To Get the Most Out of Your Loyalty Program, Target Low-Frequency Customers
So, if the value of your loyalty program depends on your ability to attract lower-frequency members, how do you do it? There are three key factors:
- Design your program to appeal to the low-frequency segment.
- Make it easy for people to join and participate.
- Never stop enrolling new members.
Design Your Program for the Low-Frequency Segment
Focus the design on low-frequency guests. They will need to understand the value proposition quickly and be compelled to join on the spot.
A well-designed program motivates guests to change their behavior. It will motivate guests early in their membership lifetime by rewarding them for positive behavior. Until members have experienced their first earned reward, they will be skeptical of the program. Make sure your low frequency rewards are desirable to the target audience, and attainable.
Make It Easy to Join and Participate
Your best guests will eagerly join your program. They will download a mobile app, connect their credit card, complete a long enrollment form, and possibly pay a fee. They know there will be a benefit in joining. However, a program’s penetration rate will not meet critical mass by focusing only on these top-tier guests.
To compel low-frequency guests to enroll, the program needs to be easy to join. If you’re telling guests there’s only one way to enroll in the program and they have to use that method, many of those guests just won’t bother. The more ways that guests can enroll, the more likely a potential member is to complete the registration. To reach a critical mass of members, offer multiple ways to join the program, such as through mobile apps, text-to-join, mobile-friendly registration web pages, kiosks, iPads in the store, and even paper registration forms. We have seen incremental increases in new members with each type of registration process added to a program.
Never Stop Enrolling New Members
As we have seen, sustaining growth beyond the first few months of a program depends upon attracting low and infrequent segments. They may not visit you during the first two months of the program, so if you stop enrolling at that point, you’ll miss them. Also, since new customers tend to visit with lower frequency in the beginning, you need to get them to join your program when they discover you.
Your employees and servers are the programs’ best ambassadors. They must understand how the loyalty program benefits them, it must be simple for them to use, and it must be easy for them to explain the benefits to guests. Falling short in any of these three areas will likely discourage your servers and employees from inviting guests to join the program.
Continue to promote the program’s benefits inside the organization as well as outside. Provide operators, franchisees, and executive teams with information about how the program is impacting the brand’s success. Keep point-of-purchase materials in place throughout the life of the program. Consider implementing periodic employee contests to stimulate enrollment of new members.
Bottom Line
When setting goals for the organization, be aggressive and aim for at least a 15 percent loyalty penetration rate. Look to the example of Panera Bread, which reported a 50 percent loyalty penetration rate in its recent 10-K investors report. Your brand can do it, too.
Getting to this level means you will need to enroll lower-frequency members, which is also the key to producing incremental revenue. Experienced partners know how to design the program to attract this group of clientele, employing ongoing enrollment campaigns that are designed to compel the infrequent group to join the ranks of the brand’s most engaged customers.
Data analytics expert Lee Barnes leads the data insights team at Paytronix (www.paytronix.com), a leading provider of reward program solutions whose guest engagement platform helps more than 300 restaurant and retail chains manage and grow more than $18 billion in guest spending. Barnes is a self-confessed data geek who can often be found digging into the data with his team to optimize guest engagement with more than 165 million loyal guests—through mobile, social, and today’s most innovative digital marketing tools. His undergraduate degree in mathematics and MBA from Harvard Business School gives him the unusual ability to both execute complex analyses and translate the results into ideas that business leaders can use.