PFL’s Customer Rewards Program Playbook

A customer rewards program, when done right, can be a powerful tool for business growth. With 75% of consumers in a Virtual Incentives study saying they favor companies that offer rewards, your customers may not see loyalty programs as a bonus, but rather an expectation.

However, here’s the secret sauce to creating a standout rewards program: tactile marketing.

What’s Tactile Marketing?

Tactile marketing is PFL’s term for integrating direct mail with your digital channels. It’s exactly what it sounds like: marketing you can touch and experience in the real world.

Think about the last time you received a customer loyalty reward, like a coupon, in your email inbox. Maybe you read it, maybe you deleted it. But imagine that instead, you received the same coupon in your email inbox, used it, and then received a sticker in the mail, thanking you for your business.

Marketing that you can experience with all of your senses creates an emotional connection far beyond that of an email on a screen. And when we’re emotionally engaged, it’s been proven that our memory of that engagement is more accurate and lasts longer.

Though we’ve certainly become accustomed to the convenience of our digital world, science shows there’s really no replacement for tactile experiences.

Tactile Marketing and Customer Rewards

One of the best ways to continue building customer loyalty is to infuse your rewards program with a tactile marketing campaign. Here are the four steps for launching (or improving) your loyalty program, with tips for adding tactile marketing to give your program a serious edge.

Step 1: Know Your Customers First

Lay the foundation of a rewards program that gets results by learning about your existing customers first. The best way to do this? Watch your customers use your product. Clayton Christenson gives the example of a McDonald’s chain wanting to grow shake sales. While a wealth of data and focus groups did little more than discover minor ways to improve the flavor and presentation of their shakes, the company got real answers when they went into the store and observed customer behavior.

Their key takeaway? Shake sales were bizarrely high early in the morning, because people needed something tasty and long-lasting to get them through their daily commute. The marketers realized an important distinction: McDonald’s shakes weren’t necessarily competing with shakes from other fast-food chains — they were actually competing with breakfast food items like donuts and bananas.

The things you love about your product or service may not be the real reasons your customers are buying. In addition to surveys and focus groups, get inside your customers’ heads by observing them directly.

Infuse Tactile Marketing: Incentivize

Put together a research strategy that incorporates a variety of data from surveys, focus groups, and in-person observation. Offer a reward or incentive provided by direct mail to participants.

Step 2: Reach Customers on Multiple Channels

“Multi-channel” and “multi-touch” aren’t just buzzwords: they’re proven components of any successful customer loyalty program. And if you’re not reaching your customers in different places, you’re at risk of becoming part of the 50% of loyalty programs that customers don’t actually engage with.

The more channels you’re engaging on, the more you can learn about how your customers behave and what they really want.

Infuse Tactile Marketing: Make it Special

When it comes to direct mail, you may want to save your coupon blasts for email — and send your customers something truly memorable in the mail. Because the majority (78%) of today’s consumers may prefer to access rewards online rather than through mail, reserve the mail component for sending something truly special, like a “thank you” letter or a branded gift.

On the flip side, some customers may still prefer direct mail over email. Use your own data to inform your decisions: if you send a loyalty reward to your customer but it remains unopened for a set number of days, you can set up a trigger to send out direct mail to follow-up. If that customer redeems the loyalty reward you sent by mail, you can use this info to inform future communications.

Step 3: Keep Costs Down with Automation

You can dramatically cut costs when you use behavioral data to automate and streamline your rewards program. Take the data from your CRM and use it to inform your next loyalty program initiative. Track everything — email open rates, click-through rates, direct mail open rates, delivery, and offer redemption.

Infuse Tactile Marketing: Automate Direct Mail

You may think digital when you hear “automation,” but don’t neglect to automate your direct mail, too. You can reduce the cost of your whole program by mailing gifts, reward cards, or “thank you” letters only when they’re necessary. Here are some other ways to automate your direct mail:

  • If a customer signs up for a rewards program but then blocks you from their email, trigger an automation that sends a rewards statement directly to the customer’s mailbox.
  • When a customer checks particular preferences on your site, automatically send direct mail offers related to those preferences.
  • Send a direct mail component when critical milestones are hit (such as earning 100 points, or participating in your loyalty program for a certain number of months).

Step 4: Upsell and Cross-Sell

A customer loyalty program won’t get you any additional business if you’re simply giving away freebies for return visits. These customers would have come back anyway, with or without your rewards program.

The real value in a successful rewards program is often in upselling and cross-selling. Track the behavior of your loyalty program members to guide your offers. For example, if your best customer buys a new pair of jeans every couple of months, reward them with a discount on shirts or accessories.

And don’t worry too much about “creeping out” your customers for tracking their buying behavior: according to one survey, 87% of loyalty program members said they were open to having their activity monitored — as long as it gave them access to “personalized rewards or engagements.”

Infuse Tactile Marketing: Personalize It

Personalize direct mail with something simple like a letter that references a customer’s exact reward points left. Remember those “Choose Your Own Adventure” books? Let your customer do the same by creating personalized point systems or customer-controlled rewards — this not only increases engagement but reduces the workload on your end.

Multi-Channel Rewards Programs Are the Future

Memorable direct mail, when it’s integrated with your digital marketing, is a fantastic way to retain and increase the value of your best customers. It’s also a surefire way to stand out from your competition. Start building your rewards program with PFL’s Tactile Marketing Automation Book, or ask us how we can help you integrate your first true multi-channel rewards program today.