Anyone who ever joined a loyalty program has experienced losing out on loyalty points. The redemptions which go unredeemed. The loyalty punch cards which are never finished and are eventually thrown away. The forgotten points that expire and wither away.

In fact, a recent study showed a mind-bogglingly amount of loyalty points go unclaimed by participants — $100 billion loyalty points to be precise. That’s a ton of free rewards just left on the table!

Why do loyalty points go unused? And if you’re a loyalty program provider, why should you care?

After all, if no one is redeeming points then that means there’s no cost to you. They should just go on accumulating points and never spend, correct?

Not at all.

While you do want to have some level of point breakage, little to no redemptions is a bad sign. When program members are signing up but not participating in the full loyalty process, it means customers are not engaging with your program. Not ideal when customer engagement is supposed to be one of your goals. Especially since low participation eventually leads to brand abandonment.

A loyalty program’s purpose is to support the consumer behaviors that lead to true loyalty and revenue growth. If your program data reveals your members contain a high number of points with very low redemption, you need to start looking into reasons why.

We have a number of strategies you can use to re-engage your participants and encourage them to redeem their accumulated points:

1. Make Your Point Redemption Easy To Understand

If your redemption levels are low, you don’t need to immediately begin a major overhaul and completely revamp your point structure or rewards. Start with simple fixes:

  • Is your point redemption process easy to understand? – Simplicity is key when it comes to point redemption. The more barriers blocking a participant from using their loyalty points, the less likely they are to actually redeem.

Your process should involve minimal steps and by clearly explained somewhere within your loyalty platforms. 

2. Make Available Points Available to Your Customers 

Customers are busy people with many demands on their time and dozens of other interruptions fighting for their attention. You shouldn’t expect your customers to follow their points balances on their own. The easier it is for participants to track their points, the easier it is for them to redeem.

  • List their available points balance on the main page – Consider making customers' points total available on the main screen after they log in or present in a top or sidebar as they scroll through the rewards catalog. Now it's easy for them to compare their total with available rewards. They can add the cost of redeeming for multiple items or plan ahead for redeeming a higher priced reward.
  • Show the point balance on their personal profile – A nice personal touch is for you to include their points balance on their personal profile, along with their current standing in your rewards tier.
  • Show them the points they’ll get with a purchase – Here’s a nice tactic Sephora uses in their infamous Beauty Insider program. Beauty Insiders can see how many points they’ll potentially earn from each item currently sitting in their shopping cart. They can see how much closer they’ll get to the next membership or rewards tier if they complete their purchase -- which is a powerful motivator.

3. Send Point Balance Reminders

As we said before, customers are busy people. Sometimes they just forget about their available points balance, or to check if there are any new products they want to redeem. It’s up to you to reach out to them with reminders.

Email marketing is far from dead. In fact, it’s one of the primary methods marketers use to engage loyalty program members. Take advantage of the opportunities email marketing offers.

  • Give regular points balance updates – Emails notifying program members of their available points balances are good reminders to stay engaged. The best timing is monthly or quarterly emails with updated balances. This shows members how many points they earned in a given period and helpfully provides the number of points available to spend.
  • Send reminders emails when your program members are close to reaching another tier – If your loyalty platform includes a rewards tier — and it really should — then remind customers when they’re about to reach the next level. This not only helps incentivize members who are considering a purchase; it also positions your brand at the front of the mind for customers who aren't ready to purchase at the time. When the customer is ready to make a purchase, the extra instant benefit makes your brand an attractive first option over your competitors.

Every good program regularly reviews their rewards offerings to make sure their rewards are still of value to their customers. When you make new additions to your rewards catalog be sure to send out notification emails to your members. It possible the new products are just what long-time participants were saving their points for.

Take This Into Consideration

To let loyalty points expire, or to not let loyalty points expire?

This is a frequently debated topic within the loyalty program community, with good points coming from either side. Whichever route you choose, make sure you have a few strategies in place for incentivizing your customers. 

If you choose to let points expire….

  • Make sure you provide tons of advance warning – Make sure all relevant time periods are conveyed clearly to your program members. Provide them with plenty of advanced notice if their points are in jeopardy. Send members email reminders that also include solutions, such as redeeming for smaller items.

If you don’t choose to let points expire…

  • Create special points redemption events – These types of events encourage members to spend their points. For example, you could hold a promotion where items point values are reduced by half or another amount. Customers who are wanting to get the most bang for their buck out of their points will leap at this opportunity to redeem. 

For most loyalty program members, the perks are the rewards. If your customers aren’t redeeming for rewards, you should take the time to evaluate your program. The solution might be simpler than you think. In the end, helping your customers with their redemptions will lead to happier participants and a more valuable loyalty program experience.

If you’re still searching for ways for your customers to utilize their points, we can help

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