A rewards program allows you to nurture Customer Loyalty and increase the number of return shoppers, but how do you know if it’s working? Redemption rates can reveal the effectiveness of your rewards program and areas that need improvement, allowing you to pinpoint the best incentives strategy.Your rewards program’s redemption rate is calculated by dividing the redeemed rewards by the total rewards you sent to recipients. The average redemption rate for rewards programs is 13.67%. The rate is much higher with Giftbit — a report run recently of campaigns sending 400+ offers, the redemption rate averaged 75%.
Why Are Redemption Rates Important?
Reward redemption rates are an indicator of your program’s performance. They can show you how successful certain rewards are versus others, what messages are most effective, and the users’ satisfaction with the rewards program.
Increasing participation in your rewards program is crucial to getting the most out of its benefits, such as:
- Increased customer retention
- Enhanced customer loyalty
- Improved customer satisfaction
- Boosted Customer Lifetime Value (CLV)
An effective rewards program can improve employee satisfaction and boost productivity in a workplace setting. It’s critical to track your rewards to determine what motivates employees the most and ensure that the system is working.
7 Ways To Boost Redemptions Rates in Your Reward Programs
If your redemption rates are below average, it might be time to reassess your rewards program. The core of the problem is a lack of participation, so you need to find ways to make your program exciting and easy to use for your recipients.
To give you some inspiration, we’ll show you seven ways to increase redemption rates for your rewards program.
1. Pick the Right Timing
Timing is everything, even when it comes to rewards. Customers are more likely to make purchases at certain times, whether it’s a specific time of day or during sales and promotions. You can use metrics like purchasing frequency and time to purchase to implement an effective strategy for sending rewards.
Using a rewards tool like Giftbit, you can automatically send gifts when a user completes a specific action. This feature allows the customer to receive their prize instantly, making it more likely they will redeem it right away.
2. Set an Expiration Date
Psychological studies show that humans naturally have a higher motivation to avoid loss than to pursue gains. By putting an expiration date on your rewards, you can stir more customers into action before they lose them. However, you should be careful to give a reasonable time to redeem the rewards because too little time can hurt customer satisfaction.
3. Send Reminders To Redeem
Most people have forgotten to use a gift card or coupon, leaving it tucked in their wallet until it’s too late. If you want to help your customers avoid missing their chance and improve your redemption rates, you can send a polite message reminding them they have rewards to redeem.
4. Personalize the Rewards Message
Coming up with the perfect subject line to capture the average loyalty member’s attention could get you more redemptions. You can use A/B testing to compare the performance of email templates, tweaking your greetings, message body, and other aspects to achieve the best results.
Using the customer’s name and suggesting products they like are personal touches that can encourage customers to form a stronger attachment to your brand.
5. Match the Reward to the Request
The reward should match the effort the user spent to earn it. For example, a $5 gift card is an adequate reward for leaving a short review for your products or services, but higher value incentives are necessary when you ask for a significant contribution from the user.
6. Offer More Ways To Earn Rewards
Making the process of earning rewards a fun experience goes a long way toward increasing participation. Gamification strategies like earning points or gaining levels make your program more engaging for users, leading to a higher chance they’ll redeem the rewards they earn.
7. Give the Gift of Choice
Some people prefer entertaining or experiential rewards, while others prefer to receive items or balances to spend. Finding the one perfect gift for a large audience of individuals is almost impossible, but you could always leave the choice up to the recipient. With our easy-to-use rewards software, you’re able to select a variety of different brands from our rewards catalog to offer and your recipients can pick their fave!
Track Your Reward Programs and Redemption Rates
Improving your redemption rates is essential to a successful rewards program performance. Giftbit is a tool that allows you to buy and send rewards through an app, set up triggers for automatic rewards, and integrate with apps through Zapier. Additionally, you can find easy-to-read stats on your rewards program, supplying insights on user behavior and redemption rates. Our support team is always available to help you get the best redemption rates from your rewards program. Reach out to the team today!
Sign up for Giftbit today and start optimizing your rewards!