5 Great Ways to Burn Loyalty Points and Engage Customers

Did you know 84% of customers stick to brands that offer loyalty programs? The NielsonIQ study confirms it. The same research shows us that 66% of customers positively change their buying behavior when they shop and earn loyalty points.

But we all know life happens, so busy customers can easily forget about their unused loyalty points. That’s where you come in, sending them helpful reminders that include data-led offers, like auctions or sweepstakes, to give them plenty of opportunities to use them. ‘Burn & earn’ offers encourage customers to return to your site to possibly complete that abandoned purchase or buy a recommended item. Either way, it increases your average monthly sales and customer conversion rates.

5 great ways to burn loyalty points & engage your customers like a pro

Try these five ways to encourage loyalty members to burn unused loyalty points and become a brand advocate by choice.

Sweepstakes

Sweepstakes are a powerful way to engage your loyal customers, collect customer data and drive awareness with new customers because everyone loves winning! An estimated 55 million Americans participate in sweepstakes every year. This promotional strategy can boost retention.

Companies like Starbucks and McDonald’s use sweepstakes as an effective way to create brand loyalty while also reducing points liability. This strategy entices customers to engage with the brand and redeem their existing loyalty points for a chance to win exciting prizes or perks.

Here are some things to consider when you design sweepstakes:

• Set clear goals: Brand awareness, increase in sales, more traffic, better outreach, etc.
• Follow the terms and conditions to comply with legal rules and regulations, like age restrictions, tax implications, etc.
• Clearly explain the rules of the sweepstakes to your customers, so they’re aware of sweepstakes limits, loyalty point redemption rules, as well as the winning criteria

Customer engagement as a result of active participation in sweepstakes is tough to beat. Sweepstakes, when designed the right way, can benefit your brand by increasing social media awareness and omnichannel traffic as well as promoting your loyalty program.

Example #1: TaylorMade example

Email Marketing Message

Example #2: Microsoft

Microsoft Rewards continually runs exciting sweepstakes programs. In its most recent program, existing loyal customers have a chance to win an Xbox Series S console, Surface Pro 7 Plus, 12 months of Xbox Game Pass and other rewards. There was one winner each month through June 2022.

Meet the rewards:

Redeem your loyalty points for gift cards, sweepstakes entries, nonprofit donations, etc. It’s the easiest way to get rewarded for doing what you already love to do.

Auctions

Auction tactics are highly interactive, social, fun and inexpensive. Companies use these strategies to build better relationships with their existing customers and give them a classic experience with a certain event, product or service being auctioned.

Customers redeem their loyalty points to bid during auctions. It’s a great way for members to spend unused loyalty points. Throughout the auction, companies can send members reminders and congratulations messages to encourage them to fine-tune their bids and motivate them to stay until the end. When the auction is over, the points used to bid are automatically deducted from the winner’s account.

Example: Wyndham Rewards

Wyndham Rewards allows its customers to redeem their loyalty points for unique experiences, vacations and other prizes in an auction. This strategy puts a fresh spin on their loyalty program.

The Wyndham Rewards program connects with at least 16 brands. Each loyalty program member enjoys various auctions and deals from these brands.

For instance, you can win tickets to a live JLo show in Nevada or family tickets to theme parks or national parks. The bidding ranges from 3,000 to 10,000 points. The auctions typically last for two to four weeks. Winners get email notifications after the auction ends.

Contests

Contests can drive excitement for your brand and have the potential to go viral. If that happens, your brand awareness surges exponentially. Consider a challenge-based contest that tests customer skills, knowledge and experience.

When it comes to contest rules, it’s a good idea to run these by your legal team, as legally you need to allow customers to enter contests free of charge, even if it requires points.

Example #1: Surdyk’s Redemption Pool 

Example #2: Samsung Entry Contest

Samsung Rewards ran an entry contest in 2019 where they allowed their loyalty members to participate by answering a question. By redeeming 250 rewards points, customers were granted an entry into the contest as well as provided with a unique, random 10-digit code distributed in the form of a voucher. Customers were asked to answer the question, ‘How has Samsung Pay changed your life?’. Customers could get more entries by redeeming an additional 250 points for every answer submitted. Campaign prizes included a Samsung Galaxy Note 9, Samsung Galaxy A9, Samsung Galaxy watch or a Samsung battery pack.

Experiential perks

Brands can encourage their loyal customers to redeem their loyalty points in exchange for receiving experiential perks rather than traditional discounts or coupons. These kinds of perks also establish deeper emotional connections with your customers. It’s an immersive way to go beyond transactions and improve overall customer experience. Some experiential perks include meet and greet with your favorite celebrity, private events, special access to VIP product launches, personalized products and more. By engaging your customers in various new and exciting ways, you can actually help customers build lasting memories which eventually have a great impact on your brand’s reputation. The best part? This can also lead to referrals because your customers will happily share their exclusive experience with their friends and family.

Example: Sephora Beauty Insider Experiences

Sephora Beauty Insider program rewards their customers with loyalty points and tier status for money spent shopping at Sephora. Every reward tier comes with perks that are accessible to customers based on their loyalty standing. For instance, customers that are a part of the ‘Rouge’ tier can redeem their points for samples, events and exclusive product launches.
The Sephora Beauty Insider program has more than 17 million members in North America alone. 80% of their sales are made by their loyalty program members. According to Allegra Stanley Krishnan, Vice President and General Manager of Loyalty at Sephora, “Loyalty is at the core of everything we do. We know rewards that provide greater emotional and memorable experiences are the most meaningful for our clients, and we want to continue to deliver personalized experiences where our clients can choose what works best for their needs.”

Donations to charity

Consumers want the brands they buy from to share their values. In fact, a recent survey by market research firm Ipsos found:

• Consumer brand preferences are driven by an alignment of their values and the brand’s purpose
• The link between consumer values and brand purpose has grown significantly in the last eight years
• Reducing environmental harm and standing up for social issues are two key expectations consumers have of the brands they buy from

Allowing loyalty members to redeem unspent points as charitable donations is a way to join together with them to make a difference in your communities and in the world, building emotional bonds. You can give them a choice as to which charities they wish to support.

Example: Surdyk’s

Use your points to give back. Under this program, customers can participate in ongoing charity events to support different causes—local or global. For example, Surdyk’s introduced a ‘Help the Ukrainian People’ charity.

Through customer donations in the form of reward points, Surdyk’s donates funds to World Central Kitchen (WCK) to help nourish and strengthen Ukrainian communities hit by war and political crisis. WCK serves thousands of fresh meals to Ukrainian families fleeing home as well as residents who remain in the country. All donations to WCK are matched by Surdyk’s.

Engagement is good for you and your customers

As you can see by the above examples, the ways in which your company can motivate loyalty members to engage with your brand are only limited by your imagination. You reduce your liability while building lasting emotional bonds and increasing lifetime customer value. Applying some of these tactics makes the customer experience fun, interactive and share-worthy.

For more than 10 years, Annex Cloud has been the worldwide leader in technology and service solutions that transform customer loyalty experiences for organizations, extending valued customer engagement and collecting valuable customer information for enabling data-led strategies. Our comprehensive, configurable and scalable Loyalty Experience Platform™, offers the widest range of customer engagement modules to deliver unique and fun interactions that incentivize profitable behaviors. Get in touch with us today to see how you can increase engagement and conversions while elevating your customer experience.