Let’s face it: modern consumers have A LOT of options. That’s the case whether they’re shopping for clothing, groceries, makeup, toys, or just about anything in between.
So once a brand or retailer earns a customer’s trust (and the initial sale), they’ve got to make it a priority to foster loyalty; it’s well worth the effort. As the business adage goes, it costs five times as much to acquire a new customer than it does to retain an existing one. What’s more, according to Microsoft, loyal customers are five times more likely to repurchase, five times more likely to forgive a mistake, and four times more likely to refer a family member or friend.
Many brands and retailers have developed loyalty or rewards programs to foster relationships with customers — and drive repeat purchases. And, when done well, these programs can drive some impressive bottom-line results. Per a Bond report, 79% of consumers indicate that loyalty programs increase their likelihood of doing business with a brand. And 73% say that they’re more likely to recommend a brand with a good loyalty program.
But there’s one (often overlooked) way brands can increase the impact of their loyalty programs. That’s by incorporating user-generated content (UGC) like ratings and reviews, photos and videos into their existing loyalty programs.
Let’s explore why brands should incorporate UGC into their existing loyalty programs — and how to go about doing it.
Loyalty and UGC: A Match Made in Heaven
According to a report from Accenture, more than 90% of companies have some form of customer engagement or loyalty program. For brands and retailers, these loyalty programs are typically based on transactions. For example, Ulta, a beauty retailer, awards one point for every dollar spent. And once the shopper accumulates a certain number of points, they can redeem them to receive a certain number of dollars off a future transaction.
It makes perfect sense to award points for transactions. After all, the ultimate goal of any rewards program is to drive repeat sales. But transactions aren’t the only way to engage with shoppers.
Today, a growing number of brands integrate UGC into their loyalty programs, rewarding consumers for submitting reviews, photos, videos, and other content. Doing so is a great way to engage with shoppers beyond monetary transactions. And these engagements are an effective way to foster authentic relationships with customers — and long-term loyalty.
Incorporating UGC into loyalty programs gives consumers opportunities to engage with a beloved brand in a way that doesn’t involve a purchase. What’s more, these consumers see firsthand that the brand values and appreciates their feedback and UGC contributions — which deepens their emotional connection to it. And of course, getting loyalty points to redeem with a favorite brand is always appreciated.
Of course, rewarding consumers for their contributions of reviews, photos and videos also benefits brands. Perhaps the most obvious benefit is that it helps the brand collect a higher volume of user-generated content. According to a recent survey, over half (59%) of consumers indicated they’d be motivated to write reviews if they received loyalty points in exchange.
Incentives leading to review submission
The user-generated content submitted by loyalty program customers has the power to positively impact the purchase behavior of future shoppers. In fact, our recent research found that ratings and reviews have become the most influential factor impacting purchase decisions — even above price.
What’s more, an analysis of 1.5MM online product pages from more than 1,200 brand and retailer sites found that there’s a 120.3% increase in conversion when a shopper engages with ratings and reviews on a product page. And there’s a 91.4% lift when a visitor interacts with user-generated photos and videos on a product page.
Combining UGC with a loyalty program also gives brands the opportunity to strengthen relationships with existing customers. This will increase loyalty — and repeat sales.
A Simple Framework for Incorporating UGC Into Your Loyalty Program
Clearly, incorporating UGC with an existing loyalty program is a win-win for consumers and brands alike. But doing so can seem overwhelming when you’re not sure where to start.
Here’s a simple framework for incorporating UGC into your brand’s existing loyalty program to get you started.
Determine Which Types of UGC Will Earn Loyalty Points
You’ve made the decision to incorporate UGC into your loyalty program. The next step is to determine what types of UGC will earn points for customers in your loyalty program. To do this, you’ll need to consider which types of UGC are most valuable for your brand.
For example, let’s say you’re a cosmetics brand. You regularly analyze the impact of UGC on conversion and have noticed that site visitors who interact with the following types of UGC convert at a rate that’s significantly higher than average:
- Ratings and reviews
- User-submitted photos
- User-submitted videos
In order to generate more of this conversion-boosting content, you decide to award points for submission of these types of content.
You also know that beauty shoppers turn to social media sites like Instagram for inspiration. So you decide it also makes sense to reward points to those who post photos and videos of your products (and tag your brand) on Instagram (if you use them in your own marketing).
