In a recent article by Zsuzsa Kecsmar, the Chief Strategy Officer of Antavo Loyalty Cloud, she discusses the importance of addressing unclaimed loyalty rewards as a red flag for potential customer disengagement. While companies may view unclaimed rewards as a positive for their bottom line, Kecsmar argues that it is actually a reflection of a lack of engagement, boredom, or waning customer loyalty. To combat this issue, Kecsmar offers insights into the redemption process, key metrics to monitor, and strategies to encourage loyalty members to use their points.
Kecsmar emphasizes the difference between claiming and redeeming a reward within a loyalty program. Claiming a reward simply means acquiring it through a specific action, while redeeming the reward involves actually using it. By understanding this distinction, companies can better evaluate their loyalty program’s effectiveness and customer engagement levels. Kecsmar outlines a three-stage process for rewards, from receiving an offer to claiming and finally redeeming the reward.
To assess the health of a loyalty program economy, Kecsmar suggests analyzing key metrics related to reward redemption. These metrics include the redemption rate, frequency of redemptions, ratio of claimed to redeemed rewards, and the popularity of different reward types. These insights can help companies gauge customer satisfaction, retention, and overall program success. Kecsmar notes that the average redemption rate is 49.8%, with lower numbers indicating a higher risk of customer churn.
Low redemption rates can signal disengagement among loyalty members and pose a challenge for companies. Kecsmar identifies several reasons for low redemption rates, such as unattractive rewards, high point costs, lack of personalization, and expiration date issues. To address these issues and encourage members to spend their points, Kecsmar recommends strategies like offering auction experiences, charitable rewards, and sending frequent reminders to redeem points. By creating enticing rewards and reminding customers to use their points, companies can foster loyalty and retention.
In conclusion, Kecsmar stresses the importance of valuing customers by providing fair and appealing rewards for their loyalty points. By implementing a reward system that incorporates experiential rewards, personalized offers, and timely reminders, companies can enhance customer engagement and satisfaction. Ultimately, encouraging loyalty program members to redeem their points can lead to stronger customer relationships, increased loyalty, and higher program success.
