Go Beyond Cash and Points

Learning Objectives

After completing this unit, you’ll be able to:

• Describe the history of loyalty programs.
• Recognize the value of experiences over traditional transaction-based rewards.
• Design experiential benefits that engage members.
• Explain how Loyalty Management can help build an experiential loyalty program.

A Brief History

The world of loyalty programs dates back to the 18th century. To build loyalty and reward customers, American retailers gave them copper coins for their purchases, which could be redeemed for future products. To cut costs, tokens and stamps replaced copper coins. Over time, this evolved into coupons and cards. With the rise of ecommerce, loyalty programs have taken a sophisticated turn. With an aim to create an emotional connection with loyal customers, businesses are offering innovative rewards like early access to products and free samples.

In today’s competitive market, businesses are using all consumer touchpoints, data, and insights to understand customer preferences. Loyalty programs used to be about earn and burn, but now they use new currencies, in the form of experiences, to surprise and delight customers. 

An Experience to Remember

If you’re enrolled in a loyalty program, at some point you likely received a discount voucher. Let’s say the loyalty program you’re enrolled in offers you a 25% discount on a jacket that’s on your wishlist. You’re happy to buy the jacket and tell your friends and family about it. A few months later, three family members enroll in the program thanks to you. To reward the referrals, the program gives you a ticket to a sporting event. Six months later, what are you more likely to remember? The discount voucher or the event?

Vouchers and coupons are tools to achieve a goal, meaning you’ll recall the jacket you got with the coupon, but not the coupon itself. The sporting event, on the other hand, remains a memory for life, boosting your brand loyalty. This works well for businesses because they want customers to ultimately become brand advocates.

While traditional loyalty rewards are still in favor, more and more brands are looking to develop lifetime value with unique experiences. Brands are adding memorable experiential rewards that help create an emotional connection with customers. 

Need of the Hour

As a loyalty program manager, you might face challenges with attracting new audience segments. Let’s look at an example through the eyes of Mary Levy, a loyalty program manager at Cloud Kicks. Cloud Kicks is a manufacturer of stylish and comfortable custom sneakers. It recently acquired a footwear and apparel brand that deals in sustainable luxury. The acquisition is Cloud Kicks’s first step into sustainability. 

Cloud Kicks runs a successful loyalty program called Cloud Kicks Inner Circle, and uses Salesforce Loyalty Management to manage the program. Mary wants to alter the program to cater to a new customer segment, which comprises millennials and Gen Z. Based on her research, this segment drives nearly 85% of sales and is quite conscious of the environmental and social impact of purchases. 

Mary must alter the program to: 

• Keep members engaged.
• Improve member experience.
• Increase share of wallet and mind.
• Drive advocacy.

With that context in place, let’s explore the different loyalty experiences that you can set up using Loyalty Management.

Program Benefits That Amplify Engagement

Dashboards help loyalty program managers understand which rewards and promotions are working well, trends in member accruals and redemptions, program liability, and a lot more. For example, Mary uses data analytics dashboards in Loyalty Management for insight into customer trends. 

Click Next to view the dashboards.

Cloud Kicks Inner Circle is a tiered loyalty program, meaning members enjoy different benefits based on their tiers or ranks. The advantage of such a program is that it encourages members to engage more with the program to move to higher tiers, which have more exclusive benefits. 

The program has four tiers: Silver, Gold, Platinum, and Diamond. The existing tier benefits are popular with the current customer base. However, they’re mainly transaction-based, which is less appealing to the new customer segment. Some competitor programs also offer mostly dividend-based rewards. So Mary decides to introduce experiential benefits to the program to set it apart and capture a more significant share of customers’ attention and loyalty. Here are the new tier benefits she adds.

There’s a good mix of tier benefits that are bound to build positive emotions with the brand. Mary wants to make more changes. Her mind is racing with ideas. If you face similar challenges, you can use Loyalty Management to make your program more engaging. 

The Loyalty Management Experience

Loyalty Management enables businesses to define end-to-end innovative programs. Mary can use the platform features to plan rewards across the customer journey. Here’s a look at some Loyalty Management features. 

In the next unit, we review how to use Loyalty Management to set up a personalized promotion. 

Resources

• Salesforce Help: Manage and Work with Benefits