How to improve Mumzworld Loyalty Program by adding value to the customer & business?
A Design Research, Case Study & Design Improvement
Introduction
Loyalty programs are a great way to dish out rewards to the most loyal base of customers while also giving them a reason to stay engaged with a brand. This isn’t superficial engagement like views or clicks, either. If the rewards are valuable enough, customers will stay committed to a business for longer (even when faced with a negative experience) and also spend more money than one-time customers.
Research tells us that loyal customers spend 67% more than new ones through repeat purchases, larger cart sizes, and frequent upsells.
When it comes to building a loyal customer base, it’s important to understand that a Loyalty Program is a tool which is able to influence customers behavior.
That being said, I would like to guide you through my thought process and design decisions on how to improve the Mumzworld Loyalty Program experience by using psychological principles as well as analyzing the needs of each persona type.
Overview & Deliverables
In this article, you will take a look on
A — Personas & their Purchase behaviour
B — Audit of the current Loyalty Program and their entry points
C — Audit of a First time user experience| Silver Member
D — Audit of a Gold Member user experience
I spend a lot of time researching and using insights from related studies, to understand the goal of a Loyalty Program and the value for the business & customer. It helped me a lot to apply my findings to deliver a more engaged Reward program FOR Mumzworld. Redesigning a single screen wouldn’t improve the user experience rather than the UI.
I focused on how to improve communication and user engagement with the Loyalty Program.
How does Mumzworld Loyalty Program works?
Currently, Mumzworld Loyalty Program is a combination of Earn & Burn and Tiered Loyalty Program. It allows the customers to earn points every time they spend in the app or website, which can be redeemed at the checkout. At the same time the Tier program gives each user certain access to members-only benefits, and receive special savings on the next order.
Loyalty Programs suppose to increase Customer Lifetime Value — How does Mumzworld Loyalty program perform in engaging the user to return?
Before I will jump into the Audit session, let’s see what recent surveys are saying about CLV (Customer Lifetime value).
In recent years, brands and retailers have started building brand love as part of their retention strategy. And rightfully so: loyal customers not only have a higher purchase frequency and lifetime value, but they also help you acquire through word of mouth or, more formally, through friend referrals.
With each purchase, the likelihood of people sticking around for another order grows significantly. According to a survey from Luxury Institute LLC, repeat customers have a 60–70% chance of making another purchase on a subsequent visit, and prospective clients have a 54% chance of buying after a second visit.
In other words, building a strong emotional connection with customers with the help of a loyalty program has a direct impact on customer lifetime value.
Mumzworld's current Loyalty Program — The Audit
Step 01 | Personas — Understand customer's needs
To understand if the current Loyalty Program brings value to the customer & business — there is a need to analyze the current Persona Types. That is the starting point to call out potential improvements based on users' goals & pain points and their purchasing behavior.
The main Persona types are obvious mothers. They are the decision-makers in dealing with shopping for their Baby and Child. Let’s take a look at how Mumzworld Persona types impact the way we should rethink the Loyalty Program.
What does those 3 types of Personas have in common?
Besides the fact that they are mothers, all of them have the same or
similar goals:
- Looking for recommendations & guidance
- Looking for the best price value
- Accessibility
- Purchasing based on the child's age
How do the different Persona types affect Purchase behavior?
Each mother at a certain stage has a different need based on their experience and personal circumstances. Pregnant, First time pregnant, first-time mom, experienced mom, a mother with multiple kids — all of them differ in their purchase behavior and need to be treated differently.
A ‘one size fits all’ solution will not bring you loyal customers.
Pregnant and First time mothers build the strongest purchase power at the beginning of a parent lifecycle!
Pregnant and First-time mothers are bringing an important value to Mumzworld reward system since they spend the most on Baby & Child essentials and necessities at the beginning of their Parenthood. They are the potential leader moms and encourage them to further advocate for your brand and referrals.
Moms want recommendations from their friends
Moms are passionate about their kids. And what happens when people are passionate? They’re more likely to make recommendations and help others. The proof behind this statement comes from an MNI’s research on marketing to Millennial moms: “Nearly 75% of millennial moms say they are often sought out by friends for recommendations, and in an average month, a Millennial Mom will recommend products or services online 10.4 times.” So setting up incentives for moms who recommend your brands through a loyalty program, noticing who is recommending you, and rewarding them for doing so: it’s a perfect way to monetize these opinion leader moms and encourage them to further advocate for your brand.