Specify Quantity of Points Awarded for Each Action
Once you’ve decided which types of UGC submissions will be eligible for loyalty points, you’ve got to determine how many points each submission is worth. In order to determine the appropriate value, you’ll need to consider the value of the type of UGC to your brand as well as the level of effort required from the shopper.
For example, you might decide on the following points structure.
Number of Loyalty Points Awarded
Ratings and review submission
Native photo submission
Native video submission
Instagram post with brand tagged
Providing an approved response to a question from a fellow customer
It’s important to strike the right balance between offering an incentive that’ll entice customers to submit content — while still ensuring that the resulting content is authentic.
You may also want to consider setting a limit on the number of points a loyalty program member can earn by submitting UGC. For example, you might determine that your customers can earn a maximum of 100 points per calendar year by submitting UGC. That helps ensure customers aren’t submitting a high volume of low quality content just to get points.
Promote Your Enhanced Loyalty Program to Current and Prospective Members
Your loyalty program members probably know that they receive points for purchases — as well as bonuses for things like birthdays and membership anniversaries. Be sure they also know that they have the opportunity to earn points for submitting UGC.
Send out an email communication to your existing loyalty program members to let them know they can now earn points by submitting UGC — as well as how to do so. And when you send post purchase emails to your loyal customers, make it clear that they can earn rewards for their content contributions.
In addition, use the fact that you’ve incorporated UGC into your loyalty program as a selling point to get new members to sign up. You can promote this through a number of different channels, including (but not limited to):
- Your website
- Email campaigns
- Paid and organic social media posts
- In-store signage
- Your store associates
Collect and Display UGC
The promise of earning loyalty points is enough to make a lot of customers start the UGC submission process. But if they run into any problems while submitting their reviews, photos or videos, they’re likely to abandon the process altogether.
So be sure the entire UGC submission process is quick and easy — and can be completed from any device.
Once you’ve collected content, it’s time to display your UGC front and center. Doing so shows the content submitter that you appreciate and value their feedback and content — which boosts positive sentiment and loyalty. And, it makes it easy for future shoppers to find the content they need to make informed, confident purchase decisions.
Remember: when it comes to incentivized reviews, transparency is key. Be sure to display a badge or some small text (such as “Reviewed in exchange for loyalty points”) so it’s clear that the customer received an incentive for their contributions.
Reward Points to Those Who Submit UGC
Once a shopper has submitted a piece of content (and that content has been displayed), make sure they’re awarded the appropriate number of points. The points they earn from UGC submissions should be reflected in their total points as soon as possible to avoid unnecessary confusion and inquiries.
Streamline the Process with the Right Technology Partners
Incorporating UGC into your loyalty program is an effective way to generate more content and foster loyalty with shoppers. But regularly tracking content submissions and assigning and totalling points for submitting content can be a manual, time consuming process leaving a lot of room for error.
A better approach is to streamline the process by partnering with the right ratings and reviews and loyalty program platforms. Ideally, these two technologies should integrate with each other to make for a simple, seamless program.
For example, our fictitious beauty brand might opt to partner with PowerReviews, a best-in-class UGC platform — with a best-in-class customer loyalty platform like Zinrelo (like our friends at Jelly Belly do), Annex Cloud or Lootly. Because we can integrate these platforms via API, it’s easy to streamline the entire program.
Measure Continuously and Optimize Accordingly
You’ve successfully incorporated UGC into your loyalty program. But that doesn’t mean you should put it on autopilot from here on out. Instead, be sure to regularly measure performance to understand which parts of your program are working well — and which aren’t. Then, use that data to make optimizations to improve performance.
The right UGC and loyalty platforms will provide you with all of the data you need to understand performance — and make meaningful, impactful optimizations that’ll drive business results. So be sure to ask about the capabilities of any providers you’re considering.
Boost the Impact of Your Loyalty Program with UGC
It’s less expensive to retain an existing customer than to acquire a new one. So fostering loyalty must be a top priority.
Loyalty programs are an important way for brands and retailers to build lasting relationships with shoppers that lead to greater lifetime value. Incorporating UGC into these programs makes them even more effective — and helps drive bottom line results.