Why expiring loyalty points and rewards is important
It’s Friday, you’ve just got home from work and you’ve gone to the effort to bring home your favourite bottle of wine.
It’s pricey, but you’ve worked hard this week to earn that glass, you deserve it.
You open the bottle, have a glass, then put the bottle back.
The next day rolls around, and you realise you can’t just let that expensive bottle of wine expire!
You’ve got a choice to make.
Do you drink it? Or do you leave the bottle to spoil?
The value of something – like that bottle of wine, is only discovered when you feel like you’re going to miss out (FOMO).
That’s why it’s crucial to expire your loyalty points and rewards.
If your customers feel like they’re going to miss out on their member-only benefits, and they’ve worked hard to earn them, the more likely they are to use them before they expire.
It’s in human nature to avoid losing things we’ve tried hard to earn, and the same principle should be applied to your rewards program.
Equally important, is notifying customers when they’re about to lose their points and rewards.
Adding expiry dates to your points and rewards does three things;
1) It creates urgency
2) It keeps points and rewards top of mind
3) It drives engagement
Customers that are more engaged in with your points currency are more likely to return to spend them.
When you communicate that, either by point balance reminders or reward expires, it’s a form of re-marketing customers actually want to receive.
Why? Because it’s free rewards of course – and everyone likes “FREE”.
Expiry can activate additional sales
For rewards programs that include tier structures and qualification points to become a VIP, maintaining activity to keep your “status” can be rather important.
Airline programmes such as AirPoints have done a great job at creating value across their status schemes.
Customers are encouraged to maintain their activity with the airline or risk losing the member benefits. If that means catching a few more extra flights, for their free lounge access and seat upgrades, they do it.
It’s another thing for your marketing team to talk about
For businesses that don’t have very sexy products; I’m talking finance, insurance or fuel, it can be hard to drum up excitement or engagement with your brand.
Generally, a letter from your finance company is bad news!
Your loyalty program is a promise between your brand and your customer. Telling your customer you acknowledge the efforts they’ve made over the last year, and you don’t want them to miss out on their hard-earned points goes a long way to reinforcing that promise.