When it comes to CPG loyalty programs, you would normally think “the more the merrier,” right? In this case, the opposite is true. Think about the number of brands and retailers consumers frequently shop with. If they all have individual loyalty programs, each with its own set of unique features—such as rewards structure, app, and login—it can become very cumbersome to manage and keep track of them all, leaving consumers to abandon those that do not provide them with enough value. This is a phenomenon known as loyalty fatigue.
In order for your loyalty program to compete and “make the cut,” it will need to be easy-to-use, rewarding, and supply users with an incentive to keep coming back for more.
The Best CPG Loyalty Programs Focus on Retention
The average American consumer is a member of 30 reward programs. However, 54% of their members are inactive.
The trouble with many CPG loyalty programs is that they’re focused more on acquisition than retention. Rewards are designed to appeal to wide audiences, but they fail to sustain members for usually one or more reasons:
- Confusing redemption process
- Bombardment of irrelevant marketing messages
- Lackluster benefits that too closely mirror a competitor’s program
However, with the wide selection of tools, technology, and resources available, there are many opportunities for brands to optimize and enhance their CPG loyalty programs, thereby regaining and maintaining consumers’ intrigue.
How can you overcome the clutter to regain competitive advantage and be that one indispensable program people can’t help but remain active on?
Top Ways to Overcome Customer Fatigue with CPG Loyalty Programs
Combating customer fatigue isn’t complicated; there are simple optimization strategies brands can implement to augment their loyalty program:
Adopt Modern Practices and Technology.
In older loyalty programs, consumers typically needed to produce a physical loyalty card in order to participate, see their rewards bank, or access account information, but these practices are considered outdated. Loyalty cards are quickly being replaced by smartphone apps and wearable technology integrated with Google Pay and Apple Pay. With loyalty program mobile apps, all program information is stored in one, easy-to-access location, almost guaranteeing a user’s ability to participate. If a brand doesn’t have their own loyalty app, they can easily partner with a popular mobile rewards shopping app that already has a substantial user base, like Shopkick.
Users can check the Shopkick app to see which brands or retailers offer “kicks” (rewards points) for engaging with them, whether that be watching a branded video, browsing through a curated lookbook, scanning the barcode of a promoted item, or making a purchase. Because Shopkick features incentives from a large pool of retailers and brands, users no longer need to manage multiple CPG loyalty program apps per brand; they can consolidate and streamline all of their rewards activities within Shopkick’s one easy-to-use app. Even so, Shopkick can be used in conjunction with retail- or brand-specific apps, making it that much easier for shoppers to earn rewards. Given the many ways Shopkickers can accumulate kicks, they typically generate a substantial amount fast. Once enough kicks are accumulated, users can redeem them for a gift card of their choosing, reinforcing a positive affinity and loyalty for the brands and retailers that awarded them.
Incorporate Geo-Location Techniques.
More than 80% of smartphone users consult their phones before making an in-store purchase. Shoppers often look up prices, reviews, competitor comparisons, search inventory, or seek out deals. Given this common consumer behavior among today’s shoppers, the incorporation of proximity marketing will give loyalty apps a distinct edge over the competition. Beacon technology can enable apps to help guide shoppers to a particular product in-store. Product scan-triggered videos can provide in-depth details on an item shoppers are considering. Location-triggered recipe suggestions and lookbooks can provide shoppers with timely inspiration. If a loyalty program can provide not only rewards, but also product information, shoppers will feel compelled to keep using the app and will assign it a much higher value than before. They will feel more loyal to brands that provide personalized and relevant guidance, as opposed to brands that leave shoppers to “fend for themselves.”
Send Reward Benefit Reminders.
We all have a lot on our minds these days. Most people want to redeem their rewards, but they’re just not thinking about it. A simple text or email reminder to alert a customer that rewards are waiting is often enough to boost membership participation and increase spending. You can also remind shoppers of promotions, higher reward tiers, and exclusive sales. Sephora, Amazon, and Starbucks are examples of best-in-class reward programs that also regularly communicate with members about their loyalty benefits.
Offer More Opportunities for Rewards and Value.
Consumers want to feel valued, surprised, and sometimes instantly rewarded for their loyalty. In fact, 63% of CPG brand loyalty members say they want “instant rewards.” That’s why Shopkickers earn kicks just for walking into a partner store. They can choose to earn bonus kicks by scanning product barcodes, watching videos, and more. Of course, making a purchase earns the most rewards. Yet, Shopkick offers rewards that aren’t solely tied to the act of purchasing, casting an even wider net and getting more consumers actively involved with the reward app—a strategy that has been largely successful. For instance, one leading yogurt brand partnered with Shopkick and saw a 24% purchase conversion rate once shoppers physically engaged with their product in-aisle.
Create an Admirable Brand Image and Culture.
In 2020, the drivers of consumer loyalty have become much more complex compared to previous years. Shoppers are looking to give their loyalty to brands that understand modern concerns and share the same values. Past drivers of loyalty may have included: fair pricing, good customer service and return policies, reputation, and rewards. Today—in addition to past concerns—consumers are worried about safety, the quality of ingredients, corporate values, personalization, and convenience. This puts a spotlight on brands, creating accountability for their corporate culture, mission, messaging, partnerships, and overall value proposition. As Robert Passikoff, President of Brand Keys research firm, put it: shoppers are assessing loyalty “relative to how they envision an ‘ideal’ brand.”
Loyalty programs that reflect and align with your brand image and culture will be sure to keep loyal customers engaged.
Keep CPG Loyalty Programs Fresh, Current, and Exciting with Shopkick
Whether CPG brands decide to run an in-house loyalty program or not, a partnership with Shopkick could substantially augment the program and shopper experience. Brands can appeal to a wider audience, leading to a larger percentage of market share gained.
Engagement is already high among Shopkickers, with the average user spending over 1.5 hours per month in-app.
The combination of instant and earned rewards, plus the innovative interactive shopping experience, keep Shopkickers coming back for more, leading to much less loyalty fatigue.
The ability for CPG loyalty programs to overcome loyalty fatigue lies within an innovative partnership. Read our success stories and contact Shopkick to get started on your first mobile rewards campaign.
Image courtesy of Rawpixel.com