There are few barriers to slow the flow of products and services between nations these days. Sure, globalization has brought about many benefits, but it’s also changed the rules of competition, as businesses have to work harder to get a better position than others. Tomorrow’s marketplace will reward companies that value entrepreneurial risk-taking, so there’s no better time than now to bolster your strengths and shore up your weaknesses.
If you’re vying for the attention of consumers, think about implementing a rewards program. Not only can you reduce the number of customers lost, but you also ensure they remain loyal to the business. Discounts, points, and other special incentives have been around for some time now, and more firms, not fewer, are getting in on the action. As a matter of fact, organizations are spending millions of dollars developing and implementing rewards programs.
Consumers have become more insightful and tend to gravitate towards brands that offer something truly remarkable. When did they get so picky? Anyway, if you want to give customers a reason to keep buying, beyond price, provide quality over quantity. Offer experiential rewards they’ll relive time and time again to reach a bigger market share. According to a new research report, The loyalty shift decoded, brands must provide value, instill trust, offer a wide choice, and deliver relevant rewards.
In sum, you must go above and beyond to create unforgettable moments for your clients. In a market flooded with similar offerings, it’s the emotional journey you offer that sets you apart.
There’s a Clear Preference for Experiences Over Material Possessions
Buying stuff is a thing of the past. If you have plans to give your Millennial clients gift cards or eBooks, you better think again. Why? Because they don’t care for material things. Young people are just not “attracted” to materialism, in case you didn’t know. An Eventbrite study says that millennials prefer experiences over things, seeking memories that linger in the mind over a long time. They grew up with everything they ever needed, so happiness isn’t focused on possessions.
To have something is becoming less important. Ownership isn’t that hard anymore. Millennials value experiences over things because it makes them happy – and they’re not wrong. Plenty of research has shown that spending money on experiences, such as travel and entertainment, brings lasting joy. Experiential purchases are sheer ecstatic joy, no matter if you measure satisfaction before, during, or after consumption. Experiences can be shared, which is incredibly important for younger generations.
Millennials have shifted value from the material to the experiential, and as today’s most influential generations, they’re redefining consumerism. Gen Y’s approach to consumption is marked by a desire for practicality and simplicity. It’s becoming evident in the rise of solo travels, workshops focusing on traditional arts, adventure sports, and yoga retreats, to name a few. As reported by Khoros, the collective annual income of Millennials is expected to exceed $4 trillion by 2030.
Experiential Rewards Can Drive Better Results for Your Organization
To thrive in today’s markets, creating a fantastic customer experience is of the essence. People frequently join rewards programs, treasuring the value and benefits they receive as recurring customers. They build trust in a brand that will likely develop into affinity and loyalty. For your business, this translates into a huge opportunity to win. Just make sure you get the customer experience right. Your strategy should be built on bricks, not sticks.
Develop a loyalty program that stands out from the crowd and, above all, rewards people for their continued support. Transactional rewards are great, no doubt, but experiential rewards are even better. For example, a customer shouldn’t be lured with a coupon but with an opportunity to have dinner with a famous chef. Experiential rewards can improve your business outcomes, as follows:
Create Emotional Connections with Your Customers & Build Lasting Relationships
Emotions influence and, in many cases, determine buying decisions. Material items lose their charm with time, unlike experiences, which are stored in the brain. Memories make the heart grow fonder, so they become prized possessions. Discounts can’t help you create a bond with customers, so it’s best to focus on creating meaningful and personalized experiences for your clients. Positive emotional associations with your brand can foster trust, loyalty, and positive word-of-mouth.
Customers try new brands and frequently change their shopping options. Put simply, they look elsewhere if they can’t find what they need. Even loyal customers leave after a bad experience. Personalization, once limited to targeted offers, is now the default standard for engagement. Treat consumers as individuals, not customer types or segments, understanding their unique needs and wants. It’s the key to a successful business.
