A key element for loyalty programs, especially in industries like retail and restaurants, is product purchase frequency. Frequently purchased products enable members to earn more reward currency and keep the product and the program top of mind.
Does that mean that products without a high rate of purchase frequency can't implement a successful loyalty program?
They actually can, it just requires a little creative thinking and a different approach.
Don't make it about the purchase
The auto industry is perpetually challenged with solving the riddle of how to maximize engagement among consumers for a product that is purchased every three to five years. The typical answer to the traditional strategies of creating loyalty is by offering bonus incentives such as:
We value you as a loyal owner, so now we want to reward you for it too. With our Bonus Offer, get $2,000 towards the purchase of a new 2014 model.
Sustaining consistent engagement among consumers is about creating a stronger relationship so a brand doesn't have to win on discount. In essence, this is all about adding brand value.
So how does a brand solve the purchase frequency dilemma? Simple: don't make it about the purchase. Instead, make it about activities that occur outside the purchase.
The Jeep brand’s 'Cherokee Effect' program rewards consumers for a variety of behaviors.
- Engagement: Program registration, following on Twitter, entering Effect Codes found in emails, on jeep.com and social media sites, and taking the monthly Snap The Act Challenge are all elements - outside of the direct sales - that help the program build awareness of the all-new Jeep Cherokee and create sustained engagement.
- Education: Watching Jeep brand videos, taking a test-drive, taking a poll.
- Advocacy: Sharing on Twitter, emailing friends, and participating in 'The Cherokee Effect' rewards program.
The Cherokee Effect program enables ongoing, incented engagement with the Jeep brand and motivates behaviors that create engagement and, ultimately, drive future purchases.
Break traditional rules
If you're a business traveler, the odds are you have enough travel frequency to benefit from most travel rewards programs. However, for many leisure travelers, racking up 25,000 miles for a roundtrip ticket is a multi-year initiative.
This can have a major impact on the viability of travel rewards programs. In fact, when consumers leave a loyalty or rewards program, 70% cite the reason as 'the length of time it takes to build up points to earn a reward' (Maritz).
Orbitz solves this problem and creates differentiation in the cluttered travel loyalty space by breaking the rules. Orbitz Rewards has the tagline of 'Instant Vacation Gratification'.
Members can redeem their reward currency instantly, so no hurdles, no waiting forever to redeem, and no blackout dates. Even with only a few dollars in Orbucks, members can spend them immediately on travel expenses.
Sure, this somewhat violates the loyalty strategy of setting threshold goals to create stickiness and have members stretch their purchase activity over time. However, if those goals are unattainable, they might as well not exist.
Make it about exclusivity
Everyone has an uncle to whom this next statement does not apply (especially over the holidays), but the average consumer is challenged to consume enough alcohol on a frequent enough basis to create an effective loyalty program.
Even for those who may purchase hard liquor more frequently, Alcohol Beverage Control laws make it difficult for spirit manufacturers to effectively incent purchase. Even if the ABC laws were more loyalty friendly, the solution lies in creating a program around exclusivity to build a brand relationship.
Maker's Mark created an interesting loyalty program built around exclusivity. Consumers do not register or enroll for the program; instead, they fill out an Official Application. Instead of being referred to as a member of the program – they're an "Ambassador."
Ambassadors receive a certificate sealed in the brand's iconic red wax, along with 20 business cards with the title of Ambassador of the brand. Members get their name on an actual barrel of Maker's Mark, with live updates on the aging of their barrel.
Plus, they can purchase two bottles of Maker's Mark from their own batch. Ambassadors are invited to come to the distillery in Loretto, Kentucky, to purchase their bottles and dip them in the brand's signature red wax. Creating the perception of exclusivity by allowing a member to buy more of your product? Genius.
The brand also offers invitation-only events, the opportunity to purchase rare, special release bottles and Ambassadors-only Maker's Mark merchandise such as glasses, special ice trays and DVDs. The program is so exclusive, Maker's Mark doesn't even advertise it. Truly loyal consumers will find it on their own or they can be invited by other Ambassadors. The entire program of exclusivity creates a closer brand relationship and deeply passionate advocates.
Driving quality engagement leads to loyalty
Ultimately creating customer loyalty is not about the purchase, but instead it’s about driving consistent engagement with your brand.
This type of loyalty can be encouraged by creating a compelling experience surrounding the purchase, including elements like education, the ability to engage and share with friends, and cultivating broader discussion among community members.