Building a Better Loyalty Program Through Reward Strategy Best Practices

A successful and sustainable loyalty program offers the right mix of desirable rewards as an essential ingredient.

Desirable rewards are especially attractive and useful for credit card, travel, and hospitality, and wellness programs, which have broad bases of very diverse members.

Loyalty360 hosted a webinar titled, “Reward Strategy Best Practices for Your Loyalty Program,” on Tuesday, which was presented by Blackhawk Engagement Solutions, that focused on the theme of increasing loyalty with reward strategy best practices that align program objectives with the right mix of rewards and delivery methods.

Sally Jacks, vice president of digital sales, Blackhawk Engagement Solutions, discussed some central themes to help loyalty marketers along with these vitally important themes.

Growing loyalty engagement with better rewards:

The right rewards: (One of our key loyalty partners has seen YOY growth of more than 200 percent driven, in large part, by the variety of e-gift brands.)

The right reward values

Immediate delivery creates connection

Enable daily shopping

Increase earning opportunities with Gift Cards

The Right Reward Strategy Can Exponentially Increase Your Participation:

On average, consumers used 5.2 gift card and 5.7 e-gifts (In 2016, the average consumer engaged with more than 10 gift cards)

By Delivering the Rewards People Want, You Create More Perceived Value for Your Points:

A better reward mix can increase participation 3-5X

The Right Reward Values: Build a mix of achievable, accessible, and aspirational rewards

Customer may want to redeem for a $10 gift card or save for a trip to Paris

Curate a selection that serves your customers’ needs

Jacks discussed the Loyalty Rewards Pyramid:

Achievable: $5-$10 (three months)

Accessible: $10-$50 (six months)

Aspirational: $50 or more (takes six months or more to reach)

Immediate Delivery Strengthens Connection:

Immediately reinforce loyalty behavior

Positive experience brings customers back

Reward in hand creates great brand connection

Increase Engagement−Enable Daily Shopping:    

Create additional loyalty engagement

Drive points redemption for accounting

Jacks noted a customer preference for gift card purchases. In fact, Mercator forecast that the gift card market will reach $372 billion in 2018.

Increase Earnings with Gift Cards:

Ability to increase points with gift card purchases

Implement custom gift card mall

What’s more, Jacks and Theresa McEndree, vice president of marketing, Blackhawk Engagement Solutions, told attendees they should not forget about Fraud Management.

Reward fraud management should include best practice considerations:

Two-factor verification for new users

Limits on point transfers

Controls over gifting

Daily velocity limits

Device ID if possible

Developing the Right Strategy:

Partner with a single-source vendor that has access to all the rewards

Work to negotiate promotional periods into your agreement

Don’t forget about fraud management

Leverage industry best practices for what rewards meet your demographics

Take advantage of marketing and vendor relationship to support a strong program

Look for full-service API and customer care (“Make sure the vendor is providing technology, rewards, fulfillment, along with customer service and customer care,” McEndree noted.

Growing loyalty engagement with better rewards involves the following key ingredients:

The right rewards

The right reward values

Immediate delivery creates connection

Enable daily shopping

Increase earning opportunities with Gift Cards

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