10 Ways to Liven Up Your Loyalty Program

8. BUILD A REWARDS PROGRAM COALITION

Increasing awareness is a central driver of loyalty program engagement, and goes hand in hand with developing a clear campaign. A surefire way to generate awareness is to align a brand's reward program with that of another brand, says Greg Philips, senior vice president of business intelligence at Fuel Rewards. Fuel Rewards works with Shell, MasterCard, and a number of other partners to deliver a fuel-based loyalty rewards program. Together, the brands form a rewards coalition that harnesses the combined potential of their marketing reach.

After enrolling in the Fuel Rewards program online, consumers earn fuel rewards savings by shopping at participating stores, such as Kmart and Winn Dixie, with their MasterCard and then filling up on gas at Shell locations. Customers receive a three-cents-per-gallon rollback on all purchases, which is reflected at the next fill-up. "Once customers sign up for our program and link their MasterCard or other existing payment cards to Fuel Rewards, there's nothing to redeem or request. Customers see the savings immediately at the pump," Philips explains. Other promotions occasionally offer customers potential savings of up to 25 cents per gallon. And recently, Fuel Rewards added new ways to earn the rollbacks through partnerships with JCPenney, Toys"R"Us, and Olive Garden.

"One of the biggest advertising vehicles we have is social media. A lot of our users take photos at the pump of the before-and-after price and share that on Facebook or Twitter, which is a really powerful piece of our marketing," Philips says. The reason that Fuel Rewards' platform has caught on so well is that all of the brands that participate are able to cross-promote content. "We're able to increase awareness because we've got a number of major brands all sharing material that leads back to the same loyalty program. The loyalty program has a lot more momentum and draw when you've got a combination of companies like MasterCard and JCPenney behind it," he adds.

But Fuel Rewards partners aren't the only ones that have embraced the coalition trend. Companies such as Uber and Starwood Hotels, for example, have launched a joint promotion that offers bonus Starwood rewards to customers that link their Uber accounts to the hotel's loyalty program.

9. LEVERAGE GAMIFICATION

Customers love earning freebies and redeeming cash-back offers, but loyalty programs don't always have to offer rewards that have monetary value to grow engagement. Gamification is a fairly new approach to loyalty building, but has, so far, proven to be a worthwhile endeavor for brands that find a platform that works for them.

Gamification-based loyalty programs have the most potential in a knowledge-sharing environment for customers or in an employee community, where a little healthy competition drives users to engage. Wireless carrier T-Mobile, for example, worked with gamification platform provider Bunchball to build T-Community, a gamified employee collaboration network for its customer service agents. The goal was to help employees keep up with the fast-moving mobile technology space by fostering conversation among them.

Employees who responded to questions or comments in the forum were rewarded with "likes," points, and badges that could all be used to secure a position on the leaderboard. Though there were no monetary rewards involved, users kept coming back to the community. Thanks to the gamified elements, there was a 96 percent increase in participation, a 583 percent increase in contributions, and a 783 percent increase in responses, according to a Bunchball case study.

10. MEASURE IMPACT

One of the biggest mistakes that companies can make is to measure loyalty program effectiveness incorrectly, or not measure it at all. While it's beneficial to keep track of metrics such as reward redemption rates, Robbins recommends that brands focus on the way loyalty programs are affecting other areas of business. In T-Mobile's case, for example, the gamification-based platform not only boosted employees' loyalty to the community, but also resulted in a 31 percent improvement in customer satisfaction scores.

When dealing with a loyalty program in a traditional B2C environment, however, Robbins says there's an easy formula for measuring impact. "You take the number of customers that enroll, multiply it by the percentage of customers that actively use the program, and then multiply that by their increase in spending," he explains. That, according to Robbins, gives companies an understanding of "the actual business value" of their loyalty program efforts.

There is no right or wrong way to develop loyalty programs, but brands that tap into customers' or employees' emotions, give them flexible and personalized options, and support interactions across connected, cross-channel environments tend to have more success than companies that are reluctant to embrace new trends. Programs will need to continue evolving in response to social and technological changes, and brands that are slow to adapt run the risk of losing customer loyalty. "In this day and age," Barnard says, "that’s just not a risk you want to take."

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Associate Editor Maria Minsker can be reached at mminsker@infotoday.com.

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