Rewards points can be used by businesses as an efficient ways to encourage and reward customers with anything from discount coupons to freebies that could be redeemed choices.
A well-designed loyalty program depends in providing rewards that encourage the desired behavior of customers, for example, shopping more frequently or increasing the value of each purchase or by the act of recommending customers to friends. Establishing specific goals from beginning can help guarantee the success of these programs.
Discounts
Loyalty points are an effective way to build brand preference and create long-term customer relationships, increasing average order value (AOV), encouraging repeat visits from existing customers, and driving up recurring revenues. But loyalty programs need to be tailored specifically for every business’s needs in order to be truly effective.
Companies need to understand their target audience’s purchasing habits and motivations in order to create rewards that resonate with their target audience and produce tangible results. To do this effectively, companies may conduct market research or analyze customer data for valuable insights – this may involve conducting market research or analysing customer information to uncover valuable insights that allow brands to design rewards that resonate with target audiences and produce tangible outcomes.
Beauty product company Sephora offers customers an example of a loyalty program through their “Beauty Insiders” program, where customers can reedeem rewards such as discounts on future purchases or early access to limited-edition products. Fitness and wellness programs such as PureGym also enable members to redeem rewards such as free gym memberships or spa packages as rewards for being loyal members.
Businesses looking to implement a loyalty program that supports discounting must define the goals and reward tiers of their loyalty program. For instance, buyers may wish to redeem their points for free coffee and thus require accessing Square’s API in order to retrieve reward tiers and their respective discount values – specifically by calling RetrieveCatalogObjectRetrieveCatalogObject() of their Catalog API while substituting their Sandbox access token into RetrieveCatalogObjectRetrieveCatalogObject() function in their Catalog API.
Gift cards
Gift card loyalty programs can be an excellent way to both retain existing customers and attract new ones. Gift cards make an easy present choice for birthdays, baby showers, and other events – they make them even more appealing when combined with discounts that may be found either within the rewards section of your credit card company’s website, or through emails sent by them directly to subscribers.
Customer loyalty programs can increase revenue by offering exclusive experiences and discounted merchandise at attractive rates, but in order for them to remain sustainable they must balance attraction with sustainability in order to remain profitable over the long-term. While discounts for merchandise and experiences may add an incentive, their cost must also be factored in when considering long-term profitability.
When using loyalty points to purchase something, your reward will be added directly to your loyalty account and tracked as a regular transaction by your credit card company. While value may differ by retailer, bonus points may also be earned with gift card redemptions.
If you want to track the value of your loyalty points, creating a custom rewards currency within your payment system may be useful in doing so. For instance, creating one point per dollar spent can allow you to keep tabs on them easily while adding them into a loyalty program and displaying it online.
Freebies
Point-based loyalty programs encourage customers to choose your brand over competitors by rewarding customers for each purchase or other action that qualifies them with points. Customers typically earn points with every transaction or action qualifying them, and can redeem these for merchandise discounts, gift cards or freebies; such incentives can increase customer retention, AOV and repeat purchase behavior.
Conducting thorough market research and customer data analysis is the best way to establish which loyalty rewards will best resonate with your target audience. Doing this will yield insight into their purchasing behaviors as well as motivations and barriers that prevent their commitment. With this data at hand, you can design a rewarding program which encourages desired behaviors while meeting business goals.
Research can show you that price-sensitive customers appreciate personalized experiences, so if price sensitivity is one of their primary drivers, consider offering exclusive perks tailored to individual preferences. Or if your audience tends to be socially-minded, provide them with an option to donate their loyalty points to charitable causes. Also try surprising your customers with unexpected gifts to strengthen the connection to your brand and encourage word-of-mouth promotion – for instance fashion retailers could include free items with every order or hotels could upgrade loyal guests on special dates like their birthday or anniversary.
Travel
Travel rewards provide the greatest return on your loyalty points, but how you choose to use them may depend on who is redeeming your points. Many experts advise redeeming airline frequent flyer miles for international business- or first-class flights; however, you should do what makes you happy; whether that means using Chase Ultimate Rewards points for a New Orleans ghost tour or American AAdvantage miles towards renting a car from American AAdvantage miles, feel free to do what suits your personal situation best.
Airline and hotel loyalty programs often offer exclusive perks to higher-tier members, adding value. Marriott Bonvoy, for instance, provides members who spend 200 nights annually a free night redemption at select hotels as an incentive. In addition, this program features tiered benefits like free Wi-Fi access and late check-out services as well as sweet-spot awards offered at lower prices than others award redemption options.
Utilizing a free tool such as SeatSpy can help maximize your flight redemptions. The website checks award availability across various airlines and displays both cash and point costs; additionally it lets you filter results by specific routes for easy comparison of current airline and credit card loyalty account balances.
Points Path, a Google Chrome or Microsoft Edge browser extension that displays award pricing alongside paid rates when searching on Google Flights is also extremely useful. Furthermore, this tool can identify which transferable airline loyalty program points can be used to book flights as well as when to use cash versus points for booking flights.