Reward Program Strategy

How to Improve Your Rewards Program with Effective Email Marketing


When assessing the performance of your rewards program, redemption rate is an important metric you’ll want to pay special attention to.  Knowing what percentage of issued reward points are being redeemed  is a great way to determine if your customers are actually engaging with and using your program.  A healthy program aims to have a redemption rate of at least 20%, but what if yours doesn’t?  

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A low redemption rate usually stems from a lack of customer engagement.  If your customers aren’t completing valuable actions to earn rewards, it follows naturally that they’re probably not going to be redeeming very many rewards either. The real question, then, is how to get your customers to participate in your program and all it has to offer.  The easy answer is simply to tell them to!  Effective promotion can make all the difference when it comes to rewards program engagement.  After all, if customers don’t know about your program, how can they be expected to engage?

Promoting your rewards program can take a number of different forms, from  on-page banner ads or a link in your navigation bar to a designated program explainer page.  However, while all of these strategies are effective there are few things more powerful than targeted email campaigns.  Studies have shown that segmented emails are responsible for generating 58% of all ecommerce revenue, and 72% of customers prefer to receive promotional content via email than any other social marketing channel.

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Clearly email is a fantastic place to start actively working towards improving your program’s redemption rate, but knowing which emails to send and when to send them is the key.  When it comes to optimizing the performance of your program, there are five types of emails that you need to be including in your marketing strategy:

  • Points balance emails
  • Bonus points campaign emails
  • Redemption campaign emails
  • Referral program promotional emails
  • Points for product promotional emails

Some of these email strategies likely sound familiar while others might be something you hadn’t previously considered. Rest assured that by the end of this article you’ll have everything you need to create, execute and, optimize each and every one of these email campaigns- your redemption rate will thank you.


Building Better Marketing with Points Balance Emails

The phrase “out of sight and out of mind” is very applicable to loyalty programs, as the average person is enrolled in 13.3 different rewards programs.  With so many different programs to keep track of, it’s inconvenient  for members to remember the ins and outs of each of their memberships.  This “rewards saturation” makes it very easy for customers to sign up for a program and never think about it again.

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In order to battle this disinterested membership attitude, you need to make your program more visible to both new and potential customers.  More specifically, you need to make the value that your program provides accessible at all times.  Most customers understand the basic mechanics of a points-based rewards program (spend money, earn points, redeem rewards) but if they don’t know how many points they have and how close they are to a reward, the value of those points disappears.  It’s hard to get excited about something you’ve forgotten!

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That’s where points balance emails come in.  By reminding customers of the points they have and what they can do with them, these emails give you the perfect opportunity to encourage customers to spend their rewards on a regular basis.  This in turn drives up your redemption rate while simultaneously reducing point breakage.

kristalize points balance email

Kristalize Jewelry is a great example of the points balance email marketing strategy at work.  With each email, customers are told how many points they currently have to spend and how close they are to their next reward.  Additionally, Kristalize provides a link to earn more Jewels, making the earning and redemption process easy to access and visualize.  In these ways, they make it difficult for customers to ignore the benefits of redeeming their rewards and push them that much closer to cashing in their points.

improve email marketing points balance email summary


Building Better Marketing with Bonus Points Campaign Emails

Points balance emails can help put your program in front of your customers, but sometimes they need a bit more encouragement to truly engage with your program - especially if their points balance isn’t that high.  It can be very demotivating to be shown the rewards you can’t afford, so you need to find ways to take your program’s incentives up a notch.

improve email marketing bonus points rewards in reach

Bonus points campaigns put your best rewards in reach by giving customers easy opportunities to significantly increase their points balance in a hurry.  This increases the value of participating in your program by making your best rewards more achievable.  Sephora has been running bonus points promotions for years with great success, and their winning strategy can easily be adapted to fit your brand!  

One of the most important considerations for running an effective bonus points campaign is how often you're going to run it. Some brands choose to run it on the same day every week which helps groom their customers to engage and spend more points on a regular basis.  Others choose to run their bonus points campaigns around certain holidays in order to build on the excitement customers already have for seasonal shopping. You can also coordinate your bonus points campaign with a new product release to help create interest in your brand.

improve email marketing one love organics bonus campaign example

No matter how you choose to set them up, bonus points campaigns are only valuable if your customers know about them!  Promotion is key to the success for any campaign, so make sure your customers know about it a week or two in advance.  One Love Organics is exceptionally good at keeping their customers informed about their upcoming bonus points days.  In this case, they’ve decided to run their program over the course of one weekend, with customers earning double the points on any full size product.  Their emails are clear and direct, making the promotion’s value easy to understand.   

