Best Practices - Keeping Consumers Engaged in Loyalty Programs
Best practices that keep consumers engaged in loyalty programs by telecommunication companies include offering loyalty program rewards that are relevant to their consumer base and that are worthwhile to consumers in terms of value, using mobile technology in engaging customers during the duration of rewards programs in addition to or over physical alternatives, and using a multichannel marketing strategy in the promotion of customer loyalty programs. We have detailed our findings and research strategy in the sections that follow below.
LOYALTY PROGRAM REWARDS ARE RELEVANT AND WORTHWHILE
- A common feature in reward programs across various industries, including the telecommunication industry, is ensuring the incentives of the program are meaningful and worthwhile to customers.
- Customers that are engaged by relevant reward systems return twice as often to bring more business to a company. Consequently, it is paramount to set up a good system that will keep customers engaged with the loyalty program so as to ensure they keep on coming back.
- Reward programs should also be easy to use across all customer categories to ensure all types of customers are effectively engaged.
- For example, in 2016, T-Mobile, a company in the American telecommunication industry, launched a loyalty program that "gave customers freebies on every Tuesday, a free share of stock for each primary account holder (with the opportunity to earn more with each customer referral), and an hour of free WiFi on every GoGo-enabled flight."
- The first round of Tuesday freebies featured Wendy’s Frosties, Domino’s pizza, and tickets to Warcraft. These are neither irrelevant nor low quality rewards because they applied to a wide range of customers and offered value on their loyalty to T-Mobile.
- To ensure rewards are relevant and worthwhile to consumers, telecommunication firms may also consider partnering with top consumer brands. An example of this is the 2016 partnership between AT&T and Macy’s, RiteAid, and Exxon Mobile, which allowed customers to earn and redeem points across the participating brands.
MOBILE TECH IN REWARD PROGRAMS OVER PHYSICAL ALTERNATIVES
- Most consumers, especially consumers within the telecommunication industry, do not want to carry around cumbersome physical cards in order to participate in a rewards program.
- According to research, 70% of consumers are more likely to take part in a loyalty program if it is on their mobile phone. Additionally, around one-third of millennials reported that they do not like loyalty programs because most of them require carrying around cards. Using mobile technology to target such consumers in addition to/in replacement of these cards eliminates this complaint.
- Most companies are now phasing out the use of cards in favor of mobile-based approaches and as a result, it is anticipated that 3 billion loyalty cards will be mobile by 2020.
- The top two reasons as to why consumers do not participate in loyalty programs that they are members of are they do not have their loyalty cards on them and they do not remember that they are participants of the programs.
- These two reasons can be resolved with the use of mobile technology because mobile solutions such as loyalty reward apps are more convenient and visible to consumers.
- As companies in the forefront of the use of mobile technology, telecommunication companies should implement mobile-based loyalty programs in order to gain an engaged customer base over the duration of such programs.
- A good example of this is the mySprint Rewards app that is available on both Android and iOS. The app can be used by Sprint customers to unlock amazing perks and great deals on shopping, travel and more in a fast, easy and free manner.
CONSUMER LOYALTY PROGRAMS ACROSS MULTIPLE CHANNELS
- Only a few companies advertise their loyalty programs and it is very uncommon to see any social media posts or marketing emails on loyalty programs.
- Consequently, another multi-industry best practice is to promote loyalty programs on social media and use a few emails to inform customers of the programs.
- The use of direct emails and social media posts can help "attract more visits and increase purchase frequency while reminding customers that their membership in a program offers many privileges."
- Essentially, keeping in touch with customers ensures they are actively engaged in a loyalty program because they will remain aware of its existence.
- Additionally, telecommunication companies should also test various incentives in email campaigns to see what is most effective. For example, firms can get an understanding of "which subject lines elicit the most opens and what cadence of email increases customer engagement."
- Social media is another increasingly popular way of keeping a brand in the minds of consumers. A healthy social media presence in today's digital age serves as a constant reminder to consumers and should be used to market loyalty rewards programs while keeping consumers engaged.
We began research by specifically searching for best practices on keeping customers engaged in loyalty programs within the telecommunication industry. We first searched for this information in the websites of key U.S.-based telecommunication companies like AT&T, T-Mobile, and Sprint. However, with this strategy we did not find any specific information that we could use to derive relevant best practices.
Next, we moved our search to general press release and news resources that included PR Newswire, GlobeNewswire, CNN, Reuters, and Forbes. Our hope was that we could identify specific information that we could use to derive best practices on consumer engagement in loyalty programs within the telecommunication industry. However, with this strategy, we were still unable to find specific information that was relevant to our research objectives.
Lastly, we targeted telecommunication industry blogs and scholarly sources in our search for information that we could use to derive relevant best practices. This search was conducted in resources that included Telco Professionals, Telecompaper, and, Google Scholar. With this strategy, we were only able to identify general telecommunication news that was not usable in creating relevant best practices for customer engagement in loyalty programs.
We then shifted our focus to multi-industry best practices for keeping consumers engaged in loyalty programs. Through this shift, we were able to find multiple resources that provided information on best practices that applied to a range of industries including the telecommunication industry. Consequently, we went through these best practices and identified the most relevant ones. After identifying the most relevant and applicable best practices in regard to the telecommunication industry, we searched for specific examples of U.S.-based telecommunication companies that have ever used the identified best practices to improve consumer engagement in loyalty programs.