Customer reward programs are popular with today’s consumers. In fact, a survey commissioned by Hawk Incentives, a division of Blackhawk Network and a leading provider of rewards and incentives to organizations across the globe, found that the average American adult belongs to 6.2 such programs. That number was even higher for consumers in the Millennial generation at 6.5 on average.
We recently spoke with Theresa McEndree, the company’s Vice President of Marketing, to learn more about Hawk Incentives’ reward program services and survey insights as well as how RewardExpert readers can design effective loyalty programs for their own businesses.
Customized Rewards for Better Brand Experience
“At Hawk Incentives, we’re really focused on providing a better brand experience through customized rewards,” McEndree explained. “We offer more incentive rewards than any other provider including open loop—which are your prepaid Visa, Mastercard, Discover and American Express cards—as well as closed loop, single-brand products such as cards for Lowe’s, Home Depot and Target.”
Hawk Incentives’ proprietary technology also allows the company to create filtered multi-merchant reward cards for its clients. “Say someone wants to build a healthy lifestyle card,” McEndree continued. “We can limit the use of the reward to spas, gyms and maybe vitamin stores. These customized rewards can be delivered as physical, plastic cards or digitally. We’ve seen a big uptick in digital reward delivery over the last three years.”
The company’s clients include corporations of all sizes and industries. “We work with big brands and partners to provide the right reward card to help them motivate their audiences,” McEndree said. “Whether it’s a consumer promotion, an employee reward or a sales incentive, we work both with direct clients as well as through other resellers.”
Reciprocity Is Essential in Today’s Market
The aforementioned survey of 1,500 American consumers included 645 Millennials, and Hawk Incentives gleaned particularly interesting insight from their responses. While the Millennials belonged to the most loyalty programs on average, they were also the most active (with an overall average of 4.2 versus 3.9 across all age groups).
“I think there are a number of reasons that Millennials belong to and are active in more loyalty programs,” McEndree explained. “For one, they’ve grown up with these programs. They’ve also come of age in an era where there is more of a bidirectional relationship with brands. Whereas 40 years ago you may not have expected much from a brand in exchange for your loyalty, Millennials absolutely expect reciprocity. If they are your customers, they expect personalization, benefits and rewards. I think that’s really why we see Millennials as this powerful segment of loyalty customers.”
Though the survey results revealed that Millennials were less likely than other generations to belong to hotel and airline loyalty programs, they were more likely to belong to online retailer loyalty programs as well as food and beverage loyalty programs.
Tips for Designing an Effective Reward Program
With so many businesses offering their customers rewards, a loyalty program needs to hit all the right notes to maximize engagement. McEndree offered the following tips for designing an effective customer reward program in today’s market.
1. Understand your customers and the brands they value. “Here at Hawk Incentives, we do a lot of research to help our clients figure this out,” McEndree explained. “For example, if you have a married Millennial, they might prefer different rewards than a single Boomer will.”
2. Give your customers the opportunity to choose. “Millennials want choice, personalization and relevance,” McEndree continued. “A reward catalog is a great way to make sure you give that to them. Let them select from at least three options.”
3. Provide a range of reward values. “One of the biggest mistakes we see in loyalty programs is earnings thresholds that are too high,” McEndree said. “You don’t want to make people earn $25 or even $50 worth of rewards before they can redeem them. Millennials especially are not going to stick around long enough to do that. We’ve seen a lot of success with lower redemption values of $5 or $10. You create additional engagement and retention and loyalty are better served.”
4. Always include a digital option. The Hawk Incentives survey found that 65 percent of Millennial respondents preferred digital rewards, especially in the airline, retailer and gym categories. “Millennials love digital,” McEndree added. “It offers instant gratification. They can redeem points immediately. Also, digital rewards don’t require you to bear the costs of physical production or postage. You can simply send an instant digital reward and make that connection instantaneously.”
Learn more about Hawk Incentives loyalty solutions at hawkincentives.com.