Are loyalty programs loyal to users?

Late last week I went to a hypermarket to buy groceries. I had my two-year-old daughter with me and shopping with kids is… Oh God! Almost impossible I would say. The staff were very helpful and friendly. They entertained my little one and even pushed the shopping cart so that I could quickly get everything I wanted. (She was helping me out to find things as well). She herself pushed my cart to the billing section and said: “I will manage here”. I was extremely overwhelmed by the experience. I know it’s her job, but it feels really good when people help you and empathise with you. Finally, it was time to pay the bill and I gave my debit card. The boy at the counter asked me if I would like to opt for a loyalty card. Aren’t you happy when you get free stuff? Well, so am I. He asked me to fill up a form where you had name, DOB, phone number, wedding anniversary and kids’ birthdays (there was space for upto 3 kids). He explained that they would send us wishes for our birthdays and anniversaries along with gift vouchers to be availed in the next 3 days. Wow! #happyme

What are Loyalty Points? Do they really impact UX? 

Customer loyalty programs have become very popular over the past few years. It’s a marketing technique that encourages customers to continue purchasing their products/services. But aside from improvements to marketing and reputation these programs are quite beneficial to user experience. Loyalty programs are designed to give something back to customers for their loyalty, mostly by getting users hooked on the act of earning points to be redeemed. 

Let’s look at some notable examples:

AAdvantage

American Airlines has an excellent program called AAdvantage, where customers earn frequent flyer miles for a variety of purchases. 

Through the program they are essentially collecting information about their customers. Where they like to stay, what places they like to visit, where they’re willing to spend their own money and rewards points on. This can all be rolled back into their business for promotions and marketing.

Piece of the Pie Rewards

Earlier, Dominos had a  loyalty program, ‘PIECE of the PIE REWARDS’, which offered a free pizza after 6 orders. Chances are, you’ll be more likely to buy pizza from them just so you can get the free pizza.

Image result for piece of pie rewards us
Image result for piece of pie rewards us

One good element that makes these loyalty programs work is the transparency they provide.  All customers can clearly see their progress which allows users to set goals, and work towards achieving them. Believe it or not, this is the actual science behind this strategy, and it’s why people seem to love loyalty programs. They’re effectively competing or working towards something.

The clear takeaway is that most consumers join programs hoping to save money, or receive discounted products. Through these programs, customers are incentivized to make purchases and stay loyal to a brand. They love it because they’re getting something in return, while the businesses benefit as their customers continue to invest money in their business. It’s a win-win for customers and businesses.