Editor’s Note: This post was originally published on July 27, 2017 and was updated for accuracy and comprehensiveness on July 8, 2019.
When assessing the performance of your rewards program, redemption rate is a metric you’ll want to pay special attention to. However, what if your redemption rate isn’t very good?
A low redemption rate usually stems from a lack of customer engagement. If your customers aren’t earning rewards, it stands to reason that they’re not redeeming them, either. The best way to change that 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?
While promoting your loyalty program can take a number of different forms, 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.
In order to optimize the performance of your program with email, there are five types of messages that you need to include in your marketing strategy:
- Points balance emails
- Bonus points campaign emails
- Redemption campaign emails
- Referral program promotional emails
- Points for product promotional emails
Let’s learn how to create, execute, and optimize each of these email campaigns — your redemption rate will thank you!
Remind customers how many points they have with points balance emails
Goal: increase program visibility and awareness
Points balance emails are the easiest way to encourage your customers to engage with your rewards program because they remind shoppers that they have value waiting for them. Most of your customers are enrolled in a number of different programs, and keeping all of their points balances straight is extremely overwhelming.
You can make this easier for your members by regularly reminding customers of what they’ve already earned with your program.After all, if customers 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!
By sending semi-regular balance emails, you can remind your customers of what they’ve already earned with your program, what they can do with them, and how they can earn more. This makes it extremely easy for them to understand not only how to get the most out of the reward points they have but also how to replicate that value in the future. In addition, these emails will increase the visibility of your program, putting it back on your customers’ radar and encouraging them to spend more with your brand now and in the future.
Vape Superstore is a great example of this points balance email marketing strategy at work. Every time customers earn more points, they’re sent an email that tells them how many points they have to spend and what those points are worth. They also include a link back to their store, making it more enticing to return to the store to continue earning.
In these ways, they make it easier to see the benefits of redeeming their rewards and push members that much closer to cashing in their points.
Encourage customers to re-engage with bonus points campaigns
Goal: drive customers to higher redemption thresholds
Points balance emails are great for getting your program in front of your customers, but sometimes they need a bit more encouragement to actually engage with your loyalty program. This is especially true 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 make your rewards appealing to everyone.
Bonus points campaigns put your best rewards in reach by giving customers easy opportunities to significantly increase their points balance in a hurry. This makes the value of participating in your program by making your best rewards more achievable.
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.
No matter how often you choose to run them, letting your members know about them a week or two in advance is the key to spiking your customer engagement rate. 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 ads, you can make sure that all of your customers know about your bonus points promotion and can’t wait to participate.
Motivate customers to spend their points with redemption campaign emails
Goal: increase points redemption rate
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 your program’s success hinges on them following through and actually redeeming those points. If they don’t, your rewards program is in danger of suffering a severe case of points breakage.
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.
You can also let customers know that their points are about to expire. Points expiry is a powerful motivator for getting customers to take action due to a concept known as loss aversion theory. When your customers feel like they’re about to lose something of value, they’ll be more likely to do whatever it takes to retain it, prompting them to spend their points as soon as possible.
Packlane takes this approach with their redemption email campaign. While these emails might look simple, they pack a powerful punch for members who have either been holding onto their points or forgotten about them. Now, it’s hard to ignore the risk of losing points you’ve worked hard to earn and you’re more likely to return to their store for one more purchase.
Both of these strategies encourage customers to spend points now, and are guaranteed to drive up your redemption rate!
Inspire loyal customers to refer their friends with referral program emails
Goal: motivate brand ambassadors to share
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 brand ambassadors by incentivizing them to actively seek those kinds of conversations.
The best way to develop more brand ambassadors is to 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 referral from Vegetable + Butcher puts each of these elements to the test. Not only have they made it clear what both their existing customer and their referred friends can earn, they’ve also included a clear CTA that makes it easy for customers to start referring right away.
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.
Celebrate your customers with birthday rewards emails
Goal: offer a personalized rewards experience
Everybody likes to feel special, and your customers are no different. That’s one of the reasons shoppers shoppers join a rewards program in the first place! However, while being a member of your awesome program is a great start, you can take those feelings of inclusivity and luxury even further by incorporating birthday rewards into your email marketing campaigns.
Birthday rewards are bonus rewards that customers earn every year on their birthday. These rewards act to not only personalize your customer experience but also create a more genuine connection. With birthday rewards you can provide your customers the kind of personal recognition that builds trust and positivity between them and your brand.
Sending customers a personalized email that wishes them a happy birthday with a gift of reward points — like this one from Moroccanoil — helps make your program’s perks feel more than a simple discount. Instead, your rewards begin to feel like gifts, which are infinitely more valuable and personal. These positive feelings will pull customers back towards your program and store, boosting both your program engagement and site traffic all at once.
Effective email marketing is the best way to improve your loyalty program
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 offering birthday 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!