling elements, video makes complex topics easy to understand and remember.

Sam’s Club did a great job of this with their cashback onboarding video, which included the customer’s exact reward amount and step-by-step instructions — with visual aids — on how to redeem it.

2) An Offer With Their Name On It

A popular way to keep customers engaged is to send them offers regularly. To ensure these offers catch your members’ attention, add a touch of personalization.

While addressing your members by name is just the tip of the iceberg, it’s a critical part of signaling that this offer is for them, making them feel special and attentive to your message.

From there, leverage membership data to craft a relevant offer. Try to include information to help them with the next steps, as well, such as the closest location to them or a quick link for them to make a purchase.

Watch how Celebrity Cruises combined engaging video with personal details when offering a special invitation and discount for their Elite Plus member.

3) Let The Good Times Roll

You can also improve engagement by reminding members of the value that your loyalty program, club or subscription service brings.

Compile all the activities and benefits that they were able to experience from being a member and present it in an entertaining way that will have them ready to dive back into your brand. Remind them about the good times you’ve had together. A year in review can be a great way to do this.

End with a personal invite to continue the journey together, a special offer or simply a thank-you for their loyalty.

Quick tip: Make the content easily shareable to boost exposure. Fun and data-driven videos are great for members to post and share to their network on social media.

More Ways to Get Personal

You can also check out how other loyalty programs have been leveraging data-driven video. Or schedule a call with an expert to get a demo on how Personalized Video can boost engagement and drive ROI.

We dive deeper into the best strategies and methods for personalizing your loyalty program in our free white paper. Check it out and let us know what you think.

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Cheryl Rodewig

Cheryl Rodewig is a marketer and journalist published with international magazines and brands. She loves using data to craft meaningful stories and build connections with diverse audiences.