Organizations in the retail and hospitality industries have long recognized that loyalty programs can improve customer retention and increase lifetime value. Whether you’re racking up airline miles, getting discounted prices and free shipping, or redeeming points for a grande latte, you feel like you’re getting value from your interaction with the brand.
by Jennifer Waltner
That sense of value hinges on the loyalty benefits working as expected. That’s why it’s critical for organizations to make sure transactions function properly and encourage repeat business, rather than creating frustration. Some key considerations for testing loyalty programs:
Is it easy to join?
There’s a reason barcoded key tags to scan at checkout were such a popular option for many retail rewards programs… they didn’t require a great deal of effort. Often, customers didn’t even need to give stores their names to enroll in loyalty programs. Shoppers who provided a name and address could get additional benefits, like coupons via mail or email, as an incentive for sharing their personal information.
It’s important to make the sign-up process as easy as possible to encourage customers to participate and inspire them to interact more with your brand. While some paid programs may require more information, ensure opting into your rewards program is simple and user-friendly.
Do loyalty points accrue properly?
For points-based rewards programs, companies need to make sure that customers earn the correct number of points based on their purchases. For example, Starbucks periodically offers Double Star Days where rewards members earn extra points. Customers who spend extra money on a Double Star Day expect to get credit for those additional purchases.
In a recent webinar, Hamish Sherlock shared a story about an Applause customer that offered a promotion where credit card users earned triple points for food purchases. But when cardholders ordered food delivered through Uber Eats or DoorDash, they didn’t get the anticipated rewards because the delivery services were categorized as transportation companies. Fortunately, Applause testers found the issue early on, so the company was able to correct the problem before it impacted thousands of customers.
Can customers quickly check their balances and benefits?
When consumers are trying to redeem points for specific items or rewards, it’s important that they can see progress to the goal. Visibility into rewards balances can encourage customers to change their behavior to accrue more loyalty points, like when my husband and I were planning a trip and increased our use of a credit card that gave us free airline miles. I’ll also admit that I’ve dropped a few extra dollars at Sephora to earn enough points for a premium skincare product sample.
Can customers easily redeem their rewards?
There are several factors to consider here, for both online and in-person purchases. Online, you may want to offer customers the availability to redeem points at checkout. In-app payments may prompt users to apply loyalty points to cover purchases, or use them for add-ons. In-store, your staff may need training on how to accept points for payments, either on their own or combined with another payment method.
Customers who can’t figure out how to redeem their rewards points or easily access their benefits can quickly become frustrated. I had first-hand experience with this when I helped a local meal prep and delivery service develop an e-commerce website. Before building the website, the service had offered a program where customers could buy pre-packaged meal bundles: for every 10 meals customers purchased, they would get two free. It was great and everybody liked the notion that they were saving money. The problem: the online ordering system couldn’t accommodate a meal bundle and order for meals in the same transaction. Despite the notifications we put in the online store, customers were confused and didn’t understand why they couldn’t order.
Remove obstacles and create simple ways for customers to gain the most value from your loyalty programs. Amazon Prime makes it simple for members to take advantage of the free shipping benefit: shoppers can simply check a box while browsing to filter out search results that aren’t eligible. The Amazon app offers members convenient access to a code they can use for discounts at Whole Foods Market.
Done right, loyalty programs add value for brands and customers alike. Invest in testing to make sure your company can reap the rewards of a well-designed and executed program.
Get more insight on how to test loyalty programs as part of your payment process in the webinar End-to-End Payment Workflows: Everything You Need to Know.