Intelligent Point Balance Thresholds to Drive Behavior
Description
Drive purchases via the right point balance thresholds with the right benefits and engagement
Examples of benefits:
- Improve Loyalty: Ensuring active engagement and using the rewards earned via the program
- Increase member transactions: Drives additional member transactions by ensuring the members take advantage of real benefit when available
The design of the loyalty best practice is important to ensure it has the right thresholds and the right benefit and type of engagement to maximize the success. Memberson can help you navigate both the business application and technical implementation.
Concept
Define certain point balance thresholds where attractive benefits can be achieved and encourage members that are close to achieving this to earn a few more points to take advantage of the next set of benefits and rewards. The reward and/or benefit has to be substantial to ensure success.
Execution Overview
- Define appropriate point balance thresholds with valuable benefits via reports
- Setup notification that will automatically inform a user when they are about to reach a certain threshold point balance, or when they have just reached a threshold
- Track purchases from participants
- Consider to run additional campaigns from time to time to target these members
KPI
- Cost of benefit
- Increase in spending / purchases > 5%
Detailed Execution in Memberson Loyalty CRM Platform
This is a typical implementation process but there are various configuration options available depending on the point structure, rewards and communication strategy.
#1 Define the point balance thresholds
For this scenario we will assume that vouchers are used for redemption of points. The first aspect is to ensure that there are more attractive vouchers to redeem for larger point balances. For example, you will get $10 off voucher if you have 100 points but if you have 300 points you can redeem a $50 voucher. This encourages members to spend more to reach the 300 points threshold that will allow them to redeem the voucher and then make additional purchases. You can also restrict the usage for the $50 voucher that it can only be used up to 50% of the sales price which encourages members to spend at least $100 in the additional purchase once they have received the voucher. There are many various combinations available, and the exact structure will depend on your brand, merchandise and member strategy.
For the scenario, as highlighted above, we will set up a threshold to capture everyone with a point balance between 250-299 to send out notifications to members (can either be email, SMS, push, WhatsApp or any other communication channel that you have enabled – or several of them) to encourage them to reach at least 300 points.
#2 Set up a notification
We can set up real-time rules that will trigger a notification immediately someone reaches the 250-299 points balance. However, this would mean that someone which has just made a purchase will immediately afterwards receive a message to make another purchase. This may not be very effective way to drive the right behaviour and may also annoy certain members. Instead, we will set up a campaign that triggers a SMS (we could have use other means of communication but for the purpose of this campaign we will use SMS) for all members that have between 250-299 points, where the campaign message has not been sent for the last 6 months and where no purchase was made in the last one month. We have the option of setting this up as a recurring campaign to trigger this every month, but since we do not know how successful this will be we will set it up as a normal campaign so we can refine our approach after we have tried this out, with different settings for who should be included in the campaign.
Below is one way to set up the target list in Engage. Do note that we have set up the target to include all members that have between 250-299 points and then we have introduced two exclusions in the targeting:
#1 Exclusion is to remove everyone that made a purchase in the last month
#2 Exclusion is to remove everyone that received this engagement in the last 6 months. Do note since this is the first time we run the engagement this is not meaningful for the first engagement.
The flexibility of the search patterns and targeting options enables us to define the target criteria in many different ways.
The next step is to design the SMS that will be sent when we run the campaign. Since we have selected a SMS for this it will be a fairly simple text message to remind the member to spend to take advantage of the voucher available for them. You can play around with the text copy to see what works best for you:
We will then schedule to send this at the appropriate time. For example, every month on the first Wednesday at 11am.
The below is an example of the SMS that is sent out based on the set up.
#3 Track Spending Purchases
In order to see how successful this set up is we will check how many people that received the message and made a purchase within 2 weeks of receiving the message. This can be done directly within the Campaign that was set up to send out the engagement under the Statistics Tab:
For example you can see each participant that the message was sent out to and if they made a purchase and when (since the start of the campaign. You can then decide if you want to look at different time periods with regards to purchases based on the transaction time. You have a choice of drag and drop different data fields that you want to view in the UI and you can also decide to download it to excel for additional data manipulation and analysis.
#4 Consider to run additional campaigns from time to time to target these members
There are many different combinations and strategies available around this, what rewards you define, what the point thresholds are, who the participants are and what type of communication channel and message that you use. The companies that are most successful have different strategies defined and will on a regular basis (every 12 month) review the outcome and further optimize the strategy.
