10 Best Rewards To Increase Customer Engagement

Keeping customers engaged with your rewards program can be tough.  In order to keep them interested, your customers need to be constantly reminded of your program’s benefits. Otherwise, they might forget why they joined the first place, potentially costing you business and having a negative effect on your bottom line.

Thankfully, you can make sure customers are interested in your rewards program by keeping your rewards program fresh, exciting, and relevant with exciting new offerings.When you continuously update your points program with new rewards and perks, your customers will want to stay tuned in order to avoid missing out on any new benefits or limited-time perks.

So how can you do this with your own brand?  We’ve collected ten of our favorite types of rewards to get you inspired.

1. Send a Personalized Free Gift

It’s no secret that people love free stuff. Whether you send them some branded swag or an accessory for their latest purchase, customers are sure to appreciate a little something extra. That being said, giving away free gifts without considering your customers’ preferences or the context of their shopping experience presents a missed opportunity for fully engaging with your customers.

The key is to know your audience and gift accordingly. If you want to make customers feel really special, personalize the gift in any way you can. This could mean segmenting your customers based on product preferences and sending gifts to each group accordingly. Alternatively, try sending a personal thank you note along with the free gift. Customers will appreciate the personal touch, strengthening their desire to engage with your program.

2. Spice Up Product Discounts With Creative Currency

Product discounts are one of the most common rewards customers can receive. Offered as a percentage or dollar amount off of a purchase, product discounts are the most sought after reward among North American consumers, with 51% naming it as a top reward.

Promising a customer savings on their next transaction is a simple way to encourage repeat purchases. Once a customer makes their first purchase and  earns points towards a discount, they’ll be less likely to leave your brand for a competitor because the promise of discounts in the future creates a powerful switching cost. 

Monetary rewards continue to be the most sought after rewards, with free gifts, discounts, and free shipping also among the most valuable.

While discounts might seem like an obvious reward to offer, you can turn them into an outstanding customer experience by choosing a creative name for your currency. This small touch will make your program more memorable, personalized, and professional.

3. Launch a VIP Program to Reward Your Most Loyal Customers

VIP rewards programs can take your traditional points program to a whole other level—literally! With VIP tiers,  your customers can progress to higher levels by doing things like spending more money, purchasing certain products, or earning more points in order to unlock additional benefits.

At Smile.io, we recommend offering points for things like sharing on social media, reviewing products, and referring friends. As customers strive to get to the next level in your VIP program, they’ll end up engaging with every aspect of your store to earn points.

VIP programs work so well because they tap into our natural human psyche in a number of different ways. Shoppers will work to reach a higher tier not only for the additional benefits, but also to show that they are of higher status than their peers. Known as the Local Ladder Effect, studies show that many people have the natural inclination to compare themselves to others, and to seek higher status in order to appear superior. Participating in a VIP program presents consumers with the perfect opportunity to battle it out and see who is the most dedicated to your brand.  It’s this desire to be the best that will keep customers engaging with your brand time after time.

4. Exclusive VIP Member Discounts Are Always Rewarding

While free gifts and product discounts are a great way to drive repeat purchases, you should also consider ways to make your rewards program more rewarding at every stage of your customer experience. That’s where exclusive member discounts come into play!

If you’re running a VIP program, consider offering a blanket discount to all program members, such as 10% off all products. This is a great way to attract new members, and will function to make your rewards program feel more exclusive. From here, make your program more valuable by offering better benefits to members of the higher tiers.  This could include an increased percentage off each purchase, more points earned per purchase, or free gifts.

No matter how you choose to do it, offering better perks at each successive level of your VIP program will have customers returning to your store to make purchases more often.  This behavior will directly feed your program engagement rates, keeping your customers happy and your rewards program thriving.

5. Make Free Shipping the Standard

According to Statista, 54% of shoppers will abandon their shopping cart if shipping is too expensive, making it the leading cause for lost customers at checkout for 2017. At a time where more and more consumers are turning to the internet to do their shopping, free shipping is quickly becoming not only a desired benefit but also an expectation. With giant competitors like Amazon and Walmart offering free shipping on most orders, this perk is quickly becoming one of the most important benefits to offer customers.

Expensive shipping and unclear shipping information are among the top reasons customers abandon their shopping carts online.

Since it is such a sought after benefit, free shipping can be leveraged in many ways to drive customer engagement with your rewards program. If you can bear the cost, make free shipping an exclusive member benefit to encourage more customers to join your program. If this type of perk is outside your current budget,  offer it to members who spend over a certain amount to help you bear the cost.

