A simple framework for your loyalty program
Tool-agnostic and based on gaming theory
#CX #UserExperience #LoyaltyPrograms
#ServiceDesign #BusinessDesign #StrategicDesign
Frequently, companies loyalty programs as complex back-end operations. They tend to forget that the proper customer experience is what creates loyalty.
I have worked with clothing companies, consumer goods, health and transportation — and the bottomline is that the first forgotten part is how the end people feel about the points, coins, returns, cents or prizes they get.
At times, it feels impossible to get the prizes.
At times, it feels irrelevant to win those rewards.
at times, it feels difficult to understand how they work.
At times, why would I even care to swipe my card?
THIS FRAMEWORK CAN HELP DESIGNERS TO PLAN LOYALTY PROGRAMS THAT STICK.
It has been built with elements from the best programs around, and based on videogames studies on challenge-reward systems that free dopamine in the brain. Yeah, it's dope!
Along the years, I came up with a framework that can create a mix of elements that, when put together, can generate quite strong hypotheses for positive customer behavior enforcement.
It's simple, but not too simple.
Note This canvas does not address the functionalities of your Marketing Automation Platform, nor the segmentation or the winning ideas. Those you can only learn experimenting and collecting data properly!
1/4 How to use triggers?
The main idea is to approach people (the end customer) according to their "calendar" needs. I have divided the calendar in layers: INSIDE-OUT, LIFE & CULTURE and CONSISTENCY TRIGGERS.
INSIDE-OUT are triggers that come from you. They are a break of protocol in design thinking, actually. People are not interested in them, but you have to live with them. For example, when shippings arrive or when you decide to make a big sale, or when a new hire at the office happens. There is a double work, here: to design actions that will make your trigger relevant to customers.
LIFE & CULTURE TRIGGERS are both general and personalised, depending on the data you have from customers. You will use common triggers like Christmas, Black Friday or Back to Work seasons to activate your triggers. But furthermore, there are personal trigger you may act upon, such as birthday, family members' birthdays, anniversaries, moving to a new place and so forth.
Thirdly, CONSISTENCY TRIGGERS are the lease thought of. They reward the consistency of interactions people have with the business. For example, a person's 10th purchase, the 10th consecutive week of purchase or a year since their first deal. Companies like Google or Facebook play with "the best times" and "friendversaries", so this is a similar way of exploring these events.
New winter arrive on the first weeks of the month
10th purchase with us
5 months with at least one purchase per month
Order Value above €50 in 5 past purchases
1 year anniversary
Strong wave of new orders, possible delays
2/4 Using TOKENS/INCENTIVES
Tokens, or incentives, are simply your prime matter with which you reward people. I have classified them into three main categories, so it can spark ideas on how to bring up more tokens.
MONETARY, SERVICE, PRODUCT INCENTIVES
The point of the categories, as well, is to make it easier to estimate which ones are more expensive, and which yield better returns.
For example, discount in different categories may help customers to try new behaviours. ("I may buy garden stuff from you, even though I used to buy only kitchenware here").
Over time, you may want to ditch expensive categories of tokens, and stick with the ones your customers respond the most to.
If you discover other categories, even better.
These examples of tokens come from Nordstrom, Sephora, GAP, Espresso House, H&M, McDonald’s, Harrod’s, The North Face, Amazon, Starbucks, REI, TOMS, Apple, CVS, Barnes & Noble, Target, Bloomingdale’s, Michael Kors, Marriot, Lululemon, Kohl’s, DSW, Tarte and more.
categories OF INCENTIVES help you to estimate costs of rewards, and get people to explore new behaviors.
One of the most important processes of reward systems is how they are distributed. That where the gaming soul of loyalty programs make it, or break it.
In order to be engaging, tokens must play "hard to get", and reach a denial-and-reward balance, in order to stay entertaining.
You may want to test and balance, from the beginning, with less expensive rewards up to the more premium ones.
Distribution is not only about time, but also about creating beneficial segmentations. A few rewards could be only accessible to Bronze, Silver and Platinum members.
A good question is: how will this relationship evolve, in order for people to keep interested in it? Season 1 cannot offer the same things as season 13!
For the lack of a better name, these are transversal elements that should be present in order to spice up and reinforce the traction of your system.
It comes from research in videogame industry, should to release dopamine in the brain of active players. That doesn't mean that your bonus card will release dopamine in the brain of your customers. But it does signal you are following a system that works according to our mental structure.
Elements are, on purpose, miscellaneous. They are an extra polish you may insert into the system to make the engines well oiled. You may checklist if they are in place at any point, and refresh, pick and mix in order to create change.
The entire secret of good loyalty systems is the tension between predictability and surprise.