Avoiding a Loyalty Rewards Event Failure
According to research conducted by Colloquy, there are 3.3 billion loyalty program memberships in the U.S – an average of 29 per household. The increasing number of incentive offerings from organizations has spurred a competition in retaining customer’s loyalty and engagement. Brands are reworking generic programs that reward customers for mainly transactions, to offering loyal members a more unique and fully integrated experience.
Exclusive promotions, selective pricing, higher quality product offerings and unique reward events are just some of the experience-based initiatives that are now being incorporated into loyalty programs. Driving a great customer experience through a loyalty program is highly valuable for organizations to increase retention and lure valuable consumers away from competitors. However, when coordinating customer experience strategies, execution is key for success. Poorly planned experiential events and promotions can potentially jeopardize the reputation of a company.
For example in August, renowned beauty retailer, Sephora suffered a social media backlash from angry customers after its Epic Rewards Day lamentably failed. Sephora’s promotion offered luxe prizes such as a trip to Paris, $500 worth of makeup, complimentary training sessions at the brands beauty academy and gift baskets including products from top beauty brands like Bobbi Brown, Drybar and Bumble + Bumble. What Sephora did not take in account was how many customers would be partaking in the promotion. Within only a matter of minutes, the available rewards from the promotion were completely sold out, leaving an abundance of discouraged customers.
Frustrated loyalty members went to their social media accounts, posting a number of negative comments regarding their bad customer experience with Sephora’s poorly planned event. Within a week, news spread to a majority of media publications from E! Online and Refinery29 to Seventeen.com.
After Sephora sent out a public apology, one customer posted on Sephora’s forum hoping to rally fellow loyalty program members to return all items they purchased prior to the event. According to Consumerist, several customers did return the merchandise. Customers sent their return receipts to Consumerist, generating at total of $3,142. While this did not finanically affect Sephora, it created a bad experience that publically denounced the brand, causing it to lose valuable customers.
However, Sephora is not the only big-name brand that felt the heat this year after a poorly executed promotional event for loyalty members. Top companies such as Amazon Prime and Bloomingdales were also scolded by its loyal customers after not meeting their expectations for a memorable and unique experience.
While customer experience continues to become a major trend in the incentive and loyalty industry, it is important to understand how to create an event that truly meets your loyalty members’ desires and expectations. Rymax Marketing Services incomparable success in creating customizable and personalized redemption events, R-S.I.T.E (Rymax’s Strategic Interactive Themed Events) has lead us to become an industry leader, as well as the most innovative loyalty provider in the incentive channel.
Paul Gordon, Senior Vice President of Sales at Rymax states, “Reward events that offer trending merchandise based on the demographic profiles of the attendees and matches seasonal trends, do significantly well. Reward and promotional events are not about the company hosting it, but about the customers experiencing it. It is vital to offer rewards that are easily attainable and desirable, ensuring the customer will be leaving happy and satisfied.”
To assist in ensuring your execution of a rewards event does not epically fail like Sephora’s, Bill Schafer, Rymax’s Northeast Territory Manager of Solution Sales, suggests following these four tips:
- Segment your audience by demographic: Reward gifts should match the generational differences of your audience, providing products that meet everyone’s expectations. These products are in fact rewards, earned by loyal customers and/or employees. Therefore, rewards should reflect the understanding you have about your audience. Offering products that meet their interests shows you are attentive to what your audience wants and expresses your appreciation; which will assist in retaining their loyalty.
- Promote the event appropriately: After deciding which loyalty members have earned an invite to the event, proper planning is necessary in order for the event to be successful. This process includes:
- Choosing an appropriate quantity of knowledgeable staff members to assist guests and ease crowd control.
- Develop an easy process for guests to obtain their earned reward gift(s).
- Selecting a suitable quantity of products on hand that covers the amount of guests on your invite list. This creates a stress-free and positive environment.
- To put this in perspective; if you are executing a rewards event for 1,000 loyalty members, budgeting for and assuming only 30 members of the program will show up can cause dissatisfaction and negative feelings towards a company, leading to a decrease in loyalty. If planned correctly, reward events are a great way to promote an added positive experience with a company with which a member already enjoys.
- Provide a simple checkout experience: As the needs of each event varies, we (Rymax) create a redemption system that is efficient for the event at hand. The important part is preplanning and testing out the redemption system in advance. This pinpoints any possible challenges that could arise during the event.
- Listen to your audience: Every event we plan at Rymax is different because every client is different. The key to planning a successful event, is about listening to your client’s needs and expectations. Understanding what their end goal is and then shaping that event appropriately around those common goals, keeps members loyal.Contact us today to find out more information about Rymax’s reward events, R-S.I.T.E (Rymax’s Strategic Interactive Themed Events).