How the right technology choice can help your member loyalty scheme to stand out and succeed

Thanks to popularisation by supermarket chains and online retailers, the loyalty scheme is a well-recognised tool for customers to take advantage of their relationship with a particular provider. More than 90 percent of companies operate a customer engagement or loyalty program[1] and these take a number of forms. Simple schemes with an email or SMS sign-up are popular and provide an easy way to receive coupons or news of flash sales. More involved programmes with the opportunity to build points provide a more extended benefit.

But what advantage do loyalty schemes have for not-for-profit and membership organisations? And how can the correct choice of technology help to maximise member engagement and drive revenue?

Primarily, the concept of member loyalty has a tangible financial value to a membership organisation. Loyalty is the reason that a member will choose similar one event or training course ahead of another. It’s the reason that referrals and word-of-mouth recommendations are made and in difficult economic periods, at an explanation why one membership is retained when another is allowed to lapse. It is also well accepted that the cost of acquiring a new customer can be as much as five times higher than the cost of retaining an existing one[2].

This is true of all loyalty programmes and the benefit continues for as long as the scheme offers real, differentiating value. But this is comparative and with so many competing schemes, the race to offer more in return for signing up is accelerating. As loyalty schemes become more expensive to offer, it’s vital that organisations also increase the value they can extract from them. Here, an organisation’s choice of technology can provide several additional benefits.

By signing up to a loyalty scheme, a member is telegraphing their willingness to hear from an organisation more regularly. This creates an opportunity to offer more value, more often, with less risk of over-stretching this relationship. As always, the key word is “value” and so initiatives such as member-only deals, and exclusive offers are particularly effective here. Even with price reductions, members of loyalty schemes are estimated to spend up to 18% more per year than other customers[3] so the more that can be offered, the better.

The right technology can use loyalty schemes to greatly increase an organisation’s understanding of its members. With more communication comes more dialogue and, combined with any additional data that is requested as part of the loyalty signup, this can greatly improve the accuracy with which future communications can be segmented and targeted. This is a major driver of member engagement as it drives a far more personal relationship where the member feels heard and individually cared-for by even the largest organisation.

The benefit can double if the technology fully integrates its data systems and joins up internal processes in an intelligent way. Here, the same information can also inform the way that the organisation optimises online user journeys. The processes involved in membership renewals, loyalty card replacements, scheme benefit updates or in new members joining from a loyalty member’s referral can all be tailored to offer the maximum benefit to each user persona.

Perhaps the most important impact of technology choice is on the way that loyalty benefits are appreciated by members. With more organisations offering similar schemes every day, the opportunity any one scheme has to surprise and delight its members is falling exponentially. However, this trend can be reversed if the scheme’s benefits are offered via an improved customer experience.

Studies show that when personalisation is done well, membership scheme satisfaction can increase more than six-fold. And when gamification is incorporated via membership tiers or status badges, members enjoy participating almost twice as much[4]. Achieving these satisfaction improvements requires a highly integrated and adaptable technology solution that is intuitive and pleasurable for members to use.

Member loyalty schemes have the capacity to drive member retention, accelerate the acquisition of new members and increase the revenue from each interaction either has with their organisation. But these schemes operate in a highly competitive environment, so all successes come at an ever-growing cost. The right choice of technology can maximise the effectiveness of each scheme, increase the value and satisfaction that its benefits provide and deliver the optimum return on investment for the organisation that offers them.