Case in point: Your customer is a sports fan. The live experience is the only thing they want. Nothing can compare with the joy of watching their favorite players, cheering on the team, and sharing the excitement with others. You can offer them free tickets or a stadium tour at an unbeatable price.
Stand Out in A Crowd of Competitors
Competition is an inevitable part of doing business. To have an edge over everyone else who’s trying to woo your customers, you must come up with innovative solutions. Clearly, experiences add more value to your rewards program. In the sea of businesses, it can be difficult, if not impossible, for clients to remember who you are and what you do. But if you find a way to make your company stand out, you’ll be in the front of their minds. The more you know about customers’ preferences, the better.
Examples of experiential rewards include but aren’t limited to:
- Getting behind the wheels of a dream car
- Exploring the culinary and beverage delights of the city
- Embarking on a journey that combines excitement with breathtaking views
- Enjoying relaxation and rejuvenation with a spa day
- Experiencing an unforgettable trail-riding adventure
According to McKinsey, 3 out of 4 members of top-performing loyalty programs made lasting changes to create more value for businesses. Differentiation matters, but if you take things one step too far, you risk alienating potential customers. More exactly, strike a balance between being unique and being accessible.
Increase Engagement & Cultivate Brand Loyalty
Imagine the following situation: You run a coffee shop. To keep customers (and steal them from your competitors) you call them by their names and make an effort to remember their preferences to engage in genuine conversations. This approach creates a deep connection – every person feels like a valued customer. Is going the extra mile worth it? Why, yes! Offering experiential rewards motivates clients to come back again and again. For example, you can offer a free slice of cake alongside the coffee when people purchase it during their birthday month.
One-of-a-kind, personal, and noteworthy experiences turn customers into brand advocates. They spread the word about your business – but for all the right reasons. It can be hard to convince people to check and recommend your company if you’re not a big name. Maybe you run a law firm that handles personal injury matters and are frustrated with a lack of growth. Instead of banging your head and crying under your desk, offer your most loyal clients’ access to events or special perks (e.g., free consultations).
Check Out! Industry Examples That’ll Give You Serious Envy
After getting tanked by the pandemic, the economy is slowly but surely recovering. But that doesn’t mean it’s slowing down. It’s best to incorporate experiential rewards into your loyalty program to ensure the long-term success of your business. You can follow in the footsteps of Red Bull, which offers exclusive content, never-to-be-forgotten VIP experiences, and money-can’t-buy prizes like:
- Digital instant downloads
- Meet and greet with Christian, Max and Checo
- A range of products from partners (e.g., TAG Heuer)
- Oracle Red Bull Racing hats, t-shirts, jackets, backpacks, etc.
- Red Bull Racing factory tours
This list isn’t exhaustive, but it certainly is exhausting.
Red Bull has gone from a regional product to a global phenomenon. As highlighted by Statista, Red Bull was the leading energy drink brand in the United States in 2023, generating sales of roughly $7.34 billion. Still, for many years, it’s known for its 2 Formula One teams and 3 football clubs, not to mention the never-ending string of extreme sports events. In 2012, Red Bull launched Stratos, a high-altitude skydiving project involving Felix Baumgartner, who went on a historic space mission.
Adidas is yet another success story. The adiClub program is free to join and lets members accumulate points they can redeem later on to unlock exclusive rewards and exciting offers. Indeed, it’s a relatively new addition, being around since 2017, but Adidas’ rewards program has quickly become popular. Customers can register through the app, which offers various rewards. The adiClub is a four-tiered membership program that gives access to new releases, free delivery, birthday bonuses, free product personalization, and tickets to exclusive events.
Adidas clients are rewarded for their healthy lifestyles, so the adiClub is more like a community program. The brand takes advantage of its impact as a leader in sports to encourage others to stay physically fit and mentally healthy, using sports to change their lives for the better. Members of the adiClub can return used products so they can be resold, helping put an end to plastic pollution. Of course, the apparel must have the original tags attached and the box it came in.
