“It is easy to reward loyalty, but it’s loyalty is one tough customer.”
Businesses that have customer rewards programs have made the decision to reciprocate their customers’ loyalty. Not only is it because they know the fact that it costs more to gain new customers than to keep existing ones, but also they believe that customer loyalty should be recognized and rewarded.
Most customers would like to be loyal to a certain business where they can always get the best products and experience the best services. They would like to keep on returning and keep on having the same wonderful experience. Not all customers would demand to be rewarded for their loyalty. Getting the best of the business at all times is more than enough reward. Regardless if they demand for it or not, it is just proper to reciprocate customer loyalty.
Not all customer rewards program work. In fact, most fail because they were not well-designed, managed, and sustained. The most successful customer rewards programs benefit both the customers and the business. It should always be a Win-Win result. You need to invest enough time and effort in designing your customer rewards program, but should be simple enough for customers and for you to implement, manage, and sustain.
Below are common pitfalls of failed customer rewards programs:
a. No clear objectives
c. Not well promoted
d. Difficult to earn points (for point system programs)
e. Too complicated or confusing
f. Does not add value to both the customers and business
g. Rewards are few and not enticing to the customers
h. Frequent changes in the program
i. Redemption is difficult and takes too much effort
j. Stiff timelines in redeeming rewards
There are a number of well-designed and successful customer rewards programs that are standing out from the competition, and the “My Starbucks Rewards” is consistently raved about by customers. Let’s review why “My Starbucks Rewards” is very successful.
- Well promoted
- Instructions and mechanics are simple and easy to understand
- Variety of ways to earn “Stars”
- Each customer has a profile/account
- Level ups for more benefits
- Customer engagement
- Customers are rewarded with what they love about the brand
- Easy redemption
- Utilizes current technology for free (Starbucks App)
- Tie ups with other businesses/establishments
- Employees are knowledgeable about the program
There’s no doubt that Starbucks did a wonderful job in designing their customer rewards program and there’s no question why it’s very successful.
Now if you already have an existing customer rewards program, do a quick review on how it’s doing. Can you honestly say that it’s effective? Is it rewarding the right customer behavior? Are you getting the results that it’s designed for? Or do you think that there’s a need to go back to the drawing board?
If you currently do not have a customer rewards program yet, do not quickly go about and implement one. Again, it needs to be well-designed in order for it to work and be successful.