Instant Rewards: The Special Recipe for Increasing Customer Loyalty

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Instant rewards might sound a little impulsive. Maybe even reckless, especially with new customers who haven’t proven their loyalty to your brand just yet. 

But…new research says otherwise. Here is what we know happens when designing your loyalty program:

54% of UK consumers believe it “takes too long to earn rewards with loyalty schemes.”

The research also found that 27% of people stop using reward programs because of how long it takes them to get any benefits.

(MYCUSTOMER)

When picking the sub-loyalty programs to work with, or at least test, you might find yourself overwhelmed with the number of options that look promising but may require some work on your end.

Some programs even incorporate multiple loyalty elements that might feel confusing at first for a customer to understand and use. They may even be confusing for you to use as a merchant or marketing manager.

This begs the question:

Which strategies should you use to avoid confusing customers and bombarding them with too much information?

In this article, we’re focusing on what an instant reward is, what the rewarding process can be and should be like, and how to use instant rewards to increase customer loyalty in your e-commerce store.

How instant rewards work

How Instant Rewards Work

Before you think about giving out instant rewards to your customers, let’s show you how they work. And why they can be a great tool to increase customer loyalty.

Let’s use a referral program as an example. There are two parties involved in the referral process to start with. The referrer and the referred or the friend.

When you design a referral program, you need to think about a few things. These are:

  • the referrer’s journey
  • the referred’s journey
  • how you’ll guide each of the referrer and the referred (the friend) in each of their journeys
  • the reward they will receive (if the referral is successful)

The rewarding journey requires you to inform the customer that they have earned a reward, choose a convenient type of reward, and most importantly, decide on how they would benefit from this reward.

You don’t want to complicate the rewarding process, though. Otherwise, customers might end up losing interest midway or even early on in the rewards program.

Let’s imagine the following scenario: 

  • A customer makes an achievement
  • They receive a notification informing them of their achievement and an earned reward.

Here is an example of a rewarding experience that could seem a bit too much in some cases:

  • To unlock the reward, your customer first has to do another action like rate a product or leave a review on your website.
  • Then, they receive points.
  • Your customer learns that these points are of great value…because they actually have a monetary value.
  • They have to exchange (redeem) these points with what they’re worth in their currency.
  • Lastly, they need to remember to apply the amount they’ve exchanged at checkout when completing an order.

This was even too long for you to read, right?

Now Imagine having to make all these small decisions for this experience – and other experiences – in your program. Imagine having to explain the whole journey to the customer step-by-step.

Don’t worry! There are now multiple you can simplify this. Here is another rewarding experience: When a customer completes an action of any kind or even a sequence of actions.

  • They receive a notification about their accomplishment along with a ready-to-use coupon gift, which they can apply at checkout (via a link in that same notification). 

That’s it!

From the customer’s perspective, there’s nothing complicated to comprehend there. And for you, it’s a lot less planning and implementing.

This loyalty methodology is called Instant rewarding. And it’s a great way to build and increase customer retention.

Instant rewarding does not only provide the final form of a reward to be used right away. It also provides the fastest and most reliable way to use this reward.

According to InsiderIntelligence.com, these are the main reasons why consumers have started using loyalty programs more frequently:

Reasons-Why-Consumers-Use-Loyalty-Programs-More-Often

“Amid inflating prices and deflating brand loyalty, programs that unlock deals and discounts are key for brands to retain customers. Around the world, 56% of consumers said they’re more likely to buy from a brand with a loyalty program, but 64% of loyalty program members don’t redeem rewards more than a few times a year. Consumers are looking not just for personalized perks, but for perks that don’t make them jump through hoops.”

Insider Intelligence

This brings us to the next question: How can I apply instant rewards to my loyalty program?

5 instant reward ideas to build customer loyalty

1- Give an instant reward upon account creation

Imagine visiting a website for the first time. Then you see a pop-up notification telling you about the store’s loyalty program and encouraging you to register to win a $15 coupon to use on your first purchase. What will your next action be? 

Once you sign up, you receive a notification with the earned coupon, ready for you to use at checkout. Will you consider making a purchase right away? Or would you disregard it and move on?

When a guest signs up, they’re still discovering your platform as well as your loyalty experience. Giving them a welcome reward leaves a positive first impression. Plus, it’s a great way to get customers to complete first orders and increase acquisition and sales.

2- Send a campaign with a discount coupon to a specific customer segment on special occasions

Sending personalized campaign to a segment

Customer segmentation is an excellent way to group customers based on shared attributes and reward them. It’s also a great tool to build loyalty and offer a personalized customer experience.