One challenge for brands is to realise that there is no ‘one size fits all’ solution when it comes to communicating with mothers. Pregnancy and birth is the point of market change.
Step 02 | Loyalty Program Market — What others are doing and what can we learn from them?
In the loyalty world, Starbucks has consistently been cited as having one of the best rewards programs around with a very loyal following — and that has also been the model for other rewards programs among restaurant and retail chains. Taking Starbucks as a successful story — the key was to individualize and optimize offers for each Rewards customer in numerous ways using dynamic actions and dynamic rewards.
Uber, Google Playstore, Lyft, Pampers, Huggies, North Face, Sephora, The Body Shop and many others are having success due to their personalization and optimization for each customer. Another reason for their success is frequent communication.
- Sending reminders
- Reward them with messages
- Personal addressing
- Gamification is keeping customers coming back
- Simple “How it works”
- Understandable Program
- Wording — Using an easy language
Step 03 | Current Loyalty Program Audit — What is working and what not?!
The current Entry Points
My account is basically the main Entry Point to get access to the Loyalty Program. The Home Feed didn’t get any attention, while on a Product Detail Page, the user might get the first time in contact with points per Product. Regardless of users' Status (Silver, Gold, or Diamond) the entry points remain the same.
What are the Areas for Improvement?
Me as a first time registered user I completely missed out any information about the existence of a Loyalty Program. Finding the right spot to search for, I land on an empty Page, which suppose to welcome me to a reward system and keep me loyal to Mumzworld.
Describing in one word my first impression: Sad
- Accessibility
It was very hard to understand the Loyalty program screen and each element plus the meaning and purpose of it. - Difficult Program — Made me feel stupid
I felt I need a degree in mathematics to understand all those numbers on the screen and the connection between them. - Very Technical — not visually appealing
The Loyalty Program screen seemed very technical focus. It doesn’t feel visually appealing. There is no emotional connection to engage. The recent activity emphasises the technical impression. It could be as well a bank history list view. - UX — sucks (sorry for my French)
There is basically no user experience with the Loyalty Program and clear communication about its existence. How to earn and how it work is in general hidden behind a “disabled” felt Button on an empty Reward Screen. Which leads you to a web view Page. Instructions are not clear to guide the user what is next and how actually “ to invite a friend” or “complete a survey”. - Engagement
Completely missing is the communication to the user. Welcoming the user to Mumzworld and Loyalty Program could be a nice start of users journey. Reminders and guidance could help as well to keep users busy and engaged. Newsletter, Push-notification, In-App Modals, etc. are tools to speak to the user and get a response.
More details on the chart below:
People wish to be part of a never-ending journey in their relationship with a company (or a loyalty program), working their way towards incremental benefits and new surprises.
Establish customer loyalty from day one by ensuring that customer experience is taken into consideration for every customer touch point. This includes touch points before, during, and after purchase. Even if you don’t create a loyalty program from the get-go, you can always ensure that each customer has a positive customer experience.
Nichole Elizabeth DeMeré, CMO, Reeview.app
An engagement strategy is needed!
Being loyal now means much more than simply buying a product. A sorts of brand activity is needed.
What are the key principles for an engagement strategy?
- Personalisation
has become essential, so it should be extended to the rewards, the shopping experience, and even how you communicate.
Raja needs a different communication and attention that Karen & Hana - Offer an experience
Saving time is more important than saving money. Moreover, consumers view experiences as being more valuable than possessions. Make sure to simplify the experience and create memorable moments. - Don’t forget about the User
Plan a Loyalty Program by taking into consideration people’s interests and values.
Step 04 | Design Improvements — How to improve the first-time experience with the Loyalty Program?
As mentioned a couple of times, it doesn’t exist a ‘one size fits all’ solution.
A loyalty Program needs to be scalable and adaptable for each Persona type.
A Silver user differs in their needs from a Golden Member.
First impression counts and is important for the success of a Loyalty Program.
How to improve the experience for a first-time user. Registered, Newbie?
- Welcome the user to the Club!
