You’re in charge of a loyalty program that does okay. Not great. But not terrible.
Every month you get a respectable number of new members. But after a while they stop using the program. Or worse, they never start.
It sucks to put time into attracting new members just to lose them in a couple months with no impact on your bottom line.
So the question is how do you turn those members into spenders?
Answer... digital coupons.
Why Use Digital Coupons in Your Loyalty Program
The idea behind coupons in loyalty programs is simple: members browse coupons, load ones they want to their card, and redeem in-store.
This does a couple things.
First, it drives store traffic, and increases sales and purchase frequency.
The cherry on the cake though is the tracking.
Say Maj (yeah, I’m talking Palmolive Maj here) redeems 10 coupons. If those are print coupons, you’d only know they were used. But with digital coupons you can learn which products Maj needs (coupons she loads) -- and what products she’s actually buying (coupons she redeems).
You get a better idea of your coupon ROI and you get insight into what offers might appeal to Maj.
Sounds good, right? But here’s the deal.
You can’t just throw coupons at people and expect them to go nuts.
They’re coupons not cars.
You have to form a habit of loading coupons. And that’s where the real strategy comes in.
How to Create Habits of Engagement
Essentially, the goal is to get customers to habitually log onto your loyalty program, check out new deals, and load offers to their cards.
How do you get there?
First, release new coupons in waves. Don’t release 20 new coupons all at once. Put out a couple of new ones each day so customers have to keep coming back to score the best deal.
Then use gamified sweepstakes and contests to jump-start that habit. Offer in-game rewards for loading coupons. And encourage coupon exploration by integrating it within the game.
Customers play the game ‘cause it’s fun and they could win a prize. And the contest gives them a reason, beyond just the discount, to come back each day and load coupons.
Run the promotion for a few weeks? You’ve created a habit of coupon loading that’ll last long after the campaign ends.
Reward for Redemption
Here’s the thing; you don’t care if people load your coupons if they aren’t redeeming them.
So what you need to do is reward for redemption. I’m talking stuff like loyalty points, contest entries, or in-game perks..
Add a little icing on top and you’ll get a lift in redemption.
Increase Basket Size
A perfect system kicks down coupons for things that increase basket size, not just change buying behaviour. You want shoppers to buy more stuff, not just different stuff.
To do that, you need to know what they’re already buying.
Let’s say you know Maj (yup she’s back!) buys a lot of Head’n Shoulders (hey, maybe she’s got dandruff!) Well only a dork would send her a coupon for shampoo. You’re not a dork though, so you’d send her a coupon for a matching conditioner.
Then if she redeems that coupon, you’d target her again with a coupon for hairspray. The more Maj interacts with the program, the more you know about her and the more effective your marketing will be.
The best part of this is you move away from “buy more shit” to “buy specific shit.” And when you do that, your CPG partners will kick in dough to make sure they, and not their competitors, are featured on those coupons.
The Bottom Line
Digital coupons can supercharge your loyalty program. You just have to be strategic about how you use them.
Form loading and redeeming habits with gamified sweeps and leverage usage data to target customers with personalized messaging and you’ll be cookin’ with gas!