Figuring out the right loyalty program benefits mix is critical to acquiring and retaining loyal customers.
Customers have unique needs. They’re constantly evaluating you against your competition. Your loyalty program can’t be a one-size fits all solution with the same benefits for everyone.
Building the right benefits mix is crucial. It takes getting to know your audience, self-reflection, and an understanding of what your competitors are providing.
But have no fear! You can find the answers with a market assessment, which can be done in the following three steps.
1. Understand the Needs and Values of Your Target Customers
There are a couple of great ways to do this through a combination of qualitative and quantitative research.
To start, you really need to put yourself in the shoes of your target customer. Ask yourself about their habits and preferences. What would make engaging with your brand convenient?
Let’s imagine your target is a busy millennial mom (we’ll call her Taylor). You will find there are many existing studies that summarize who she is and what she cares about.
You’ll find that most moms under the age of thirty-five keep their smartphones within arms’ length at all times. This includes while shopping.
Therefore, we know that Taylor would most likely want a seamless mobile shopping experience. A loyalty program that would allow her to keep her loyalty card on her phone would probably be ideal.
It’s relatively easy to find reports and statistics online that give you insights about your audience. While it’s a great place to start for a high-level view of your target customer, it’s important to dig deeper.
Layering in qualitative interviews with your actual consumers will give you a much more complete picture of their world. It will help you uncover how your brand fits into it. Ask them what benefits are important to them.
This can be in the form of a simple survey of your current customers. Understand what they’re looking for in a loyalty program, straight from them.
2. Assess Your Status Against Your Findings
Now you understand your consumer wants and needs. It’s time to map out those attributes against your own offerings and goals.
The objective of this exercise is to identify gaps that might be filled through a loyalty program. You may have found that Taylor values things like a mobile app as mentioned before. Immediate gratification and convenience jump out.
If these things happen to overlap with your goal of driving more mobile transactions, then this rises to the top of the program requirements.
On the other hand, if Taylor really values benefits that are beyond your current capabilities, work with your IT team, vendors, etc. to learn how to do these things better and give your customers what they want.
This exercise is about forming your roadmap.
Once it’s developed, it’s time to shift your focus outward and look at what your competitors are doing.
3. Assess the Competitive Landscape
You must understand the alternative options Taylor has to fill her needs. Who are your competitors and what are they offering?
This knowledge will help you craft a benefit mix that fulfills customer needs and reinforces your brand value. That sets you apart from your competition.
Understanding the benefits of competing loyalty programs is necessary to differentiate yours. After all, simply doing the same or incrementally better isn’t going to win Taylor’s loyalty.
Let’s say our previous research told us that Taylor’s persona values natural, organic products.
If you’re a beauty retailer, you could consider looking at Sephora to understand what their loyalty program offers. Taylor will probably expect experiential benefits since that’s what is out there currently.
Since Sephora focused more beauty education and inspiration, therein lies an opportunity to be different based on what Taylor values. Your competitor’s program might offer a sample of a brand new product line and instruction. Your program could offer a natural aromatherapy sample and a complimentary wellness class.
Understand what competitors are doing and how that may or may not appeal to your audience. You can find opportunities to be different and make emotional connections with your customers.
Building a successful loyalty program benefits mix really comes to this: Know your customer, know yourself, and know your competition.
No matter what specific benefits mix you land on, you can’t stop this process once you launch your loyalty program.
It’s a true cycle, and your program needs to be continually assessed using the same steps as above.
Use the data that you collect from your members. Understand what they need and want at any given time. Create a personalized experience that offers value and ease of use to them.
Keep on checking your own capabilities to make sure they’re up to par. What if you find that your customers want more than you currently are capable of? Work with your internal teams and external vendors. Keep learning and improving your program.
Lastly, make sure you keep a constant watch on what else is out there in the market place. Your customers are constantly evaluating you against your competition. Offer not only great tangible value, but experiential benefits your customers won’t be able find anywhere else.