Designing Rewards Programs for Customer Segmentation: Reluctants

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customer segmentation reluctants series CTA

As a middle-schooler, there are few things more terrifying than a school dance.  With the boys congregating on one side and the girls on the other, the normally friendly school gym was transformed into an uncrossable, yawning chasm.  No matter how much you might want to cross the room, it’s much safer and more comfortable to stay where you are.  This sense of reluctance is often so palpable you can almost feel it.

customer segmentation reluctants comfortable

Although this might seem like a fairly pointed  example, the mindset that shapes it is applicable in more situations than you’d think – including commerce.   In almost any industry, there will always be those customers who stand on the sidelines, unwilling to immerse themselves in the market.  These “wallflowers” are known as reluctants.

 

Defining Reluctants

A reluctant is exactly what it sounds like: an individual who is hesitant to engage.  This resistance could be directed towards anything, from new products  to entire consumer markets.  In the commerce world, reluctants often actually dread exploring new brands, much in the same way middle schoolers resist making the first move.

customer segmentation reluctants definition

In both cases, these individuals prefer to remain outsiders unless otherwise forced to engage.  This marks a distinct difference from pragmatic customers: while pragmatics are simply disinterested in the brands and markets they haven’t explored, reluctants often experience a general sense of discomfort and unfamiliarity.  These feels can then evolve into confusion and frustration.

With these negative feelings tainting their customer experience, many reluctants often wish to get out of brand interactions as soon as possible.  This presents a very interesting challenge to brands: how do you engage a customer who doesn’t want to be engaged?

customer segmentation reluctants pragmatics CTA

By now you’ve probably guessed the answer to this question.  Like the similarly unenthusiastic pragmatics, reluctants can be won over with a carefully structured rewards program.  While at first glance reluctants might seem immovable, they can actually be persuaded to view your brand as their new favourite.  All you need is the right motivator.

 

Designing Rewards for Reluctants

Motivation is an extremely powerful marketing tool.  Understanding the motives behind your customer’s decisions allows you to leverage them to have a profound impact on your brand.  That’s actually one of the biggest reasons brands start rewards programs.  While naysayers may argue you don’t need a rewards program to be successful, the majority of the world’s biggest retailers have recognized that they’re the perfect tool for creating loyalty in customers looking for products in their industry.

customer segmentation reluctants sweeten the pot

With reluctants, this is where it gets a little bit tricky.  Since they have no desire to engage, reluctants are harder to win over simply with the promise of additional value.  In order to get their attention, you need to deliver more than what they’d expect from a typical rewards program.  So let’s sweeten the pot.

customer segmentation reluctants welcome subtitle

There are very few people who like waiting for things.  Technology has made day-to-day tasks easier and quicker, and as a result customers have been conditioned for immediacy.  This lack of customer patience impacts virtually every aspect of their experience with your brand, including your rewards program.  The idea of having to save up rewards in order to cash in at a later time isn’t overly appealing to most customers, but for those who are reluctant to engage in the first place this can be downright debilitating.

customer segmentation reluctants motivate

This is where welcome points come in.  For someone who doesn’t want to engage, starting with a rewards account balance of zero might be  all the excuse they need to turn around and walk away.  By rewarding your customers simply for joining your program, you’re able to quickly fuel the satisfaction associated with participating.  Now, customers are motivated to continue earning points because they’re not starting at the bottom – instead, they’re already partway to the top!

customer segmentation reluctants satisfaction

Better yet, why not give them enough points to redeem a reward right away?  Few things are more exciting than getting something for nothing.  The best part is, the reward doesn’t have to be big to be impactful.  Regardless of what they receive – a 5% off coupon, a free sample, or even free shipping – the immediate satisfaction of the reward makes your program more tangible.  The emotional high this experience creates is what will pull reluctants back to your store in the future, increasing engagement as your brand is associated with satisfaction.

customer segmentation reluctants vegetable + butcher

If nothing else, welcome points will give reluctant customers an obvious incentive to continue exploring your program.  Having an easily-accessible explainer page or on-screen rewards modal will ensure these customers are able to find what they’re looking for and give you the chance to highlight why your brand is the solution they didn’t know they were looking for.  

