Loyalty programs can have a major impact on customer engagement and, ultimately, brand advocacy.

But, most people don’t realize how it can impact the rest of the customer journey.

Loyalty360 will host a webinar on Tuesday, Dec. 13, 2016, presented by Deluxe Rewards, titled, “How Loyalty Programs Influence the Customer Journey.”

The featured webinar speakers are Lynn Grubb, General Manager, Deluxe Rewards; and Adam Craig, Vice President of Product Management, Deluxe Rewards.

Loyalty360 caught up with Craig to learn more about this intriguing topic.

How can a successful loyalty program impact the customer journey?

Craig: A successful loyalty program can be used to support the customer journey by inserting the earning of rewards at key points in the journey that influence or reward behavior and engagement. In this way, the loyalty program helps support the key interactions with the customer, and helps create a loyal and engaged fan base at the same time. 

As an example, if a key touch point is to have a customer watch a video about a product or service to inform a purchase decision, then a successful integration for a loyalty program may be to reward the customer for watching the video, taking a quiz on it or answering a survey about the video. The customer is incented to take action, and gets rewarded for doing so. Studies show that small, meaningful rewards early and often in a customer journey can be powerful motivators and have a lasting impact on customer satisfaction and retention.

Are there certain elements a loyalty program needs to have to impact the customer journey?

Craig: First and foremost, there needs to be a well-defined customer journey, with key touch points and goals established. You’d be surprised how often this step gets missed. It’s important for the design of the loyalty program to support the goals with rewards and tactics that are well-matched to the objectives. This requires a reward mix varied enough to support the key interactions, tiered rewards that map to the level of engagement or interaction, and the ability to track and measure that the rewards are having the impact they were intended to drive. 

Finally, as the old adage states, “you can’t manage what you don’t measure.” There needs to be a willingness to adjust tactics early and often based on the measurements. Small changes can be implemented more quickly and are easier to manage with less impact, than waiting until the impact is large. We’ve seen many examples of programs that haven’t fared so well in this area in the last year alone. 

How can a loyalty program drive customer acquisition and influence customer retention?

Craig: When we think about acquisition, we’re typically looking at promotional activities such as social media marketing, email marketing, SEO, mobile marketing and other forms of media and offline advertising. A loyalty program can help influence these activities by rewarding customers for activities such as social media interactions, customer referrals, and email address acquisition. The nice thing here is that for these types of interactions, even small awards can have a meaningful impact on acquisition. Customer satisfaction and retention go hand-in-hand. 

And the good news is that both can be influenced by loyalty programs. Rewarding loyalty with ‘surprise & delight’ rewards, providing access to experiential rewards and special deals, and demonstrating ongoing benefits for loyalty and tenure can be very effective.

What are marketers doing well in this area and where do the challenges lie?

Craig: Marketers are becoming more sophisticated in their understanding of how to leverage loyalty programs to acquire new customers and improve retention, and organizations are becoming more adept at handling the data required to be successful. The biggest challenge comes from the macro trends taking place in the loyalty and rewards space. Program membership continues to grow as organizations race to put programs in place.

It’s table stakes at this point to have a program in place. The problem is that all the distraction vying for customer attention, a more educated consumer who understands the power they yield with their business and purchasing power, and too many “me-too” programs are driving lower engagement despite the growth in total number of consumers participating. This is why it’s so important to think about program design – what are the company’s goals, what are the consumer’s goals and expectations, and how can a program be created that brings these two things into alignment? Companies that can do this successfully are the ones that are winning with consumers. 

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