As good programs mature, most new members were once infrequent customers.
Paytronix Systems Inc., a provider of reward program solutions to restaurants and retailers, explained that targeting low frequency guests is the key to loyalty program impact in its latest brief, “Target low-frequency guests. Here’s why.”
Defining critical mass as the point where more than 15% of checks can be attributed to the loyalty program, the Paytronix Data Insights report revealed that, as a good program matures, the majority of new members come from low frequency and infrequent guests. This guest segment presents the marketer with the largest opportunity for increasing the number of times these guests visit a brand—resulting in more incremental visits won from competing brands.
As the Paytronix Data Insights report explained, medium to high-frequency guests will be the first to join a brand’s loyalty program. However, by month four, the proportion of new members who have medium-to-high visit frequency drops to nearly one-sixth, with the majority of new members falling within the low and infrequent segments.
The Paytronix Data Insights team has determined that a brand usually cannot reach 15% penetration by enrolling only its best guests. And to achieve higher levels of penetration, it is even more important to be skilled at enrolling lower-frequency members. According to the Paytronix brief, getting low frequency guests into your program requires:
Target the program design to the right segment – Focus the design on low-frequency guests. They will need to understand the value proposition quickly and be compelled to join on the spot.
Make it easy to join the program – Offer multiple ways to join the program, such as through mobile apps, text-to-join, mobile-friendly registration web pages, kiosks, iPads in the store, and even paper registration forms.
Always be enrolling – Your servers are the programs’ best ambassadors. They must understand how it benefits them, it must be simple for them to use, and it must be easy for them to explain the benefits to guests. Falling short in any of these three areas will likely discourage your servers from inviting guests to join the program.
“When setting goals for the organization, be aggressive and aim for at least a 15 percent loyalty penetration rate,” said Lee Barnes, head of Paytronix Data Insights. “Getting to this level means you will need some lower-frequency members, which is also the key to producing incremental revenue. Experienced partners know how to design the program to attract this group of clientele, employing ongoing enrollment campaigns that are designed to compel the infrequent group to join the ranks of the brand’s most engaged customers.”