customer segmentation reluctants welcome points CTA

customer segmentation reluctants personalization subtitle

According to IBM, 78% of customers only engage with brands that personalize experiences.  It’s no surprise, then, that personalized campaigns generate 6 times higher transaction rates than their generic counterparts.  What is surprising, however, is that only 30% of brands are currently investing in customer personalization.  

customer segmentation reluctants personalization stats

With these stats on hand, it’s not hard to figure out why so many customers are reluctant to engage with new brands.  New experiences can be intimidating even under ideal circumstances, so when customers are treated like a number rather than an individual, they’re quick to disengage and seek satisfaction elsewhere.  Recognizing a customer by name is a very easy and highly effective way to differentiate your brand from others.  Studies have shown that 56% of customers are more likely to make a purchase with brands that recognize them by name, and a rewards program gives you several opportunities to do that.  

customer segmentation reluctants spireside

Your account log-in or rewards modal is the most obvious (and easiest) place.  Once your reluctant customers have accepted your welcome reward, they’ll have a registered account with your program that they can access when they revisit your store.  Greeting them by name when they login lays the groundwork for a highly personalized experience.  This is largely because names are very personal.  By getting you and your customers on a first name basis, they begin to see you as a friend, a fact that inspires trust and familiarity with your brand.

customer segmentation reluctants aldo personalization

Retention emails can amplify this personalization.  By addressing your customers by name in every type of retention email you send you put personalization front and center, emphasizing its impact on your brand and its values.  

These small but effective personalization tools build an inclusive community around your brand. With this type of culture in place, anyone who was afraid of feeling like they don’t belong knows they’ll be recognized and acknowledged as an integral part of the brand community.  

customer segmentation reluctants category specific subtitle

We’ve discussed the value that personalization and a warm welcome can bring to your rewards program, but these initiatives can only get you so far. The reality is that reluctants are not likely to accidentally discover your brand if large department stores can deliver what they need.  That means that if they’re shopping around outside of their comfort zone, they must really need something.

customer segmentation reluctants enhance

Although it might be tempting to assume diversifying your rewards is enough of a differentiator, reluctants are harder to please than that.  In order to truly appeal to these hesitant customers, your rewards need to significantly enhance their shopping experience. The best way to achieve this is by demonstrating a keen awareness of what they need from your brand.  If your rewards speak to customers on a personal level, they become more valuable.

customer segmentation reluctants marvel insider

Marvel has done a fantastic job of tapping into their customers’ desires.  With their Marvel Insider program, customers are given the opportunity to earn exclusive rewards that could only be offered by Marvel, including the chance to be featured in a published comic strip.  These types of rewards demonstrate a real understanding of who their target audience is. While these rewards might not appeal to most shoppers, they’re irresistible to a Marvel fan.  With no transactional discounts, Marvel has ensured that only the most dedicated Marvel fans will want to participate in their program. They’ve created a sense of community that is hard to beat – one built by Marvel fans, for Marvel fans.

customer segmentation reluctants marvel rewards

By designing rewards that are so specific to your customer’s desires, even the most reluctant customers in your market will be drawn to participate in your program.  It’s very hard to resist something that feels tailor-made for you, making highly customized rewards the perfect way to round out the “rewards for reluctants” trifecta.

 

Pump Up Personalization

At the end of the day, reluctants need to be wooed.  In order to convince them of the benefits of engaging with your brand, you need to butter them up with clear value, immediacy, and personalization.  This can all be done through a combination of welcome points, personalization, and category-specific rewards.

customer segmentation reluctants takeaway

When you put each of these considerations into practice, it won’t be difficult to win favor from even the most reluctant of customers, opening the door to a lasting relationship that turns hesitation into eagerness.  

 

Want to learn more about customer segmentation?

Click on any of the links below to learn more about that customer group.

customer segmentation series link pragmaticscustomer segmentation series link connoisseurs

customer segmentation series link savvy opportunistscustomer segmentation series link brand loyalists