By combining the promotional power of email, social media, and on-page advs, you can make sure that all of your customers know about your bonus points promotion and can’t wait to participate.

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Building Better Marketing with Redemption Campaign Emails

Customers like to see a lot of points in their accounts.  When they see a high number, they begin to imagine all of the awesome rewards they can get, but that high number can only get them so far.  At the end of the day, your program’s success hinges on customers following through and actually redeeming those points.  If they don’t, your rewards program is once again in danger of suffering a severe case of points breakage.  

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A redemption campaign beautifully complements your bonus points promotions and regular balance emails to push your customers across the finish line.  You can do this in a number of ways.  For starters, you can promote a particular way to spend rewards.  This could either be a new reward you’ve recently added to your program or a popular reward that customers engage with on a regular basis, like free shipping.  

improve email marketing indigo points top up example

Secondly, you can increase the value of your customer’s points for a certain period of time.  Indigo is the absolute master of this.  A couple of times a year they send their Plum Rewards members an email indicating their their points balance has been “topped up”.  This limited time promotion bumps customers to the next reward redemption level, giving them the chance to redeem for an even bigger reward by making another purchase in a short period of time.  

Segmenting their customers by points balance allows Indigo to show customers the monetary value of their points if customers redeem right now.  This is much more actionable than simply letting a customer know they have points.

improve email marketing indigo summer unplugged campaign

Finally, you could increase the value of a customer’s points when they buy a specific product.  Once again, Indigo does this very well with their Summer Unplugged campaign.  In this case, customers were promised $10 in Plum Points if they purchased five book products. This promotion encouraged customers to focus on a particular area of their store, directing purchase intent for the length of the promotion.

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All three of these strategies encourage customers to spend points now, and are guaranteed to drive up your redemption rate!

improve email marketing redemption campaign summary


Building Better Marketing with Referral Program Promotional Emails

When customers like your store, they’re bound to tell their friends about it.  This type of “organic marketing” is what helps establish trust between prospective shoppers and your brand.  Referral programs help you get the most out of these loyal customers by incentivizing them to actively seek out those kinds of conversations.  

improve email marketing referral program purpose

Many businesses have made these kinds of referrals the backbone of their business and have seen phenomenal success.  The good news is, you can, too!  By drawing on your existing loyal customer base to generate more, you can create more brand ambassadors while also promoting the value of joining your rewards program.  

improve email marketing fre referral example

The best way to grow more brand ambassadors is to simply let customers know about your referral program.  Email your best customers highlighting how much you appreciate their business, and introduce your referral program and its benefits.  With a clear call to action inviting them to share your brand now, you can put the power of promotion in their hands and expand your marketing reach.  

This word of mouth marketing will complement your own promotional efforts on your site and across social media, saturating your brand with even more opportunities for customers to find value.

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Building Better Marketing with Points for Product Promotional Emails

There are very few things as satisfying as getting something for free.  No matter what it is, free feels good, especially when you know how valuable that free item is.  You can incorporate the satisfying feeling of free into your rewards program with a product reward catalog.

A rewards catalog is a dedicated page on your site that shows customers what rewards they can earn as a member of your rewards program.  Reward catalogs are a great way to show customers just how valuable your program really is.  When customers can tangibly see what they’re working to earn, the perceived value increases demand and motivates customers to work harder to achieve it.  

improve email marketing muscle and strength rewards catalog example

This is especially true if the items available can only be earned with rewards points.  By offering customers exclusive product rewards, you once again infuse your rewards program with value shoppers can’t find anywhere else.  Similarly, offering branded swag creates an exciting rewards experience that feels unique to your brand.  Muscle & Strength does this really well, giving customers pages of rewards to look through at every stage in the earning and redemption process.  

To amplify your product reward appeal, incorporate your rewards into your regular points balance emails.  Show customers examples of the products they can earn, and get them excited about the value of being a member in your rewards program.

improve email marketing points as gift

Promoting your rewards in this way presents your points as gifts as opposed to simply a discount, pumping up their value and making your entire program feel more personal.

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Improving Your Rewards Program with Effective Email Marketing

Hopefully you can now see how each of these promotional campaigns complement and connect with  one  another.  Regular points balance emails set customers up for your bonus point and redemption campaigns, while learning more about your referral program and product rewards will highlight further value they can find by engaging with your brand.

With just a few simple email campaigns, you can heighten your customers’ desire to engage with your rewards program and launch it into a new phase of success!  

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