Today, the average American household is a member of 29 reward programs… but they’re only active in 12. Why, you ask? According to CEB Iconoculture research, some programs are just too confusing. In a recent study, the research company found that 21 percent of members didn’t know if they could earn extra rewards for specific purchases. Almost half of all members didn’t know if their rewards had an annual maximum limit, and 20 percent didn’t know if their rewards had an expiration date.
Ultimately, consumers only have so much time to spend thinking about loyalty programs, and if they aren’t adding value to their lives, they’re no longer worth it. So, how can you make your reward program the most rewarding? Start with these four tips:
- Make it simple. Is it easy to understand the program? Is it easy to earn points? Is it easy to redeem rewards? The answer to all of the above should be “yes.”
- Make it flexible. Maybe sometimes your consumers want to redeem for cash, while other times they want to redeem for prizes. Some consumers may want to redeem right away, while others may want to wait. At the end of the day, consumers want to have a choice in the matter. They want their rewards on their terms.
- Make it relevant. Consumers tend to disapprove of companies hyper-focused on gaining new customers, instead of retaining the truly loyal ones. According to Hubspot, it costs a business about five to 10 times more to acquire a new customer than to sell to an existing one. Another fun fact: Current customers will spend 67 percent more than new customers, so they’re definitely an audience worth intriguing. With that in mind, make sure your reward program appeals to new customers, but ultimately rewards the ones who have been loyal for years. Make sure it understands their behaviors, wants and needs.
- Make it an experience. While consumers like their exclusive discounts, Forbes says they’re even more interested in incentives for living a healthier lifestyle, sharing on social media, participating in social responsibility programs or practicing energy conservation. They’re looking to be rewarded for behavior, in addition to, or instead of, just dollars spent.
What’s your favorite reward program? Tell us in the comments below.
Read more: Reward programs are here to stay, and here’s why.