Zsuzsa Kecsmar is the Chief Strategy Officer of Antavo Enterprise Loyalty Cloud, a top loyalty technology vendor.
Company leaders who want to create loyalty programs that stand out in a crowded marketplace are constantly looking to innovate. Attracting and retaining customers is the name of the game in loyalty programs. Traditionally, loyalty programs were seen by customers primarily as a way to get discounts, points and cashback rewards, but as consumer preferences have evolved, so have the rewards that loyalty programs offer.
Experiential rewards are not as transactional in nature (like discounts and cashback), but as the name implies, provide customers with unique and memorable experiences. Some of the most common experiential rewards I see are exclusive events, workshops, behind-the-scenes tours, access to VIP services and travel opportunities—one of the most aspirational benefits of all, according to Mike Capizzi.
This shift from purely transactional benefits to memorable, emotional connections with customers is significant—and is a sign of the times. This shift has allowed businesses to create loyalty programs that stand out and strengthen their relationships with customers.
What are the benefits of experiential rewards?
1. Forge lasting emotional connections and build lifetime value.
Experiences can create lasting memories that resonate with customers on an emotional level. Discounts simply don’t have that power. When customers associate positive emotions with a brand, they may be more likely to remain loyal or become true brand advocates.
Offer experiences that align with your company’s values and your customers’ interests so you can build authentic, lasting connections that extend beyond mere transactions. Not only can you build connections, but you can also impact customer lifetime value (CLV). Extended loyalty can lead to more repeat purchases and decreased acquisition costs, boosting CLV.
2. Stand out in a world full of rewards programs.
In a marketplace where products and services can often seem interchangeable, businesses must find ways to stand out. Discounts and cashback are great—especially when times are tight. But I’ve noticed they don’t really have star power like experiential rewards do.
By offering something truly unique—something that customers won’t be able to get easily elsewhere—you could be more likely to secure a competitive advantage with your loyalty program and stay on customers’ minds, versus simply offering savings.
3. Drive word-of-mouth marketing.
In my experience, satisfied customers are the most effective brand ambassadors. Experiential rewards are simply so shareable. Each reward is an opportunity for customers to get excited and share their experiences with friends, family and social media followers.
Why should you be concerned with word-of-mouth marketing like this? People simply trust recommendations from those they know more than they trust ads and marketing copy.
4. Collect valuable customer data.
One of the greatest benefits of running a loyalty program is the insights you get into your customers’ behavior. Rewards programs are an incredible way to get zero- and first-party data. Experiential rewards in particular, thanks to their attraction, are another great way to gather valuable customer data.
The more you organize in-store events or virtual experiences, the more you can request customer feedback and understand preferences. These insights will help you optimize your marketing strategy, improve products or services, and create future experiential rewards that make customers really smile.
How can companies get started with experiential rewards?
If you’re just getting started in the world of offering experiences or you’re looking to take a fresh approach to your current experiential rewards, here are a few places to start.
1. Personalize your rewards.
Spend some time getting to know your customers so you can create rewards that speak to their preferences. Don’t be afraid to ask questions that may, at first, seem “outside the box,” such as hobby or lifestyle questions.
Visually pleasing quizzes based on photos are a fun way to do this. Why? Because if you know a group of customers are travel enthusiasts or wine lovers, offering a travel package or winery tour will certainly be more impactful than a generic, untailored experience. This personal touch shows that you value your customers and understand their interests.
2. Seek out reward partnerships.
Crafting experiential rewards that resonate with your audience’s interests and preferences is key. Consider what types of experiences complement your current offering, but don’t come from competing organizations.
A fashion retailer, for example, might offer travel and dining options (so customers can show off their new look), or entertainment retailers might consider offering related services from partners that help with repairs—or things that everyone needs, like transportation discounts.
Partnering with noncompeting organizations can help you meet customer interests while keeping reward costs in check.
3. Consider experiences that don’t break the bank.
Rewards can be expensive, and experiential rewards are even more so. If you’re working with a tight budget, start with things you already know you can do while accommodating the highest number of loyalty program members.
Early access sales are a great place to start, giving members first dibs on new product lines. Members-only products are another option. Dedicated customer service and members-only in-store events are other options that won’t burn through your budget too quickly!
Get ready to sell those experiences.
Loyalty programs are complex, and there’s a lot to think about regarding marketing, but experiential rewards are a relatively easy sell when done right. Introducing experiential rewards in your loyalty program can be an excellent strategic move. By investing in memorable experiences, you can foster customer loyalty, outshine your competitors and collect the information you need to keep customers around for the long run.
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