One of Savvy Marketing’s clients is creating a rewards program to increase customer engagement across their product portfolio. They are starting from a blank slate and need to determine branding, digital assets, market fit, pricing/rewards as well as a communications calendar. As part of the project, I evaluated the benefits of multiple rewards programs and came up with the following framework.
The best rewards programs include the following:
- Obvious value proposition with tangible benefits such as significant discounts and rebates or ability to earn points redeemable for services and products
- Intuitive and straightforward user experience at acquisition and activation
- Intangible, often unpublished benefits that can include preferential access to services
- Frequent communication reinforcing the value proposition
First a quick history lesson. Do you know who launched one of the first rewards programs? Betty Crocker, which started one of the first rewards program in 1930s along with a few grocery stores. Betty Crocker’s target customers (housewives managing a budget) could earn rewards points and exchange them for household items at substantial savings. General Mills closed the program in 2006 to focus on a new program: BoxTops for Education, which earned $74m for schools in 2012.
- Loyalty Card costs $25, customers sign up online or at stores
- Free one- to three-day shipping; discount of 20% percent on hardcover books (40% percent on best sellers)
- Additional perk of 10% at Starbucks cafes in B&N stores
- Discounts are applied at the time of purchase
- Customers earn points based on spending
- Points are redeemable for travel at participating airlines, products part of Shop Amex or for gift certificates to restaurants and events
- Point balances are included on monthly statements
- Customers can accrue as many points as they want before redeeming
- Membership to Prime is free the first year $79 the second year
- Prime Members enjoy free two-day shipping
- Free movies and TV
- Instant access to Kindle titles
- Prime members see “eligible for Prime” as a delivery option at check out
- Family Membership is $175
- Members receive 20% off retail prices
- Members have access to “viewing hours” before the museum opens, Little Member Mornings and Mother’s Day at the Museum
- New benefits include access to the Digital Lounge an online community for members only