Using gift cards in your customer rewards program
One of the most important metrics in your KPI roster is customer lifetime value, also known as CLV. In short, CLV is the amount of money a specific customer spends over the course of the business relationship. One way to ensure you keep your CLV metrics high is to improve the overall customer experience by rewarding customers for their continued brand loyalty.
This is the essence of a customer loyalty program. Depending on the scale of your business and the type of service or product you provide, you can craft a customer loyalty program that keeps your loyal customers coming back for more.
Loyalty becomes automatic when you give clients something of value, and an easy way to accomplish this in your customer loyalty programs is through gift cards.
What is a customer rewards program?
A customer rewards program is a recognition program that incentivizes certain behaviors in your customer base. With a program, you can recognize long-term clients and repeat customers, thank them for referrals, encourage them to sign up or increase their service level, and more.
An effective customer program lets your customers feel the love and employs a psychological principle called the Endowment Effect. Simply put, people feel more connected to a person or company when they receive a gift. The desirable outcome of this is their inclination to reciprocate - which translates to better customer engagement and longer customer retention.
Customer rewards and loyalty program ideas
Not all programs operate the same way. There are a few ways to connect with your customers throughout the customer journey. Common touch points and types of reward programs include:
New customer gifts
Giving your customers a warm welcome when they join or upgrade can help cement brand loyalty early on. Even small rewards, such as a coffee gift card, can leave a positive impression and improve your overall CLV.
Rewards for a specific action
These programs might let an existing customer earn a specific reward like a gift card for a referral or other business-building activity.
Viewed another way, these programs can become customer service tools for when your product or service misses the mark. A small gift in return for continued patronage after an issue can go a long way to improving the customer experience. A gift card could be internal (acting as a store credit) or external (for example, American Express or Amazon prepaid gift cards).
Longevity is the secret sauce to stable revenue, so any opportunity to reach your customers is a chance to keep their business. Some reward programs include touches during the year such as birthdays, customer anniversaries, or referral tiers. Any one of these can be an excellent opportunity to retain customers and encourage referrals and upgrades.
Most people recognize the most common version of this system: air miles. As a cardholder, you earn miles for spending on a card (for instance, a reward point for every dollar you spend), and can redeem those points for flights or upgrades.
Another version of an effective points program is the famous Starbucks rewards program. Using their app, customers can earn “Stars” for their purchases and use these to get free drinks and food items.
Five benefits to using gift cards in customer rewards programs
People are always excited for a unique customer experience like receiving a gift card; however, there are many additional benefits to making e-gift cards the basis of your gifting programs. They are flexible, easy to administer, and applicable to a variety of uses across your organization.
The top five best features of gift card-based programs are:
Ease of delivery
Sending e-gift cards is an excellent way to get rewards in the hands of your loyalty program member right away. It cuts down on unnecessary manual tasks like shipping and tracking manual gift cards. Instead, your recipients can get their rewards in the manner easiest for them (email, social media, text, or chat platform) and enjoy using them right away.
Gift cards offer high “surprise and delight” opportunities. It makes your loyal customers feel more connected to your brand and can even improve customer satisfaction and awareness - over 60% report that they can recall a brand name a year after receiving a promotional gift. This can greatly improve your customer retention metrics.
Using gift cards as the basis of your customer loyalty rewards program makes it very easy to customize your offering by the campaign, customer, and price point. Using gift cards over other promo items (like swag or redemption credits) means that customers can get exactly the item they want, right at the point of receipt.
User and campaign data
By using a platform to administer your customer loyalty programs, you gain access to a wealth of data. Besides basic send data like open and click-through rates, you’ll be able to visualize in real-time the effectiveness of your campaign.
How to manage a customer rewards programs
While every customer relationship program is different, the most important factor in any program relies on the basics: Know your customer.
The cornerstone of any customer loyalty program is good customer data. Understanding your customer behavior and motivations is vital to rewarding loyal customers in the way that will have the most impact. For each customer, you need to have a granular view of their key metrics. Some good data to track in your CRM or marketing platform include:
Demographics - Age, interests, income level, family status
Geographic - Country, city, regional data
Customer - Plan or product details, CLV, length of service, repeat purchase data
Referrals - Brand advocate data: number of referrals and resulting revenue
By having a granular understanding of your customer data, you can take the next step: automating your giving with a gift card platform like WeGift.
How to scale a customer loyalty rewards programs with WeGift
Obviously, building an effective customer loyalty program requires the help of a robust management platform. Automation and segmentation are important even for a small business, but especially for high-growth companies looking to effectively scale.
Fortunately, with WeGift you can manage and deliver on your customer loyalty programs from one centralized platform that seamlessly integrates into your other CRM, accounting, and ERP platforms. It can also improve the ability of your customer service and sales teams to increase customer retention.
Scaling your incentive programs with WeGift gives you full flexibility to develop any number of effective incentives and rewards for your best customers. You can create experiences with direct giving, or use our platform to implement a fully automated loyalty points system.
You’ll also take advantage of the full data and reporting capabilities in one easy-to-integrate system.
You’ll have access to data including:
- Profitable customer and repeat customer data
- Reward categories and brands chosen
- Time to open and/or purchase completion
- Purchase amounts and remaining balances
- Demographic data on card selection and redemption data
- Overall ROI for campaigns cut across any number of metrics
- Customer service data (like win-back and resolution success rates)
Is your customer loyalty program ready to scale to the next level? Find out during a demo of the WeGift platform.