Among the various challenges a brand faces, while implementing loyalty strategies, the major cause of concern is a low participation rate. A brand invests valuable resources and time to design a suitable program for its audience while incurring implementation costs but fails to reap its benefits due to low participation and engagement.
In this article, we explore strategies and ideas to tackle low participation and engagement rate and help you to propel your loyalty program in the right direction.
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Why Is It Important?
The Pareto Principle shows that 80% of a company’s profit comes from 20% of its customers. Retaining customers can prove highly profitable, however, retaining customers requires effective engagement strategies.
A loyalty program is a great means of improving customer engagement. By enrolling in a loyalty program, customers are incentivized or rewarded for their purchases which ensures high engagement rates. Consistent engagement greatly strengthens the customer-brand relationship and turns repeat customers into brand evangelists and advocates.
Understanding The Difference Between Registrations and Participation
Joining a loyalty program and actively participating in one are two different things. A recent report on brand loyalty states that “The average consumer belongs to 13.4 loyalty programs, but is only active in 6.7.” Enrollments mean nothing if customers are not active. It defeats the purpose of a loyalty program that aims to engage audiences for years to come.
Customer behavior is not completely unpredictable, if your enrollment rate is higher than the participation rate then you need to reevaluate your strategies and your program. Let’s explore how you can increase participation as well as engagement rate to leverage the true power of loyalty and rewards programs.
Strategies To Improve Participation Rate
- Promote Your Program – In order to increase the participation rate, you need to spread awareness about your loyalty program. Promote your program on channels that are frequently used by your target group. When it comes to promotions consistency is key. Routinely inform your existing customers about your program updates and make promotions part of your marketing plan.
- Provide a Walkthrough – In a survey conducted by Colloquy Loyalty, 81% of the customers said that it is important for them to thoroughly understand a loyalty program before they commit to it. If the customers are unaware of how the program works, it affects the participation rate. It is important that you provide a walkthrough and explain the program in detail to your customers to encourage participation. Only when the customers understand the program can they truly reap its benefits.
- Offer Meaningful Rewards – Rewards are the most important part of a loyalty program and most companies understand this. However, not every brand offer rewards that are meaningful and add value to the customer’s life. Souvenirs and memorabilia are things of the past. Offer rewards that excite customers and motivate them to participate in the program and bring true joy and value to their lives.
- Make Data Your Bible – Before you adopt loyalty strategies you need to question yourself, ‘Why is it necessary?’ The answer lies in your data. Customer data that you have accumulated through various channels can help you to understand what your customers want and what is influencing the attrition rate. Considering such vital information, design a loyalty program that suits your customer’s taste and preferences which will automatically improve the participation rate.
- Incentivize Subscriptions and Participations – Perhaps the easiest way to ensure participation is by offering welcome rewards. You can reward or incentivize your customers for joining the loyalty program. This will not only give them a good head start but also encourage them to promote the program to their network of friends and family.
- Encourage Referrals – Incentivizing referrals is a great way to not just increase participation but also engagement rate. Referral strategies have a universal appeal and offer great ROI. When you encourage customers to refer their friends by offering them incentives or rewards it significantly improves customer acquisition rates.
- Make Earning/ Winning Easy – Offering tangible goals that not only improve participation but also customer engagement is important. If the loyalty milestones are tangible the customers are motivated to participate in the program and winning rewards further boosts their enthusiasm.
Strategies To Improve Engagement and Retention Rate
- Make It Accessible – In today’s day and age, when omnichannel is the norm, customers do not want to be restricted when it comes to accessing their loyalty dashboard. Create multichannel programs that can be accessed through desktops and mobiles. Convivence is the key to improving engagement rates.
- Set Reminders – Automate emails and notifications to remind customers of your loyalty program. If a customer hasn’t participated actively in the program since their registration, offer them a small reward to encourage participation. Reminders have a high efficiency rate and improve your brand and loyalty program’s recall value.
- Offer Personalization – Personalization has a direct impact on customer satisfaction and engagement rate. Telecommunication brands understand this fact and ace at this game. Personalized programs offer convenience and a tangible goal that improves customer participation rate.
- Simplicity – The simplicity of the loyalty and rewards programs plays an important role in participation and engagement rate. The simpler the program, the more customers are inclined to participate. This is why it is also extremely important that your customers are aware of how the program works, what are the important ground rules of your program and such other details.
- Acknowledge and Appreciate Your High-Value Customers – Your high-value customers are your asset. Recognizing them and showing appreciation to them can go a long way in building brand loyalty. Design special tiers or levels for high-value customers that can offer them special rewards that make them feel exclusive and special. It can also inspire other customers to improve their association with your brand.
- Keep Up With New Trends – Just like all other marketing techniques and strategies, the loyalty landscape too keeps evolving. To appease the taste of the audiences, it is necessary to keep up with the changing times and trends. Off late, features like gamification, AI are taking the loyalty industry by storm. Even omnichannel loyalty is gaining a strong fan base. Therefore, updating your technology and introducing new and engaging elements keep the customers excited and engaged.
- Build An Emotional Connection – Lastly, always strive to create an emotional bond with your customers. Loyalty and reward programs can help you acquire and retain customers to a great extent but developing an emotional connection can help inculcate loyalty towards the brand.
To learn more about designing a strong loyalty program that drives engagement and boosts brand loyalty, read our detailed white paper and for customized solutions and dynamic loyalty strategies connect with Annex Cloud.