Do consumers want experiential rewards?
In March, Kayla Watters, a Kohl’s Yes2You Rewards member, participated in a fashion shoot in Palm Springs to support the just-launched LC Lauren Conrad Festival Collection.
Her modeling debut came, in part, because Ms. Conrad, the TV personality and fashion designer, was pregnant and unable to front her label. Instead, the brand turned the situation into an engagement opportunity. Said Ms. Conrad in a video, “I really love the idea because it’s a way to say thank you for supporting the line.”
In a column in Forbes, Bryan Pearson, president of LoyaltyOne, said the Kohl’s photo shoot exemplifies how brands are turning to “one-of-a-kind reward-program experiences” to deepen engagement as well as learn from customers about what matters most in their brand experiences.
The trend comes as research from Capgemini Consulting finds 97 percent of loyalty programs rely on transactional rewards, or largely some discount. A survey from COLLOQUY in 2014 found that 54 percent of consumers were unhappy with the reward options offered by their favorite brands but were open to receiving tickets to live events as rewards.
Mr. Pearson cited a few other examples of experiential rewards:
- My Coke Rewards: The service customizes bottles for bride and grooms, offers options to donate points to local schools and holds sweepstakes such as a chance to win a $24,000 home makeover.
- Neiman Marcus InCircle: For Circle Three Members (annual spend – $2,500 to $4,999), a complimentary service tracks down hard-to-find tickets to events, makes dining reservations at top restaurants, and handles travel arrangements including creating dream itineraries.
- Marriott Rewards Experiences Marketplace: Recently, Marriott auctioned off a chance to stay in one of eight tricked-out tents mimicking one of its boutique hotel rooms at the Coachella music festival.
“Important to these experiential reward strategies is that each is sized up to its audience,” wrote Mr., Pearson. “From Kohl’s branded photo shoots to Marriott’s customized tents, each brand uses its program data to develop reward options that hit the relevant sweet spots of its core members.”
- Chic Peek: My May LC Lauren Conrad Festival Fashion Collection – Lauren Conrad
- Behind the Scenes at the LC Lauren Conrad Festival Collection Photo Shoot | Kohl’s – YouTube
- Experiential Rewards: How Kohl’s, Neiman Marcus And Marriott Set A New Bar – Forbes
- Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age – Capgemini Consulting
- 54% Of Americans Unhappy With Loyalty Program Reward Offerings – COLLOQUY
DISCUSSION QUESTIONS: How do you see experiential rewards supplementing transactional rewards in loyalty programs? Should experiential rewards be reserved for best customers?