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Exploring the Power of Promotions in Loyalty Programmes

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By: Charlie Hills CLMP™ |

Posted on August 2, 2023

Promotions are one of the most effective marketing disciplines for creating a short sharp positive impact on multiple KPIs. And their ability to have that same impact in loyalty marketing is no different. Promotions can help a programme acquire members, engage existing members, drive desirable behaviours, shift attitudes and impact the bottom line like nothing else. They can shift the dial fast, and the very best can hit multiple KPIs quicker than anything else in a very cost-effective manner. ROI can be significant and investment smaller than for comparable impacts in other disciplines. Done well, they pack a powerful punch.

And yet, they are often designed and executed poorly in loyalty programmes – propositions that don’t excite or inspire action, mechanics that don’t really work, prize pools that fall flat, communications strategies that fail to engage the desired audience and an operational set up that don’t quite work as they should, or, at worst, creates a negative experience.

How should loyalty programme marketers be thinking about promotions?

The British Institute of Promotional Marketing defines promotions as “any marketing initiative, the purpose of which is to create a call to action that has a direct and positive impact on the behaviour of a targeted audience, by offering a demonstrable, though not necessarily tangible, experience, incentive, interaction or benefit.”

Loyalty marketers can think about promotions as short-term, quick-fire bursts of activity, designed to create a spike or step change in behaviour or attitude, a critical tactic to deploy as part of your long-term engagement strategy.

They are, in effect, the High Intensity Interval Training (HiiT) workout of your long-term strategy for customer engagement ‘fitness.’ Big results, fast, across multiple KPIs. Want to get lean in 15? A promotion might just be the answer you are looking for.

What impact do promotions have?

In 2023, Mando-Connect conducted research with YouGov the impact of promotions on 3 key objectives amongst British adults. When a brand or loyalty offers a promotion, the impact is startling strong and positive:

  • Capturing attention & driving trial
    • 73% are more likely to try a brand
    • 72% are more likely to notice a brand
    • 63% find a brand more appealing
  • Driving increased spend
    • 57% will spend more
    • 57% will shop more often
    • 51% shop whatever is on promotions
  • Winning hearts
    • 50% are more likely to recommend
    • 35% are more loyal
    • 34% feel more emotionally connected

Do loyalty programme members really engage with promotions?

In unsurprising news for anyone in loyalty marketing who has ever run or tested a promotion in their programme, the answer is a resounding yes! People who are members of loyalty programmes are far more engaged with promotions than non-members.

  • 77% of loyalty programme members take part in promotions (vs 59% of people who aren’t a member of a loyalty programme)
  • 70% of loyalty programme members think all brands should offer promotions (vs 62% of people who aren’t members)
  • 81% of loyalty programme members think promotions are a great way for brands to reward customers (vs 66% of people who aren’t members).

What types of promotions should loyalty marketers consider?

There are 3 core types of promotions to consider as part of your loyalty programme promotional strategy:

  • “Get” promotions are promotions where the audience gets a guaranteed reward.
  • “Win” promotions are promotions where the audience gets a chance to win a reward.
  • “Give” promotions are promotions where the audience gets a reward to give to others.

Within each core type there are multiple mechanics that you can select from. From ‘Gets’ like Money Off or Value-Added Rewards, to ‘Wins’ like Prize Draws, Instant Wins or Games to ‘Gives’ like Donations. The selection of which promotional mechanic is right for your audience and your programme should be a strategic decision, informed by factors such as audience preferences, desired impact, market context, legal parameters, operational capabilities and resources, timings, and budget.

Which loyalty programmes are getting promotions right?

There are numerous brilliant case studies of promotions in loyalty programmes, across all 3 types. Here are a few recent favourite examples:

GET – Free Fries Friday from MyMcDonald’s Rewards

In the US, MyMcDonald’s Rewards regularly operates strong, simple ‘Get’ promotions. For example, the programme uses a powerful ‘Get’ to drive customers to download the app and join the programme – new joins get free large Fries with a minimum $1 purchase when they download the app and join the programme.

The programme also uses ‘Gets’ to spike member engagement once joined. For example, members could make it a “Fry Day” with a friend and get free medium Fries with any $1 minimum purchase.

Read more here.

WIN – Shell Go+ Spin to Win

In the UK, the Shell Go+ loyalty programme has mastered the art of the ‘Win’ promotion. Shell Go+ Spin to Win is a tiered instant win promotion that offers members millions of prizes to be won. It attracts new customers to Shell, drives join-up to the Shell Go+ loyalty programme, engages existing members and re-engages lapsed members all in one big hit. With every £10 spend on fuel, or £2 spend in-store, people spin to win prizes from the likes of UberEats, John Lewis, Waitrose, Halfords, Jamie Oliver and Shell Energy.

Read more here.

GIVEAS Roma’s “Football Cares” Promotion

In Italy, the AS Roma “Football Cares” promotion started in 2019 by helping to find missing children. The social media initiative was created by AS Roma with the International Centre for Missing and Exploited Children. Children from 21 different countries were featured. Transfer announcement videos were used on social media to highlight missing children across the globe. The initiative helped find many lost children. Clubs, players and communities were engaged in the activity. It has since been extended by AS Roma into broader territories such as supporting the Budapest Community (May 2023), fighting discrimination, and supporting Ukrainian women and children.

Read more here.

Promotions pack a powerful punch.

Loyalty marketers everywhere should be inspired by the unique power that promotions have to shift the dial on multiple metrics fast, all in one big hit. As ambitions get bigger, but budgets and resources get smaller across the globe, they are an ideal way to turbo charge your programme’s performance.