Customer rewards programs have witnessed a remarkable evolution over the years, something that might warrant a digital-double take. What began in a hand-curated fashion -- the earliest programs were the card-punch variety, a still-adored tradition offered, perhaps, by your favorite local yogurt place or roastery -- met a new paradigm in the 1980s, when American Airlines introduced the very first frequent flyers program. For the first time, travelers could collect miles toward future flights, so long as they stayed tried and true and flew with American Airlines. But now that we live in the digital age, businesses realize that building brand loyalty and community depends on developing digital incentive programs that are both accessible, and as delightful as any rewards of the past. If anything, the bar for delight is set higher than ever.
Customer rewards come in a multitude of forms, ranging from digital coupons, company VIP memberships (e.g. Amazon Prime), and of course, digital gift cards. Companies spend over $2 billion on rewards programs annually, and on average, every American household belongs to 14 programs. Maintaining a close bond with the customer, particularly in competitive or price-sensitive markets, is paramount.
When a business builds out a customer rewards program, a host of considerations should be taken into account, and it can be difficult to know where to start. And this, of course, is why we’ve put together the checklist for managing a rewards program:
1. What kind of rewards should your business offer?
The saying “different strokes for different folks” never feels truer than the moment a company has to choose its own adventure incentive. Determining which incentive option will appeal to your customer base while also fulfilling the needs or constraints of your business is key, and this decision should be made at the outset.
It’s important for the rewards program to champion the rest of the brand strategy -- e.g. if your business operates via brick-and-mortar, a more classical points (or “punch”) system could be appropriate. Whereas, if your business operates entirely through the digital sphere -- e.g. via a mobile app -- then a digital medium, like a digital gift card, would fit the bill.
2. Have you communicated the value to your customers?
The biggest reason customers leave rewards programs is that they can’t see the proverbial light at the end of the tunnel -- and similarly, the big reason they stay is if the reward is valuable and relatively easy to access. Make sure to effectively communicate the process by which customers redeem rewards, and ensure at the get-go that the reward is appealing! A great practice is also to send proper notification -- push, email, or text, for instance -- when a customer is eligible for a reward. Not only will this increase engagement by adding a special moment to a customer’s day, but it will uncomplicate and streamline the customer experience at large.
3. Will the data collected from your program be organized in a way that’s useful?
You can’t serve your customers if you don’t understand your customers, and rewards programs provide a rich trove of data on customer habits, purchase patterns, and trends invaluable to any company. The data will not only illustrate the kind of rewards that appeal to customers, but also the kind of messaging and delivery that captivates them.
Tremendous customizes dashboards for every business so that all data incoming from rewards programs are structured in a way that’s helpful for insights and future decision making. With the Tremendous platform, all data can be quickly accessed and visualized for a team’s optimal performance.
4. What is the true cost of your rewards program?
If you recall the statistic from above, rewards programs can be costly -- and also cost-effective, depending on how well they’re built and managed. To ensure a positive ROI for your program, it’s critical to determine a truly accurate understanding of associated costs. A rough estimate of costs won’t cut it -- make sure you know both set-up costs and ongoing costs, as well as any hidden fees for premium features or transactions. For instance, with Tremendous, the platform is free, and all of our digital reward products (digital Visa cards, Mastercards, e-gift cards), you just pay for the rewards that you'd like to send.
5. How easy is the set-up process?
Depending on the vendor, there might be a long lead time to set up your rewards program. Sometimes this can take weeks, depending on the complexity of your program, reward types, and reward delivery.
With Tremendous, you can get an account in just minutes and start sending rewards within a day. Tremendous also makes it easy to use their REST API to send rewards through your existing applications.
Make sure you're getting the most out of your customer referral programs! Feel free to reach out to Tremendous if you'd like some help from us!