A good customer loyalty program must be versatile. The traditional concept of rewards programs that are based on points for purchase has expanded to include a much larger marketing strategy. Now, programs may incorporate rewards for social media actions, promotional participation, and site engagement. Social media in particular has become a major source of consumer information within the last few years, with a majority of individuals using public figures and social media influencers as potentially reliable sources.
Modern consumers love the concept of benefits and free goods even more than their pre-recession counterparts. Combining the concept of free giveaways and social action had become a powerful promotion technique to the pre-recession consumer base, but it has had an even larger effect on the post-recession market. For instance, when Oprah Winfrey participated in a Pontiac giveaway in 2004, Pontiac saw 140,000 visitors and a 600% increase in daily traffic. Now, the combination of social media actions and contests is more important than ever for generating customer loyalty. Here are some of the reasons that modern consumers require rewards, plus tips for generating a social media contest that will generate loyalty in today’s customers:
The 2007 to 2010 recession has created consumers who are more frugal and who are constantly on the lookout for savings. Furthermore, because modern consumers are more aware of their options for shopping than previous generations, both online and in stores, they expect to get as much as they give. This means that consumers are actively seeking brands with good loyalty programs and may choose brands that offer rewards for loyalty or purchases over brands that do not have a rewards program.
Modern consumers love competitive brands for several reasons. First, brands that are constantly offering something new are interesting. Moreover, social media contests allow consumers to demonstrate their accomplishments in front of their peers. The modern consumer is heavily involved in social media and a contest that involves social media can be appealing. The average consumer has a relatively short attention span and is more likely to engage with brands that offer interesting rewards. By adding the social media aspect to contests, companies can provide a sustainable interest base for potential competitors.
The potential rewards should be worth a consumer effort. For instance, for an artistic contest where consumers are putting in a lot of effort, the prize should be something that is enticing to the modern consumer and worth the work that is involved in the contest. A lucrative prize can involve a larger giveaway or a significant number of points that can be utilized toward consumer favorites.
One of the major pitfalls of some competitions is the lack of worth in the prize. While this may attract a less competitive demographic, it may also undervalue the price for higher-end consumers. That being said, the best social media contest rewards do not always involve a monetary value. For instance, while many marketing experts recommend that your average price be valued at no less than 2.5x your average order value, there is also a potential for sponsoring donation of community-based events that can ultimately serve to both draw a wider competition base and improve company image.
Recent studies have demonstrated that general giveaways, contests and reward programs may fall short in reaching the consumer base. Instead, there is a new importance that has been allocated to brand stories, goals and community involvement. While sponsoring a social media contest for general prizes is still a great way to increase consumer interest, contests that involve some sort of social change, charity or community benefit are much more likely to generate consumer engagement.
The growing popularity of social media has created a new promotional market. The new market can be used to promote your brand, generate new members, or increase interest in your product by sponsoring contests on social media. While creating worthy rewards for the consumer is key to consumer engagement, creating a return on investment is key to making a rewards program beneficial for your company. Make sure that any given contest or rewards program is creating an adequate return on investment through analysis of results. The outcome analysis of a given contest should include losses, consumer gains, and potential consumer gains through brand promotion.
At Annex Cloud, we are committed to not only creating the customer loyalty programs for your brand, but also to offering a thorough analysis of the benefits of new programs that include social media promotions and contests. Get in touch to see how we can help make your company stand out to the modern consumer.