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Whether they’re hanging on your keychain or waiting for you in your mobile wallet, there’s a good chance most of your loyalty cards haven’t been put to good use in months. As of 2014, there were more than 3 billion loyalty program memberships in the United States—that’s an average of 29 programs per household, according to loyalty marketing research firm Colloquy. Though 83 percent of consumers say they belong to at least one loyalty program, 58 percent say they don’t actively participate in most of their memberships. In fact, most individual consumers use about six on a regular basis. 

It’s no secret that consumer expectations have grown in nearly every aspect of business, and loyalty programs have not been immune to this trend. Incentivized programs that reward consumers with points, miles, discounts, and cash-back offers are the most popular, but with dwindling engagement rates, even these have gone stale. Still, reinvigorating them is not impossible, experts agree. Give new life to a tried-and-true approach with these 10 tips.

1. Don’t underestimate the element of surprise

The rewards that customers earn through traditional loyalty programs are extrinsic, meaning they are tangible and received for accomplishing something. “Earning free food, getting cash back, or even receiving coupons and discounts all represent extrinsic rewards, because they have physical value in the real world,” Ben Parr, venture capitalist and author of Captivology: The Science of Capturing People’s Attention, says. Though these kinds of rewards can be effective at motivating consumers, Parr says intrinsic rewards, or those that activate emotions of happiness and satisfaction, are typically more powerful. 

To leverage the potential of both, brands should inject drivers of intrinsic rewards into existing programs. For example, offering surprise rewards in addition to or instead of earned rewards can boost engagement significantly. “People love [being] surprised. Surprises stimulate those feelings of excitement and happiness that are linked to intrinsic rewards, and the chemistry of those feelings makes customers more loyal and more engaged with the loyalty program and the brand,” Parr says. There’s also the added mystery of not knowing when the next reward will come, which keeps customers coming back.

2. Enable and encourage social sharing

Today’s consumers are social—they want to stay connected to friends and family across all of their online and offline experiences, and loyalty programs that enable them to share rewards are becoming increasingly successful. But points sharing isn’t just a practical solution for consumers; brands benefit as well. “Giving points away is another way to trigger a feeling of intrinsic reward. Just like we loved having someone share our crayons with us in kindergarten, we love having people share rewards with us. As humans, we crave those interpersonal interactions that make us feel connected to others, and we’ll keep coming back for them again and again. When we come back,” Parr says, “brands win.” 

A company called Points is among the pioneers of reward-sharing solutions, and works with a number of major airlines, hotel chains, and retailers to facilitate their rewards platforms. “Point transferability was the foundation of our company, because that social component is so important to consumers. It’s rewarding for people to be able to share their hard-earned points or miles, and once they’ve earned them, they’re theirs. They should be able to do whatever they want with them,” Points President Christopher Barnard says. Companies such as United Airlines and Hilton Worldwide use the Points platform to allow point transfers on their Web sites.  

Mobile game developers have zeroed in on this phenomenon, too, and have integrated reward-sharing pathways into their apps. Popular games such as Farmville and Candy Crush, for example, encourage players to ask Facebook friends for “lives” or other game perks. In fact, it’s one of the few ways that players can avoid paying in order to move ahead in the game. “By allowing players to give away or obtain lives from their friends, you’re giving them autonomy, which creates a more positive experience than having them pay to progress in the game. Ultimately, the brand behind the game benefits anyway,” Parr says, “because the players keep playing.” 

3. Tap Into Cause Marketing

Though giving customers the option to share rewards with friends is a solid strategy for improving loyalty program engagement, providing customers with an opportunity to use their points to help those in need can be an even more promising approach. Partnering with organizations that support disease research, help victims of natural disasters, or provide funding for other causes humanizes brands and demonstrates that they care about those around them, which attracts customers. 

Forty-two percent of American consumers say they are willing to pay more for products and services from companies committed to having a positive social and environmental impact, according to a 2014 Nielsen study. There are different types of cause-related loyalty programs. Footwear company Toms, for example, uses a one-to-one donation model, meaning it donates a pair of shoes to someone in need for every pair that’s purchased. Hilton, on the other hand, allows members of its Honors Rewards Club to convert their points into monetary donations to charitable organizations. 

No matter the specifics of the strategy, incorporating cause marketing can have a strong effect. “Talk about an intrinsic reward! From an emotional standpoint, there are few things that make customers more loyal to a brand than knowing that together, they’re helping someone in need,” Parr says.