“Personalized email marketing is proven to increase open rates and drive revenue by as much as 760% because it helps marketers give subscribers more relevant, individualized content.”

(business.com)

Let’s take Mother’s Day as an example. Sending all your female customers or mothers (if you have segmented your customers accordingly) an email with a 25% discount coupon they can use right away is always a nice gesture.

Nothing is sweeter than celebrating a particular day or occasion with a customer. It helps you build a customer-brand bond.

3- Free shipping on second order

Customer acquisition is always a challenging part of marketing, including your loyalty marketing strategy. Usually, e-commerce businesses measure acquisition when a customer makes their first purchase.

Once this is done, the next challenge becomes retaining that customer. Customer retention is often measured by looking at your average repeat purchases.

That’s why rewarding customers after their first purchase with a gift such as free shipping can encourage them to come back and buy another product.

Here is what it would look like for a customer browsing your e-commerce store:

“Finished your first order? Great! Here is a Free shipping coupon to use on your next order.”

This instant reward acts as an incentive for customers to come back.

4- Celebrate customers’ birthdays with an immediate coupon gift

Building a personalized experience and rewarding customers based on segments changes the game. Addressing your customers for who they are, leaves a huge impact and builds the customer loyalty you want.

Whether or not the customer is going to use the coupon gift, celebrating a customer’s birthday delivers the message that they are seen by your brand.

Here is how you can celebrate their birthday in one step:

Create an automated email that gets sent to each customer on their birthday with celebrative gestures like “Happy birthday,” and gift them with a ready-to-use $10 fixed amount coupon that they can apply and use just by clicking on a CTA.

Many of the world’s best beauty loyalty programs like The Body Shop, Ulta, and Sephora do this.

P.S: you can do the same thing with anniversaries. Celebrate the one-year anniversary of your customer joining your loyalty program or celebrate completing two years of operation and invite your customer to participate in your success.

To reward customers on special days or events, use their registration date while configuring the automated email.

5- Surprise your customers with instant rewards for their actions on your platform

Who doesn’t like a surprise coupon gift while randomly browsing an online store?

When customers learn they’re being rewarded for something they have done, they’ll get an extra special flavor with your brand that will put a smile on their faces and make them more inclined to shop at your store than a competitor’s.

More instant reward ideas for customer actions in your online store

  • Free shipping for adding a certain number of products to their cart
  • 5% Percentage-based discount for leaving a review
  • Free product for logging in 10 days in a row
  • Percentage-based discount for social media engagement

To keep the element of surprise, the ideal way to communicate these types of rewards is through a popup notification that congratulates the customer and briefly explains why they’re being rewarded along with the actual coupon reward.  

This raises a final question: How am I going to communicate with my customers these instant rewards to ensure they’re successfully used?

There is one way to communicate with your guest (visitor) and two ways to communicate with your customers.

1- Communicate with your guests and customers via In-app Notifications

In-app messages and notifications could have different forms, such as small or big popups, toasties, banners, and so on. 

Small popup notification of an instant reward
Small popup notification of an instant reward.

They’ve proven effective when it comes to informing customers of a reward they earned or simply to share a piece of news or an update with them.

Pros:

  • High open rate as they are visible (they could be at the front and center or at the bottom)
  • Used on all types of retail customers, including your visitors/guests, as you don’t need a lot of info to send them. For example, you don’t need their email address to notify or message them.
  • High conversion rate for there is no need to go from one page or tab to another.

Cons:

  • Customers can’t retrieve the notification back if they’ve dismissed it.
  • Has to be short (including your Call To Action)
  • Too many of them might be visually annoying

2- Send Email Notifications

Email notifications are often used in email marketing strategies. Emails are a widely-used tool to inform and reward customers for accomplishments of any kind.

Instant Reward through an email notification

Pros:

  • Creating Campaigns 
  • More personalizing options
  • More content space for your to give information

Cons:

  • You need to acquire your customers’ email addresses first.
  • Requires your customer to check their email feed (lower open rate)
  • Hopping from one browser/app to your platform requires a really good call-to-action (CTA)

Conclusion

There are countless ideas to reward your customers without them having to go through a long maze-like process before they actually benefit from you and get a reward. 

In this article, we’ve only presented some ideas and tools which can help you create and offer instant rewards to customers. Knowing this, you can create your customer engagement strategy and offer a beneficial and fun, rewarding experience.

If you still need help applying these ideas and setting up your successful customer loyalty and rewards program, then add Gameball to your online store. If you’re on Shopify, just add Gameball from the Shopify app store.

Got questions about instant rewards or loyalty programs in general, email us at support@gameball.co.

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