Which loyalty program structures and benefits do members prefer?

One of the most common questions I receive on my loyalty travels relates to program structures and benefits...which loyalty program structure and benefits do members prefer?

Before answering this question I begin with a set of 'strategy before structure' questions to gain clarity on:

  • Why a program? Do you really need a program? (This is a powerful process to uncover and clarify goals for the program and gain leadership alignment)
  • What's the vision for program? (A brand has a vision and so should a program)
  • What are the specific objectives? (what are the behaviour changes the program is aiming to influence);
  • How will success be measured? (clarity upfront on our three V's of Volume, Value and Velocity PLUS retention, Return on Loyalty investment...amongst others)
  • Who is the program for? (understanding the customers' and teams' desires/needs for a program, where a program can add to their lives or more importantly solve a problem)

When these questions are clarified, we can then start evaluating the program structures and relevant benefits that suit the 'strategy'.

The annual benchmark loyalty research study - For Love or Money 2019, identified five different program structures and benefits for members to identify their preferences.

We defined these in a generic way to understand what motivates members and what might influence their buying behaviour. They were:

  1. Earn and redeem rewards within vs beyond the brand's specific program eg with external partners
  2. Rewards for transaction - how much and how often they spend vs tenure - how long they have been a customer
  3. Rewards that are quick and small vs more substantial rewards that take longer to earn
  4. Rewards with small value and no minimum spend vs larger value rewards with a minimum spend
  5. Points vs cashback
  6. Tiered program structures vs no tiered programs

While the For Love or Money 2019 report reveals all the results and preferences across genders and the generations, the summary of the findings were:

Australian loyalty program members prefer to:

  1. Earn and redeem rewards outside the brand's program eg with relevant partners
  2. Be rewarded for how much and how often they spend
  3. Earn small rewards but get them more quickly
  4. Earn a small reward with no minimum spend
  5. Earn cashback
  6. Participate in a program with NO tiers

Although these findings set the process for defining a program structure and benefits, it goes without saying (although I am saying it), the program structure and benefits needs to suit the program's strategy!

I hope these insights help you build a thriving program.

Have a happy loyalty day!