What Are the Most Effective Practices to Ensure Your Rewards Program Excels?
If you’re just getting started offering experiential rewards or want to take a fresh approach to your loyalty program, here are a few points to keep in mind.
- Do Your Best to Get to Know Your Customers Better: Customers are more likely to purchase from a brand that recognizes them by their name, makes recommendations based on past purchases, and can personalize their experience. The question now is: How well do you know your customers? Knowing and understanding customer needs allows you to focus your efforts better. Please don’t shy away from asking people about their hobbies/interests. You can offer privilege-based rewards like express checkout to a selected few.
- See What Types of Experiences Completement Your Offering: Partnerships with complementary brands create value for customers (and your business). By themselves, some types of incentives can be costly. Identify viable partnerships to support your objectives, but avoid competing organizations. Bombas, for instance, has an animated collection for Pixar fans that stars all the familiar faces we grew up with. Consider partnering with a competitor only if the benefits outweigh the risks. Nonprofit partnerships can be super beneficial.
- Consider Experiences That Won’t Have a Huge Financial Impact on Your Budget: The truly unforgettable experiences don’t break the bank. A lot of perceived value can be created, even while reducing the investment in the loyalty program. Start with what you know you can do while accommodating as many members as possible. Here’s an idea: host an exclusive community event. It can be an anniversary party in your store. The idea is to get people together so they can meet and mingle; you foster a sense of community and build a loyal client base.
To Get You Started, We’ve Curated a List of Some Awesome Experiential Rewards
Meaningful experiences show customers you appreciate their loyalty to the company and that it doesn’t go unnoticed. The emotional connection acts like a glue that binds them and the brand. Experiences are also giftable to employees, sales teams, and channel partners, driving better results and happier outcomes. With the right mix of rewards, you can ensure your program is irresistible. If you’re chasing inspiration, here are some ideas for you:
Gourmet dining. Vouchers can be used for experiences that take diners on an unforgettable journey through food. It’s a great way to make special events like birthdays or anniversaries or simply show you care.
Spa treatments. The gift of the spa is a practical and considerate gesture that’ll be fondly remembered. Treatments aren’t limited to facials and massages. Just about anyone can benefit from a little bit of rest and relaxation.
Adventure sports. For the outdoorsy person on your list, consider unique ideas, like an overnight river rafting trip or a safari in Jim Corbett National Park. Think about what they’re passionate about, and from there, you can start brainstorming.
Cultural events. Through carefully chosen rewards, you can honor those who love to explore the world. Tickets to an arts and music festival make fantastic gifts if you’re 100% sure the person will use them.
Travel getaways. Deliver a standalone experience that’s different from the traditional leisure trip anyone can take. Think in terms of a luxurious cruise or a flight experience around the world.
Educational tours. Some rewards have educational value attached to them or support learning habits. Educational tours are a chance to learn by crossing the boundaries of books, not to mention they offer the opportunity to strengthen ties.
Classes & workshops. Don’t hand out rewards just for the sake of it. Classes and workshops help you motivate and inspire people to do better. A Python bootcamp, for instance, can transform anyone from zero to a hero.
Can you just imagine the power an amazing experience can have on your business? Empower people to tick these items off their bucket lists.
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So, all things considered, experiences are better rewards than things. Experiences create the most amazing memories, which is why you should include them in your loyalty program. It’s not about having but about being and becoming. Done right, such incentives help engage customers and form an emotional bond with them. But the benefits don’t end there. People will never forget how you made them feel, so they’ll spread the word to their loved ones in turn.
A successful rewards program hinges on tailoring experiences to individual preferences, so gather feedback. Is it actually working? Precision maximizes the impact of the reward, making it more meaningful. From overall satisfaction to suggestions for improvement, each aspect is essential for the success of your loyalty program. Make people feel like they’re missing out. Without the right rewards, you’ll just struggle to attract and keep customers.
At the end of the day, think carefully, think personally, and think memorably.
