The Lawrenson Group creating karma currency with customers
We’re always faced with questions from retailers migrating because of the cost of their old loyalty program. And it’s easy to believe it’s not working when you keep engaging the same set of customers. But good operators understand the importance of customer loyalty, to a point where they’ve created what we’ve coined ‘karma currency’.
For Lawrenson Group, which operates 20 bars, restaurants and Gastro pubs, they set out to create a currency between the customer and their venues.
Customers are rewarded based on the amount spent and they can redeem across all their venues. They’re also rewarded for profitable actions, such as reviews. “By rewarding people for experiences, they will come back to us over our competitors”, explains Ian Sewell, Marketing and Events Manager.
The Lawrenson Group has deployed their software instance of Goody throughout all their outlets. The point of sale tablets make registration extremely simple and yield the highest amount of member registrations to facilitate engagement - key indicators to program performance.
Point breakage and redemptions
For instance, last month customers spent 80% of their points earned. Anyone in the loyalty industry will know that’s an incredibly high percentage of spend relative to the points earned.
It’s this currency created with customers that not only keeps customers coming back to redeem, but members spend their points on profitable actions that engage members on a deeper level than just rewards.
By completing additional profile details, members receive additional points. When it comes around to a members birthday, The Lawrenson Group auto triggers off a birthday voucher loaded with $50 credit, via Goody.
The credit gets loaded to their card and their app account. Members can also use their email address or member details should they forget. "For something as simple as giving everyone a $50 birthday voucher, the redemption rate on them is huge. It's massive compared to any other offer. People are grateful for it.", explains Ian.
And let’s face it, if you receive a $50 voucher and redeem it on your birthday, it’s unlikely you’re dining alone – well it’s rather sad if you did!
Registration and card management
It’s standard within the industry to operate a card that’s swiped via the point of sale. Unfortunately, the downfalls to this approach lie in member sign up rates, and engagement rates.
If you’re asking customers to pick up a card, go online, register, then associate their card to their account, then go in store to start earning, then expect lower overall program results.
Sign up needs to be easy, instant and limited to just one or two steps.
“We’ve seen plenty of programs try to incorporate your payment card as the loyalty card, but all these types of programs have either fallen over due to associated transaction costs or the return on program investment.
For businesses out there looking to invest in a loyalty rewards program, you really need to weigh up your program costs, ongoing cots and expected return.
That’s why older technology and cards are still in use and businesses are reluctant to bank all their money on an app build.
"App builds are typically very expensive and only sign up 14% of what you could sign up with a card or direct from the point of sale. I’m sure there is going to be a tipping point within the next few years, to where you see a program return in conjunction with custom app and card builds. But we're not quite there yet.”, explains Rory Moss, Marketing Manager at Goody.
Creating your own currency
Most marketers understand that customer loyalty isn’t about your loyalty program, but rather your value proposition which your brand needs to reflect.
Before trying to implement your program, you first need to understand where your program fits into your overall marketing strategy. You might even find your industry isn’t suited towards a program.
For example, if you’re in a highly competitive or price sensitive industry, and you're operating at a higher price point, then you’re likely using the loyalty program to influence your price perception.
For those wanting to get started creating their own programme, here’s some quick advice:
Keep your overall program simple
Developing too much as part of your programme causes what we call loyalty confusion. If your members or staff don’t quickly understand what it’s all about, then your engagement and point redemptions remain low.
Invest in your rewards
If you’re not prepared to give your customers decent and meaningful rewards each time they visit and spend, then stop here. You’re going to need to start viewing your customers as a lifetime value rather than just a one-off sale. The more you reward them, they more likely you are to convert that customer to multiple transactions.
Don’t be afraid to leverage off existing platforms and seek help creating your program.