This is a guest blog post by Clutch, a Demandware certified partner.
It’s not surprising in today’s discount-driven marketplace that most retail brands rely on cash-based incentives like discounts, coupons and specials to drive sales. After all, what motivates a buyer more than saving a few bucks?
However, discount-based incentives often diminish the very loyalty a brand is looking to achieve, and erode profit margins while devaluing a business in the eyes of consumer. Why? Because by attracting customers who are motivated largely by discounts rather than an exceptional brand experience, retailers may be missing an opportunity to appeal to and retain a more valuable customer.
That’s not to say your business should abandon cash-based discounts and rewards altogether. But savvy brands are now embracing rewards that go well beyond cash. For example, The Body Shop’s ‘Love Your Body’ program invites members to exclusive events and ‘sneak peeks’ to new products before they hit the market. Most companies have established elements within their business that can be leveraged to enrich the loyalty program member’s experience. These elements can often be repositioned or repackaged to provide valuable rewards to customers, driving experience, affinity and trust, loyalty and even evangelism – at minimal cost to the brand.
Retailers should consider incentives for loyal customers that may include the following:
Service-based: Rewards like complimentary gift-wrapping, personal shopping assistants or valet parking
Information-based: Special alerts for elements like new product introductions and previews or seasonal arrivals
Event-based: Exclusive invitation-only events like product pre-orders, shipment alerts or in-store events
Sample-based: Special product samples or service trials to give members a complimentary taste of your expanded offerings
Inclusion-based: Invitation-only inclusion to a customer council to provide feedback, opinions and insight on the brand
Brands that are adopting incentives beyond cash-based coupons and discounts are gaining significant advantages by not only preserving their margins, but also enhancing the experiences of their customers, and specifically members of their loyalty program. For example, these types of incentives, like event invitations, deliver brand-exclusivity to members, building affinity while driving in-store traffic from online users. Benefits like ‘sneak peeks’ can help boost awareness, interest and even preorders for newly introduced products to build immediate success. The Body Shop enjoys both of these benefits by providing these types experiences to their members.
By leveraging and repackaging established elements within their business model, these brands are able to deliver unique engagements that provide value and enrich the member experience.