In-app messaging, E-mail, Teaser in the Home Feed - Reminder for the next reward
- Reminder during shopping
In case the user adds items to the wishlist, remind them about their actual Mumz Points and their savings. - Reminder after checkout
Ask the user to write a review about their shopping experience - Reminder after delivery
Once the Product got delivered, ask the user to write a review, or to perform a follow-up order “You might need X, because you bought Y”
Silver Member | Areas for improvement
Don’t offer a first time user an empty State!
If you are invited to someones house, you usually feel amazed about the fact that you got a warm welcome with happiness, joy and gifts. Let your user feel “like at Home”. Offer a comfortable stay and let them feel good.
- Welcome Bonus
A part of an improvement is to give users a welcome bonus: Start new customers off on the right foot with bonus rewards for their first purchase. Not only will they appreciate the immediate reward, but instilling inner momentum will set them up for continuous progress. - Send Reminders
Reminding customers how close they are to a reward goal, you can further incentivise loyalty program participation by leveraging the perception of progress.
The endowed progress effect suggests that if customers feel like they are already on their way to achieving a goal (instead of starting from zero), they are more likely to achieve it.
Silver Status — Old design vs. New design. What we got achieved?
My Account Page
- User Status
Users' status is not clear enough and recognisable. The page got a little update in order to highlight users' Loyalty Status and their existence - Personal form of address
“Hi, Sara, Good Morning Sara” sounds more personal and creates a nice familiarity with communication.
Home Feed
- Welcome Message
The Home Feed got untouched and wasn’t considered as a place to “upsell” the Loyalty Program. Through different ways, the Home Feed offers a smart place to communicate with the user.
1. In Feed Banners
2. Bottom Sheets
3. Pop Up modals
etc.
Member Status Detail Page
- Silver Member
Welcome the user with points. Explain to the user their Benefits and the next steps to engage with the Loyalty program. Let the user stay in the App and don’t let them to a web view Page. Simplify the Program so everybody can understand it, without any mathematical skillset. Make it visually appealing, so you feel proud to be a “Silver/Gold/Diamond Member”
Gold Member
While positive reinforcement helps build new habits, how else can you motivate customers to keep participating in your loyalty program?
The goal gradient effect suggests that the closer someone is to reach a goal, the more effort they will put into achieving it. Help customers reach the next reward tier. Shorten the (literal and mental) distance towards the next goal with bonus points or pre-earned progress to the goal.
A Gold Member is a special Member, it stays ideally with the Brand for a long time. It belongs to one of the strongest purchase power with a huge potential to grow. The difficulty and the challenge are to keep the Gold member engaged and busy and constantly coming back. Not necessary for the Loyalty program.
A gold member needs attention to stay engaged.
What does the New Design approach accomplish vs. the Old Design?
Let the user feel special. Every person liked to feel rewarded and a feeling of VIP. The new Design gives a clear understanding of users' Status and creates a state where the user plan how to earn more and how to get to the next level.
- Give the user a clear status i.e Gold
- Give the user a clear understanding of Available Points
- Good wording communicates clearly the Life Time earned Points, which represent the reason why the user is a Gold Member
- Focusing on earning more points
- The gold user is the Leader Mom who has the experience to recommend Products to new moms and to join
- Section Shop to earn got added to get access to shopping right away. The user sees how many Mumz Points an item has and the possibility to add the item to the basket.
There are even more ways to improve this section:
1. Items from users' wishlist
2. Items recommended based on users' purchase behavior.
(We should know that the Mom has a 2-year-old child. The recommendations should offer products based on Child's age)
- Diamond Banner: let the user know the next reward benefits. Why is it cool to become a Diamond user?
- My Account page got more prominent and labeled based on users' Status
- Users' Activity should be treated as secondary information. Give them access but don’t expose it to your face. Eliminate the feeling of bank history.
Wrapping up
Understanding your customers’ cognitive biases helps you influence them to your advantage, while still giving them something that they value and driving profitable behavior. Understanding each persona's status helped me to find a solution for each member and give them what they might need at a particular stage. Personalization of a loyalty program is the key to a good user experience. The Loyalty Page should offer a spot to earn points. The Loyalty page should be treated as an important entry point to engage the purchase behavior.
Don’t be techy, speak users' language and let them feel comfortable and special. Give them what they want and looking for at the right moment.
I hope you had a nice read!
