If you’ve created a rewards program, congratulations - you’ve taken one of the first steps towards increasing customer retention. Unfortunately though, one of the most common mistakes you can make when setting up your rewards program can leave your customers feeling under appreciated and your program undervalued.
The mistake we are talking about is known as the Trivialization Effect.
What is the Trivialization Effect?
Summarized by Coglode in their insights blog, the Trivialization effect is the idea that “by acknowledging a customer’s loyalty with a minor financial gift, we shift their perception of the relationship to a trivial, transaction-based one.” In other words, too many low-value rewards is disastrous to the emotional relationships you’re building with your customers.
“An over-emphasis on rewarding customers in a minor transactional fashion can dangerously weaken the bond between you and your loyal customer.”
To put the idea into context: it was my birthday earlier this month, and my team at work were kind enough to get me a birthday card.
In it, they all wrote something nice and wished me an awesome day - it was honestly so great to read. I was thankful for it because I wasn’t expecting such a thoughtful gesture, and it really showed how much they valued having me on the team.
Now, imagine the level of appreciation I would feel if they had given me the card, but instead of writing what they did, included a 50 cent gift certificate for a coffee shop.
This is the trivialization effect.
How to prevent your points from becoming trivial
Trivialization can happen in your own reward programs when your customers complete a bunch of actions that earn them points, but don’t reach a balance anywhere close to redeeming them for a reward. So how can you prevent points from becoming trivial?
The key is to allow customers to understand the value of each action they complete. A single social media like or individual product review shouldn’t earn enough points to be cashed in, but a combination of the two and a small purchase should get them well on their way to hitting a redemption threshold.
Visually displaying how close members are to their next reward will show them just how valuable each action is. Seeing the needle move with each completed action will show them the value of the points they earn, and keep them earning for the thrill of the next reward.
Avoid the Trivialization Effect with experiential rewards
Another way to effectively avoid trivialization is to include experiential rewards as part of your program. Experiential rewards exceed what your customer is expecting out of your program by offering them an experience they can’t get anywhere else.
This can be done by letting members cash in their hard earned points for valuable experiences, or by including them as exclusive rewards that are always available to elite members. These experiences will create an emotional connection with your customer, and let them become immersed in your brand community.
To show you what this looks like in action, here are a couple of my favourite examples of experiential rewards:
Elf Cosmetics’ Beauty Squad
Elf Cosmetics has some great experiences as part of their rewards program. These perks are built around the idea of giving their members, the Beauty Squad, power over product sales.
As you can see in their incredible explainer page above, when members enter the Rising Star tier of their program, they get early access to sales. This type of experience gives program members an elevated sense of status being as they can get the deals before anyone else.
Then for their top tier members, they give them the ability to choose their own sale day. Giving them this perk puts a huge emphasis on the value of this reward, because let’s be honest, who wouldn’t want the ability to pick the day things are on sale?
Experiential perk exclusivity gives the lowest tiers something to aspire to so they strive to keeping earning points and move up through the ranks. By building experiential exclusivity into their rewards program, Elf has created a great barrier against trivialization without having to give away huge discounts.
Jimmy Joy’s Time Tokens
Instead of only rewarding their customers with great sales, meal replacement company Jimmy Joy also brings their VIPs into the product development process.
Every so often Jimmy Joy comes out with limited runs of special flavors, so one of the perks they give their members is the chance to vote on what the new flavor is going to be - an experiential reward we can really sink our teeth into.
Exceptional reward experiences are highly valued when it takes effort to achieve them.
Having limited flavor runs built into their business model makes this experience hard to replicate, but that isn’t what stops it from being trivialized. By only offering it to their higher VIP tiers, Jimmy Joy ensures that the customers who get the experience have placed multiple orders, interacted with them on social media, and referred customers to them. In other words, these customers have put in the effort to create a connection with the brand beyond a simple sale.
Customers have earned the experience and understand its value, and something that’s valuable is the opposite of trivial.
Emotional connections are the opposite of trivialization
Your customers want to feel valued, but when you don’t show your customers that the points they earn have real value, over time they stop caring - and your program becomes trivial.
When you show your customers the value of every action they perform, as well as offer them unique experiences that resonate with them, it allows you to make emotional connections that will never be trivialized.