Building a rewards catalog
Rewards selection is a crucial element in any loyalty program that has a meaningful impact on its efficiency. Even if a program is simple and customer-friendly, it is not necessarily attractive to customers. Fortunately, there are several effective ways to get customers interested in the program – one of which is the rewards catalog. Keep reading to learn about the core elements of designing a rewards catalog.
Start with profile matchingExamine the profiles of your program participants (or potential members). Which segments are the most valuable for your business? What are their demographic and psychographic characteristics? Gather as much information as you can.
Interview your sales and marketing teamsSchedule a brainstorming session with your sales and marketing team. During the meeting, try to focus on your pre-defined segments. What do your customers like and dislike? How has your audience reacted to different marketing campaigns in the past?
Analyze past redemption or behaviorIf you managed similar program in the past, check the patterns of customer behavior. Which items might be most appealing to your audience?
Analyze customer expensesStudy the distribution of your audience across different spending levels. How many fall into the lowest or the highest threshold? What is the average purchase level - and how many points can they earn annually?
Select rewardsSelect several rewards for each segment and be sure that each set is suited for each segment. Customers like to have a choice, but not too many choices that it becomes overwhelming. You should answer the following questions: What is the most valuable gift that you can offer for the average purchase level for each segment? What kind of rewards are the most desirable?
Track redemption and make corrections
Staying up-to-date with customers’ changing interests, the unstable nature of the market, and constantly changing trends is a challenge for marketers, but it’s necessary to ensure the rewards catalog is providing the best possible rewards for customers. The rewards catalog will require adjustments from time to time. Track your members' behaviors and make appropriate corrections.
The main rule for the rewards strategy is to choose the right price for the right audience. Although this seems obvious, it requires knowledge about customers and their preferences.
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