Customer reward programs have been around for a long time, and the proliferation of mobile apps has made loyalty programs even more ubiquitous. Shoppers are overly familiar with traditional rewards programs such as cash back, discount coupons, or a free item after a set number of purchases. For loyalty marketing programs to remain effective, businesses must engage their customers in new, more personal ways. Providing your returning customers with experiential rewards can boost brand loyalty and satisfaction.
What Are Experiential Rewards?
Before you can add experiential rewards to your customer loyalty program, you need to understand what they are. Experiential rewards represent a shift away from transactional rewards. For example, instead of providing discounts or complimentary products, businesses present users with a unique experience. Experiential rewards can take many forms, such as live events, exclusive access to events or products, personalized items, or special outings. These types of rewards transform the relationship between customers and businesses. Companies that provide experiential rewards offer their customers more than products or cash savings. They provide memorable moments that go beyond an economic transaction.
Facts and Stats About Rewards Programs for Businesses
Perhaps the concept of experiential rewards sounds interesting to you, but you need proof of effectiveness before reevaluating your current customer loyalty marketing campaigns.
- Companies are increasingly embracing the value of experiential rewards. A 2019 study by Gartner found that the percent of loyalty programs offering experiential rewards increased from 61% to 78% in a single year. If you aren’t using experiential rewards, you’re behind the curve.
- Customers value experiences over material goods. For instance, 78% of millennials say they would rather spend money on an experience than a product, and 72% said they would like to increase their spending on experiences over the next year. Adding experiential rewards to your business’ reward program could be particularly beneficial if you have a younger customer base.
- Millennials aren’t the only demographic that places a premium on experiences. The share of consumer spending on live experiences as a percent of total U.S. spending has increased 70% since 1987. To make your loyalty card programs more successful, give people what they want. Right now, consumers are craving live events.
- Experiences can be more memorable than the short-time joy from material rewards.
- Loyal customers spend more money, and may shop with you more often.
Benefits of Experiential Rewards
The advantage of experiential rewards is that they improve the overall shopping experience. Increasing customer satisfaction through more effective reward programs boosts loyalty, which inspires retention and lifetime value. Supplementing traditional transactional reward programs with experiential reward offerings provides several benefits.
Experiential Rewards Are More Personal
Money back and discounts are classic features of loyalty programs. The value is easy for customers to see and encourages some to spend more to rack up rewards quicker, but it doesn’t make them feel special. These simple transactional rewards don’t show any care or consideration for what makes the customer unique. Experiential prizes like personalized products or tickets to live events or activities tailored to the user’s interests clearly communicate how valuable the customer is and nurture mutual appreciation.
Experiential Rewards Are a Social Experience
The ability to enjoy loyalty rewards with others makes them more meaningful than saving money. A live activity, whether it’s access to an exclusive product demo or tickets to a sporting event, allows your customers to share the excitement with friends or other enthusiastic promoters of your products and services. The social element elevates mundane rewards to memorable events. These bonuses will stand out more when customers reflect on their relationship with your business.
Experiential Rewards Provide More Choices
Experiential rewards don’t have to replace your existing loyalty marketing program. Presenting new options alongside traditional ones lets customers choose the bonuses that are most relevant to them. A broader selection of choices increases reward programs’ value. Customers who appreciate this versatility are more likely to use the program longer and more frequently.
Why Should Your Business’ Loyalty Program Include Experiential Rewards?
Loyalty marketing is an outstanding tool for encouraging customers to actively seek your products. Customers spend more on brands they feel a connection to, and loyalty programs make them more likely to continue doing business with a company. Loyalty marketing can even help you reach new members. In one survey, 73% of consumers said they are likely to recommend brands with excellent loyalty programs. Accomplishing this goal is easier said than done. Most customers are active in fewer than half the loyalty programs they belong to. Fortunately, experiential rewards can dramatically improve your customer rewards program’s effectiveness.
Experiential Rewards Are Harder to Replicate
The best reward programs are unique. Customers will talk more about companies that stand out from the crowd. Anyone can offer discounts or free merchandise. Leveraging experiential rewards will differentiate your loyalty program from competitors through exclusive offerings.
Experiential Rewards Create Longer-Lasting Client Impressions
Loyalty programs are a powerful marketing tool when implemented correctly. Like other marketing efforts, one of the primary goals is to make a lasting impression. People rarely recall when they used their accrued loyalty points to get $20 off their next purchase, but they’ll remember attending an exclusive new product announcement for their favorite brand or the time they won a mountain climbing adventure for themselves and their best friends. In addition to being more memorable, rewards that provide experiences such as these, fill customers with anticipation, encouraging them to work toward earning more reward points.
Experiential Rewards Are Shareable
Social experiences benefit your business and your customers alike. Pleasing a customer through a loyalty reward helps your business maintain customers. When people enjoy their loyalty rewards and tell others about it in person or online, that attracts potential new customers, and can be a massive marketing win.
Effortlessly Build and Issue Loyalty Cards With Hydrogen
Hydrogen is an embedded finance platform that enables organizations to quickly build financial solutions from a single platform. We take all the hard work out of creating a loyalty card program. Our robust no-code editor and APIs make our platform accessible for any business. Let us provide your company with the tools you need to build custom cardholder rewards and loyalty programs. Tailor your reward system to fit your business’ needs with multiple control criteria to choose from. Sign up with us today!