If you want to make free shipping a truly special benefit, launch a VIP rewards program and only offer free shipping to rewards program members in the higher tiers. If you’re unfamiliar with VIP programs, don’t worry!  We’re going to explore their benefits in the next section.

6. Use a Bonus Points Event To Combat Seasonal Dips

With the Christmas rush hot on our heels, most ecommerce retailers are rushing to get organized in order to make a killing this season. It’s the most wonderful time of year for both customers and retailers, but what are we to do once the new year hits and consumer spending (and, as a result, program engagement) slows?

One way to tackle the dip in customer engagement after the holidays is with bonus points events. If you’re wondering what a bonus points event is, it’s as simple as it sounds: an event or fixed time period where customers can earn additional points when they purchase products, or simply get more out of the points they’ve already earned!

The idea of scarcity is what makes bonus points events so effective in driving customer engagement. The principle states that the perceived benefit of a product, service, or event will appear to be more valuable if faced with a time or quantity constraint. This makes special occasions like company milestones or celebrates the perfect times to launch bonus points campaigns. This way, the event can work to re-engage customers while simultaneously showing your loyal customers your appreciation their commitment to your brand.

7. Use Free Points to Kickstart New Product Releases

Not to be confused with bonus points events, free points are simply given to customers to top up their points balance.  Typically offered for a limited time, these free points can provide that much needed bump for your store at the beginning of high-spending periods. For example, if you sell clothes you should consider topping up your customers’ points balances when you launch your new seasonal collection.  This will drum up demand and remind inactive customers of the benefits of your program.

Gap Inc. practices this with their own rewards program. Members who reach the Silver tier of the Gap Rewards Program are awarded free points at the beginning of every quarter. This amount is different for every customer, as Gap has chosen to reward each member a bonus 20% of the points the customer earned in the previous quarter.

As you can see, the free points method works in two ways: it incentivizes customers to shop seasonally while also encouraging customers to spend more in order to take advantage of the free points they’ve received.  Talk about incentive to shop!.

8. Create a Memorable Birthday Experience

We’ve all received generic birthday emails from retailers we shop with.  While it’s a nice touch, it’s not memorable, and between all of the other messages we already receive these “happy birthday” messages become simply another drop in the bucket. The truly memorable moments come from those closest to us, in meaningful, tangible, and personalized acts of generosity.

With this in mind, you can create truly impactful engagement on a customer’s birthday by rewarding them with something of value like a free gift or points.

9. Encourage More Brand Advocates With a Referral Program

While a referral program is often seen as a tool for growth, it can actually do wonders for your store’s customer engagement. The beauty of referral programs is that they encourage consumers to engage with your brand in two very distinct ways: as a customer and as an advocate.

The real power of referrals is that they come from a trusted source. Whether it’s a close friend, coworker, or family member, chances are you’ll know the person sending you a referral link and value their opinion of a brand as a result. Clearly, this type of reward benefits greatly from social proof—a psychological principle that states individuals are more likely to carry out an action if they know others have done it before, or will do it in the future. If you are referred to a company by a friend you admire, you will certainly give that recommendation more weight than that from a total stranger.

10. Give Back With Charitable Rewards

Sometimes customers aren’t seeking any monetary or experiential benefit from a rewards program—they simply want to make a difference. Allowing consumers to donate their points to charitable causes will allow you to drive customer engagement while simultaneously contributing to making the world a better place.Many airlines, for example, support the American Cancer Society by allowing customers to donate their rewards miles to patient families that need to travel long distances for medical services.

If your primary demographic is Generation Z, offering charitable rewards is a no-brainer. This generational cohort is seen to be more actively involved in charitable causes than any other age group, and will seek out brands that give back to the community. Nevertheless, whether your customers are young or old, rich or poor, there is really no downside to offering charitable rewards.  By aligning yourself with a charity that has a strong reputation and values that align with yours, you open your brand experience beyond the walls (or pages) of your stores, included your customers in an act of good that’s both rewarding and, you guessed it, engaging.

Engagement Begins and Ends With the Customer

As I hope this list shows, engaging your customers with your rewards program isn’t impossible but it does take some strategic thinking. While I don’t expect you to go out and implement every single one of these options, I do want you to reflect on your existing rewards mix and explore how you can build stronger customer relationships in order to increase engagement.

At the end of the day, keeping customers interested in your rewards program comes down to understanding what drives their actions, and delivering rewarding experiences that do just that. Once you’ve identified how to do that, you’re off to the races.