“Earned value” refers to the points or benefits that a customer accrues based on their purchasing behavior or engagement with a brand’s loyalty program. It is a quantifiable measure of the value a customer has gained for interacting with a company.
Earned value can come in many forms, including points, cash back, and miles. Selecting the most appropriate form for a loyalty program can help boost audience reach and brand awareness.
For example, a loyalty program that already has brand reach in cryptocurrency communities can incorporate a cryptocurrency earned value into their program, thereby increasing daily trade volume, and promoting a healthy ecosystem.
Without a doubt, earned value is more than just a check mark on a loyalty program creation list: it can be a mutually beneficial relationship that reaches the appropriate audience through its own merits.
How Do You Find the Right Earned Value for Your Loyalty Program?
- Know your audience. Is there something of value that your audience already resonates with? Build upon market research and conduct surveys to gather feedback. Analyze the data to understand what value your customers are looking for.
- Set your goals and align them with your business objectives. Decide what you want from your loyalty program: whether it is customer data, brand awareness, or customer retention, and build your program on this data. Cash back is an attractive option – but it is not always the best choice for every business.
- Consider the several types of earned value. Points, miles, tier-based rewards, cash back, and discounts and vouchers are some of the most utilized earned values. They are selected by analyzing customer data and reviewing trends within industries – such as by creating hybrid travel/hotel programs that can mutually benefit from shared earned value systems.
- Create a lucrative reward redemption system. Allow customers to use their earned value to gain access to rewards, discounts, exclusive offers, or benefits. Make the process simple and accessible.
- Communicate the value system to your customers. Ensure that your customers understand how they can earn and redeem rewards. This makes the value clear to everyone involved.
The hybrid approach – combining multiple earned values into one program – is seen commonly in credit card companies and financial institutions. It is easy to see why: hybrid programs can appeal to many consumers and can open the door to partnerships with reputable brands.
Case Study: Amazon, Whole Foods, and Prime
Let us take a closer look at Amazon, a company that has created a wildly successful loyalty program with their own branded credit cards.
Amazon offers a percentage of cash back on purchases from their website and from Whole Foods stores. This incentivizes customers to purchase from Amazon and its companies, enabling new ecosystems such as the Whole Foods acquisition to grow and prosper from Amazon’s existing loyal customer base.
Customers who purchase goods and services using their Amazon card benefit from cash back or points that can be redeemed for a variety of benefits. This ecosystem of shopping and loyalty programs is all linked together, with more incentives being offered to more loyal members who partake in other Amazon programs, such as Amazon Prime.
Amazon’s loyalty program grows and scales with their company. But how can you apply the lessons from Amazon’s success to your own brand?
Not every company can be a worldwide behemoth such as Amazon: but that does not mean that there are not lessons to be learned from them.
Identify Your Customer Needs and Align Them with Your Goals
Once you understand your customers and your own business objectives, you can plan to scale for the future. Afterall – earned value is a measure of success. By tracking how it is earned and spent, brands can understand how their most loyal customers stay engaged, as well as identify areas for program improvement.
Selecting the right earned value also provides a baseline for personalization. The more data you get, the more you understand your customers, allowing you to personalize offers, rewards, and communications to enhance the overall customer experience. Having a strong understanding of which rewards drive the most engagement empowers a brand to build upon, or as in Amazon’s case, to branch out effectively.
The competitive advantage of a loyalty program with effective earned values is clear: the level of data and personalization can differentiate your brand from competitors. Earned value is not just a simple setting in your loyalty program: it is the core measure of a brand’s loyalty and engagement and a tool to optimize and drive customer satisfaction – increasing profitability and Customer Lifetime Value.
Choose your earned value wisely: it may hold the key to your brand’s future.
You May Also Like
These Related Stories