Use more than bonuses and discounts to reward your customers

My two main points in this article are:

1. It is perfectly possible to run an effective customer club entirely without customers earning bonus points or discounts through a fixed model communicated to them in advance.

2. The lower your customers' purchase frequency, the more important it is to work with reward forms other than bonus points and discounts.

Here are some examples of ways you can reward your customers:

• Events or experiences only for members of your loyalty programme – either for all members, only for paying customers, or for those who have reached a particular status.

• Events anyone can attend for a fee, but where members get in free or at a discount.

• Competitions, quizzes and games for members only – where the prizes can be anything from products to tickets for events.

• Special benefits such as extended warranty, extended customer service, VIP lounge access, free parking or similar.

• Free or cheap merchandise and gimmicks – keyrings with a trolley coin, t-shirts, caps, mouse mats or anything else suited to your audience.

If you work with events, both small and large ones can be relevant. The most important thing is that they fit well with your brand – and ideally give your customers a chance to meet your staff and get a feel for the company's personality.

Another big advantage of these reward forms is that they give you something other than products and prices to communicate about.

It creates engagement among both customers and prospects when not all communication is about selling. And if you use events and competitions wisely, they can still increase familiarity with the whole company – including products and services.

Three concrete examples of companies using other reward forms:

HiFi Klubben

Right at sign-up they offer reward forms other than discounts:

• One extra year of warranty (3 years instead of the statutory 2)

• Inspiring events

• Great competitions

They regularly invite people to events in their shops – members only. We do not work for HiFi Klubben, but my impression is that the places at their events get booked quickly.

Normal

There are no fixed benefits to signing up for Normal's newsletter or app. The reward is that every week you can play games and enter competitions.

There are plenty of prizes, on the other hand – and when you win, the prize has to be collected in a physical shop.

Small Danish Hotels

Small Danish Hotels is a voluntary chain of 70 individually owned hotels. They run the Benefits guest club, where members earn bonus points on purchases of stays.

But: most sign-ups come via a simple competition, where each month a winner is drawn for a stay worth 1,500 kroner.

The same competition is used in pop-ups on the website and in lead ads – and it works!

Use purchase data to strengthen the relationship.

One of the biggest advantages of a customer club is that you get to see and analyse who buys what from you – provided customers have consented to you using their data.

Even so, I often see companies using purchase data solely for general sales analysis. That is of course useful – but it is not enough if you want to strengthen your relationship with the individual customer.

Here are three simple ways you can use purchase data more purposefully:

• Do not send offers on products the customer has just bought – in your ads either.

• Recommend relevant add-on products the customer has not yet bought but could benefit from.

• Adapt the frequency of your mails after a purchase – perhaps the customer needs a break, perhaps not.

Loyalty is not only about points and discounts. It is about relevance, timing and experience. And here your data and your creativity are the most important tools.