The way consumers and merchants feel about traditional customer rewards boils down to one emotion: frustration. According to loyalty trade association
93% of U.S. consumers agree that reward types are important to deciding whether or not they participate, but more than 54% feel dissatisfied with rewards offerings.
This disconnect results from a simple fact about incentivizing customers via traditional means — merchants don’t have the right options. Merchants that choose to discount their products with coupons or price deals run the risk of only appealing to deal-seekers. There’s no guarantee that rewards will go only to people who have earned them, which limits the types of rewards merchants can offer. At the same time, merchants that choose not to discount their products still need a way to incentivize desired customer behavior. Marketing only succeeds when it’s a two-way street.
For a loyalty rewards to work, brands at both ends of the spectrum need better incentive options at their disposal.
Quick thought experiment — picture the friend you are most loyal to in the whole wide world. Now, picture what you would give him/her as a gift if you had a budget of $20.
We can all agree that “$20 bill” would be a strange thought. Cash is always nice, but it’s never as meaningful as a something more personalized. No surprise, but merchant / consumer relationships have similar dynamics. Though cash for cash’s sake of course affects customer behavior, it only has a surface-level impact. Customer loyalty actually goes three levels deep (h/t Ross UMich):
repeat customer purchase comes as a result of a snap decision (e.g. “I haven’t been here in so long!”)
repeat customer purchase comes as a result of a logical decision (e.g. “This place has the best customer service.”)
repeat customer purchase comes as a result of an emotional decision (e.g. “This place is my absolute favorite in the whole world.”)
To create loyalty with deeper level impact — where customers actually feel emotionally connected to the sponsoring brand — merchants need to personalize incentives however possible. We’re all humans, after all.
Merchants using Thanx can deliver any incentive they can think of directly to customers. Generally, rewards fall into one of the following three categories: (1) Monetary — e.g. $10 cash back, buy-one-get-one style offers, 15% discount; (2) Experiential — e.g. pass to an exclusive event, conversation with a brand celebrity, VIP perks; and (3) Specific — e.g. signed brand collateral, premium upgrade, complimentary services.
Choosing a reward type(s) thus becomes a branding exercise. Monetary is easy to implement with broad appeal, but more expensive (and not appropriate for premium brands). Experiential is flexible and personal, but harder to scale. Specific is flexible and personal, but requires more training for employees. Regardless of type of rewards you want to offer to customers, Thanx guarantees all the following:
Expert perspective —
your Thanx Merchant Success manager draws on experience across multiple industries to help you decide the incentive that will work best for your brand.
Effortless redemption —
yes, increasing the value of rewards increases customer retention,
but so does reducing the friction of participating;
Thanx eliminates added steps at checkout to ensure maximum customer engagement.
Personalized communication —
all Thanx rewards communication is 1-to-1 and occurs in real-time according to your customer’s preferred shopping behavior, which results in engagement rates
between 50 and 80 percent.
Analytics with ROI to the cent —
Thanx provides real-time insight into the number of rewards issued, redeemed, and the effect of those rewards on average customer spending and visit frequency.
If you have more questions about how to incentivize customers or what types of rewards would work best for your brand, please
and we’ll get right back to you. We’re happy to help you figure out how to gain more visibility into the success of rewards programs so that you can use them to your advantage.