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Loyalty Programmes: What Tier Structuring Choices Are There?

                             Tier structuring offers choice to all types of business or professional service.

The WeboDigital App is a toolbox that enables customers to grow a business.
Every Loyalty Programme is an invitation to engage at an inter-personal level to build relationships with customers as:
  • FANS who are shown appreciation with reward opportunities,
  • ADVOCATES who share banefits with friends as they are valued and because it is esy to share and as
  • ADVISORS who offer reviews and who advise on market demand, etc.


                   App Functionality
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Structuring Tiered Loyalty Programme Rewards
Why have loyalty programmes expanded from frequent flyer miles to customers clipping grocery coupons, then to frequent shopper punch cards and more? The answer is, they work.
Programmes Differ Because Objectives Differ
Loyalty programmes promote three tiers of participation. Firstly, the self-interest layer, secondly the advocacy layer and thirdly the advisory layer. As one moves from the hospitality sector to retail the emphasis on the layers may change and the structuring of rewards will differ to encourage desired outcomes.
Attracting New Customers is More Difficult and Costlier
Attracting new customers is more difficult and costlier, than maintaining customers across business sectors by a factor of 5 to 25. The power of referrals to grow a business are often overlooked and loyalty programmes are ideal mechanisms to encourage and reward referrals. Simply put, advocacy brings a customer’s friends and business associates to a business and in this way advocates help to grow a business because referrals are persuasive.
Fans, Advocates and Advisors
Beyond rewarding customers for their patronage (level one) and for their advocacy (level two) customers can be encouraged to become advisors (level three) who help to make a business better and more relevant to market demand. The information that customers can provide can be used to improve demand for a product range. Participation at level three cements relationships. Level three advisors are likely to also be active level two advocates.
Internationally, loyalty programmes are expanding from being in the third-party marketed discount coupon book phase to own branded loyalty programmes integrated with social media.
Regular Buyers in a Competitive Industry
Sectors that have frequent buyers, in a competitive industry can gain an edge with a loyalty programme. If one believes that loyalty is about punch cards, to get the 11th free, or the tear off coupon in a booklet, think again. Loyalty programmes that address level two and three needs will take a business beyond the arena of discounts to finding and delivering sustainable desirable value.
Why  Go Cheap; Promote the Brand Value
It need not be about going cheap to attract traffic. What about getting customers to try new cocktails, side dishes, a salad with a pizza or take-aways to be delivered to the office?
We All Want to Belong
People enjoy a feeling of inclusiveness and the granting of tiered awards (to advocates and advisors) will drive participation.
Give Customers a Kick-start
Where points are awarded, awarding bonus points, such as double points towards level three rewards will boost participation as will structuring level one points to grant those that register a registration bonus, of say, 25% of the first-tier qualifying requirement.
Tier lucky draws excite, and giving tier benefits that include automatic entrance in lucky draws, is a winner.
Find and Promote the Value
Exploring valued benefit options such as:
  • express checkout, express delivery and invites to restaurant sampling tables is often well received by loyalty programme participants.
  • ­Meet the chef privileges, a free side order, refills and Wi-Fi access are other benefit options.
  • Meet and greet by name.
  • Order in advance for that pre-movie meal, etc.
Build a Community
It has to be more than about giving away rewards, it has to be about inclusiveness that may be achieved by granting tiered “memberships.”
Customers that join a loyalty programme, are inviting engagement and thus one needs to offer communication channel preference options that are actively used  to communicate. Think – App, short messages, e-mail, blogs and engage to determine preferences and then excite with surprises.
Surprise with recipes, details about your suppliers and why they were selected, your buy local policy, invitations to “specials” nights, an invitation to a cooking lesson, etc. Consider creating secret menus for higher tier members. Work on the relationship and make it mutually beneficial in ways that go beyond the rewards.
Compete with an Advantage
To survive and thrive in a competitive market you need an edge and a loyalty programme can give you a connection that is the relationship builder that may just grow your business beyond expectation.
Ideas on Structuring Loyalty Programme Tiers
Example One: Based on activities (Patronage, Referrals & Feedback)
Tier one; Fans - Excite with deals, lucky draws, events
Offer coupons to the public who register to download coupon specials, event entrance tickets, lucky draw participation tickets, etc. These coupons are available on the App which showcases the range of products and services.
Tier two; Advocates - Excite with benefits that are on the Advocates blog.
Offer rewards for patronage and for new customers referred by you. As an example, consider requiring fans to submit any coupon for redemption with till slips totally eg R1,000. In return they could be e-mailed access to a blog where the advocate tier benefits and the duration of membership are explained. Benefits could include advanced booking preferences to events, extra coupon benefits, etc.
Tier three; Advisors - Excite with benefits that are on the Advisors blog.
Offer rewards for sharing reviews or for returning survey questionaires. As examples consider requiring fans to submit any coupon for redemption with a list of 4 menu items that they have reviewed and have shared. Benefits could include an invitation to a tasting evening or a cooking course. Access to a secret menu on a password protected blog of new items that are pre-booked at discounted prices is a great way for advisors to test new menu ideas and to suggest preferences to chefs and grill-masters.
Example Two: Based on the Value of Patronage ( Earn 1 point for every R1 spent)
All points are accumulative for the past year which determines the tier status of a loyalty programme member at any one time. All members receive milestone benefits upon reaching a 5,000 point milestone. Excite with deals, lucky draws and events. Gold and Platinium Tier members receive aditional benefits by way of coupons that are e-mailed to them. Promo codes and gift voucher numbers can also be used to acquire coupons and vouchers.
Tier one; Silver (1 to 10,000 points)
Offer coupons to the public who register to download coupon specials, event entrance tickets, lucky draw participation tickets, etc. These coupons are available on the App which showcases the range of products and services.
Tier two; Gold (10,000 to 20,000 points)
Members qualify for a 5% discount on purchases and they are advised of new deals and specials before the launch date.
Tier three; Platinum ( above 20,000 points)
Members qualify for a 10% discount on purchases and they are advised of new deals and specials that they can buy before the launch date.
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