5 Tactics to Avoid Loyalty Program Members from Sitting on Their Points




  • by Clare Nemeth June 28, 2016
    June 28, 2016

    Have you ever had tons of points on your loyalty card, but no idea how to spend them?


    You collected all those precious points, but for what?


    The broken promise of being rewarded can shortly result in disappointment. That’s definitely something you want to avoid in your online store.


    Although rewards cost money for your business, your loyalty program’s success depends on how actively people spend their hard-earned points on them.


    Moreover, rewarding your customers for being active in your webstore is one of the drivers that make them stay with you. So why should they keep collecting points if they cannot see any return for their efforts?


    Let’s see what you can do to awaken the sense of achievement in your customers, while making them spend their points.


    If you use a loyalty software like Antavo, many of these features may already be built-in. But if you are building a rewards program from scratch, make sure to pay attention!


    1. Make point redemption clear


    The most basic thing to take care of when creating a loyalty program is to make it as simple to understand as possible. This principle applies to point redemption, too. If you can’t explain how can your customers redeem their points in just one sentence, then you need to reconsider the mechanism. For example “Get a discount on your purchase by redeeming your loyalty points for a coupon in your Cart, right before checking out.”


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    Creating an explainer page for your loyalty program can clear the fog entirely and show people how they can redeem their points.


    2. Boost your loyalty program with special features


    In a digital loyalty program, you can introduce smart, but very easy techniques that can incentivize your customers to turn their points into real value. Here are the most effective two ways to do so:



    • Point expiration
      At first glance, taking points away from customers might seem cruel, but on second thought you’ll find it very useful. If you set a specific timeframe for customers to redeem their points, you can keep people from accumulating points without spending them. When the expiration date is getting closer, they’ll feel the urge to act. Who would want to throw a discount out the window?
    • Double points events
      The primary goal of creating a campaign that lets customers collect twice as many points as usual for their purchases is to incentivize purchases and create buzz around your brand. But it can also help you reduce the number of unspent points! For customers who are eager to get a reward of higher value (i.e. a ticket for an exclusive event or a personal consultation with a stylist), but need additional points to get it, it’s a great chance to collect the missing points and help them burn those points on the desired reward.

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    Liberty London is having a 5-day-long double points event this summer. This is just the right amount of time for a customer to find the right products and buy them.


    3. Remind your customers about spendable points inside your store


    Sometimes your customers just forget about their points and the possibility to redeem them for precious rewards. This is why you need to make sure that your customer can easily find info about their current point balance. There are many ways to notify them, including:



    • On the main page
      The easiest way is to feature the point balance next to the customer’s name or the username appearing on the main page of your webshop. You can even add a short call to action button leading to the explainer page as well.
    • On the checkout page
      Discounts, the most favored loyalty rewards, are most relevant on the checkout page, where your customers can put them to use. If they can see their number of points and the amount of discount they worth here, they’ll be eager to spend them right away, to save on their purchase.
    • In a pop-up message
      When customers are about to leave your store, you can incentivize them to stay and buy products cheaper, by letting them know that they have loyalty points to spend on an instant discount.

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    If points can be turned to discount coupons instantly on the checkout page, then point redemption won’t break the checkout flow.


    4. Remind your customers about spendable points outside your store


    Even if your customers haven’t visited your store for a while, you can still notify them that they have points to spend. This way you can not only encourage your customers to redeem their loyalty points, but also pull them back to your webstore at the same time.



    • Notification emails
      Have you ever found something that you didn’t even remember you had? I have and it was a fantastic feeling! By sending a reminder email about long-forgotten points, you can create the very same cheerful feeling for your customer.
    • Facebook remarketing
      Antavo Loyalty Software lets you export customer data based on any criteria, like customers with over a certain amount of spendable points. Then you just need to import that to Facebook’s Ads Manager to get your remarketing campaign up and running. This is a less personal way of letting your customers know about their points, but on the other hand, it’s a great way to notify customers who don’t check their inboxes, but are rather active on Facebook. Showing some amazing rewards on your ad, which they can redeem their points for, can be a nice incentive to get them back to the loyalty program.

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    Need an example of how you can remind customers to spend their loyalty points? At Antavo, we typically recommend sending these kinds of emails to users who have been inactive for a certain timeframe, e.g. 30 days or more. This number is influenced by how easily customers can collect points and how many rewards are available in your loyalty program.


    5. Run contests


    Running contests is a proven way to drive more sales and engage customers with your brand. For example, at Antavo, we let you build them into your loyalty program as redeemable rewards, in order to help reduce the amount of unspent points. We do this for two reasons:



    • A contest is a cost-effective way to get customers to spend their points continuously
      They are the perfect fit if you want to optimize the costs of high point-spending, because customers are redeeming points for the chance to win a prize – not immediately for the prize itself.
      Even if a huge number of customers redeem points for the chance to win, you won’t end up spending a lot of money on rewards. On the contrary! The more customers that redeem to participate, the more points they spend, even if “buying a lottery ticket” doesn’t cost that many points. As the number of entries rises, your cost per 1 spent point reduces.
      You can even let members increase their chances to win by letting them enter the contest multiple times.
    • Customers can spend their points right after their first purchase
      The sooner your customers experience the satisfaction of receiving something from the loyalty program, the easier it is for you to encourage the habit for them to repeat redemption regularly.

    In order to do so, you need to introduce rewards that can be redeemed by taking just a few actions in your store. Contests are the perfect example of this type of reward, as the point-price of entry is low.


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    To maximize the spending effect, let your customers enter contests multiple times – it’s a great way for members to increase their chances to win.


    What should be your next step?


    Check your point breakage after three months of running your loyalty program. This is the typical timeframe that lets you get measurable results, which helps you to fine-tune your loyalty program’s performance.


    Also, point breakage, the percentage of unredeemed points, is one of the most important KPIs of a loyalty program. Calculating breakage is quite easy:


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    If this ratio falls above 30%, you need to take immediate action. Re-read this guide and introduce more of the tactics above into your strategy like using contests, introducing point expiration or sending out reminder emails).


    How did you like this guide? What other loyalty program tactics would you like to learn more about? Let us know in the comments section below, and we may just write our next guide about it!

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