Q

Expand loyalty programs to reward social activity

Plan to reward customers for social network activity and consider “lifestyle” rewards instead of just discounts -- a cooking lesson, maybe?

We think we should be doing more with customer loyalty programs. What are some good ideas to get started?

Most loyalty programs employ a traditional "give and get" to reward consumers -- a certain number of transactions or the overall spend leads to some sort of discount, rebate or special offer. But this structure creates a discount addiction rather than developing brand intimacy. Some companies are trying the following approaches to improve their loyalty programs, and you might want to consider one or more of these ideas:

Give customers rewards for their social channel activities. Increasingly, loyalty programs turn to social channels to increase brand awareness. Organizations reward members with extra points or discounts to "like" them on Facebook, follow them on Twitter and make product or service recommendations to friends and followers. Companies such as Social Rewards create social-specific loyalty platforms to reward existing loyalty program members with points for tweeting, sharing and liking special deals.

Encourage customers to interact with your brand outside of your own website or “purchase experience.’’ You can offer incentives for activities such as check-ins on Facebook or Foursquare. For example, California-based airline Virgin America offers customers 25 Elevate points per check-in to Facebook Places or Foursquare at its airport terminals or baggage claims.

Stop depending on the discount rewards and think more about lifestyle rewards. More programs are introducing experiential rewards and downplaying discount-driven rewards. Consider event-based or lifestyle offers such as front-row tickets to a concert, cooking lessons or shopping consultations with a stylist. These experiential rewards work because they carry a higher perceived value as they focus on member aspirations. Hilton recently rebranded its loyalty program with this in mind. Members still earn points and miles -- but the marketing stresses a softer message of turning points into "experiences worth sharing" with family and friends.

This was first published in September 2011

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