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A loyalty program without a set of communications to make it work is like having a beautiful tenor serenade an empty forest. Just as the quality of a tenor’s voice can be incredibly moving, a well-planned communications strategy will fuel your loyalty program.
There are seven Loyalty Campaigns that every loyalty program should include. Each campaign influences a specific type of behavioral response from program members. There is one psychological principle that is of paramount importance to each campaign’s success. Apply these principles and maximize customer lifetime value.
1. The Invitation
Your best customers are the model for the customers you want to attract. The persuasion strategy to use here is “Liking”.In behavioral terms, liking is the demonstrated principle that we are strongly influenced by things and people we like. Attractiveness, familiarity, similarity and positivity are all factors that contribute to liking. In your Invitation campaign, demonstrate that other members are happy with your program; better yet, show that those people are also similar to your target audience.
2. The Welcome
The best Welcome campaigns use a nurturing series of communications to make sure new members become familiar with seeing your name in their inbox.
Once you have your members’ attention, showing “Reciprocity” can be a powerful force for strengthening their commitment. The Reciprocity principle is the idea that people are bound by an overpowering anthropological obligation to return a positive gesture with another positive gesture of equal or greater measure.
In the Welcome campaign, you can demonstrate your appreciation for members’ joining your program by offering additional currency, discounts or other benefits and at the same time, you can ask your members to take further action to engage with your program such as downloading a mobile app or sharing your program on social media. Reciprocity is a powerful and continual cycle of give and take benefiting you and your members.
3. The Statement
The Statement, often referred to as a newsletter, is a regular communication with your member. The purpose of the Statement is to make a regular and predictable appearance so that your brand becomes a part of your member’s routine.
The one strategy to harness in this campaign is your member’s initial “Commitment” to your program. When people make a commitment, they do not feel comfortable breaking it. Consistency is a virtue - a demonstration of character. You can further entrench your members’ commitment to your program by highlighting their achievements in your newsletter.
4. The Motivator
You want more than just a member. You want an engaged member.
The goal of a Motivator campaign is to make sure that your members are getting the most out of their membership and that you are getting the most out of them as members. There is one psychological principle that is guaranteed to have a motivational impact on your member. “Scarcity,” the limited availability of a product or service, drives desire. You can use Scarcity by limiting the time for members to redeem or earn currency motivating your members to remain engaged.
5. The Celebration
The Celebration is the campaign where you have the opportunity to highlight the most rewarding and positive emotional payoff of a loyalty program. In this campaign, the “Peak-End Rule” comes to life. The Peak-End Rule means that the end or peak of an experience carries more weight when we evaluate that experience than when we evaluate the experience as a whole.
Use the “Peak-End” rule in your Celebration campaign to enhance the experience for your members and encourage them to recall your program with happiness.
6. The Referral
The Referral is the campaign that reflects a member’s ultimate expression of loyalty. If he is willing to recommend your program, he is proclaiming to his network that he is a fan – providing a stronger and more persuasive endorsement than any paid advertisement or marketing message could deliver.
“Social Proof” plays a defining role – demonstrating that others are enjoying the benefits of your program. At the heart of the concept of Social Proof is the idea that the more people who are doing something, the stronger the pull for others to do the same – it is the bandwagon effect.
In the Referral campaign, actively solicit members to endorse your program so that they are launching their own Invitation campaigns inspiring friends, family and acquaintances to get on the bandwagon and join your program.
7. The Win-Back
What can you do when a member has stopped interacting with your program? Here is where the Win-Back campaign comes to the rescue. You can use a series of emails, perhaps three, spaced respectfully apart. The most impactful psychological principle you can use in your Win-Back campaign is “Loss Aversion.” This concept recognizes that people feel the impact of losing something they have more than gaining something of equal value
People in your program have membership that gives them certain privileges and benefits, including, in many cases, an accumulated balance of points or other loyalty currency. In your Win-Back campaign, you want to remind them of those benefits and let them know that they will lose them if they don’t continue to engage in your program.
Communication with your members is the oxygen that gives life and momentum to your program. Applying these principles of human decision making to your campaigns can not only improve your engagement amongst your existing membership but grow your membership as well.
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