4. Determine customer potential, and personalize accordingly

Even the most loyal customers have different spending potentials, and to maximize the benefits of individuals’ spending power, companies should build a fluid loyalty program that is tailored to consumers’ specific buying habits. To determine customers’ potential, brands have to look at their best historical activity—for one customer, that might mean 10 purchases in a certain timeframe, but for another, it may mean five. 

“Once you understand that potential, you can start creating more personalized programs that reward customers for their loyalty in a way that correlates with their buying behavior. In other words, if a customer’s highest potential is eight purchases per month, offer a reward on the ninth purchase,” Andrew Robbins, president and cofounder of Paytronix, a company that builds loyalty programs for restaurants, says. By personalizing the rewards structure to reflect customer behavior, brands not only avoid losing customers who feel as if they aren’t benefiting from the rewards program because of the high threshold, but also avoid losing money by not giving out rewards to customers who consistently surpass that same threshold. 

5. Reach across channels

With the growing prevalence of smartphones, companies have jumped at the opportunity to build mobile-friendly, app-based loyalty programs. Thanks to mobile devices, many of the barriers to loyalty card use have been eliminated. Applications such as Apple’s Passbook have enabled consumers to store all of their digital loyalty cards in one place to avoid losing or forgetting one when it is needed; social plug-ins that integrate with popular apps such as Facebook, Instagram, and Snapchat have simplified the sign-up process; and brands’ own native apps have made redeeming rewards more intuitive. But great loyalty programs aren’t built on one channel, Jim Davidson, head of research at marketing automation platform provider Bronto, says. 

Other channels, especially email, have to be in sync with a brand’s loyalty program to promote regular engagement and give customers “a reason to come back to the store or the site and shop again,” Davidson says. This can be a particularly effective strategy for brands that sell products that consumers need to reorder or replace. For example, Shar Music, a company that sells string instruments and accessories, worked with Bronto to launch an automated and personalized email campaign that reminded customers to purchase new strings for their instruments every six to eight months, as suggested by instrument manufacturers. The campaign delivered a 9 percent click rate and a 26 percent conversion rate, but perhaps more importantly, “made customers feel cared for,” according to Davidson. 

Consumers appreciate useful reminders or suggestions, but while mobile technology now plays a major role in loyalty programs, receiving reminders as texts or push notifications can still seem invasive and overwhelming to consumers. “That’s why a cross-channel approach is important for augmenting loyalty programs in between purchases,” Davidson says. 

6. Offer a flexible framework

Whether companies like it or not, most consumers are enrolled in dozens of competing or overlapping loyalty programs—just because a passenger is a frequent flyer on JetBlue doesn’t mean he’s not booking half of his trips with Delta Airlines, for example. For brands, this means embracing an age-old mantra: “If you can’t beat them, join them.” 

The concept may seem counterintuitive, but according to Points’ Barnard, companies that empower customers to convert their rewards into points honored by a competitor succeed at creating lasting loyalty in spite of their willingness to side with the enemy, so to speak. “Loyalty isn’t exclusive, and brands are starting to realize that rewards points are a currency. It fluctuates, it moves from person to person, but it can lose value if no one is using it,” Barnard says. And, as with any other currency, there’s an exchange rate.  

Transferring points between two companies is more complex than transferring points between customers of the same company. Points facilitates the former on its Web site, and enables its registered users to convert miles earned with, say, Alaskan Airlines into United Airlines miles at an exchange rate that can vary from three to one to as high as six to one, depending on how competitive the brands are, Barnard explains. The company is also currently working on an early-stage product that connects its users in an exchange marketplace where they can barter for points, miles, or rewards. “If a customer wants to get rid of some miles, we can match him or her up with another customer [who’s] looking to swap those miles for other rewards,” Barnard says. In this scenario, users would determine the exchange rate themselves.

Points has gained a significant following in recent years—the company has more than 4.3 million users, and Barnard attributes its success to flexibility. “One of the biggest drawbacks of rewards-based loyalty programs is that rewards don’t have any value outside of that specific brand environment. We’re making that belief obsolete. And the brands we work with stand to gain from this as well, because the more value customers attribute to their loyalty programs, the more likely they are to participate,” he says. 

7. Run a clear campaign 

There’s no such thing as being too straightforward with a loyalty program and the marketing content that surrounds it. “Participation in a loyalty program is highly connected to communication,” Rhonda Basler, director of customer engagement at Hallmark Business Connections, the B2B arm of Hallmark Cards, says. Hallmark Business Connections helps organizations launch loyalty and engagement programs, and Basler says that regardless of the program details, clarity is key across the board. 

Experts unanimously agree that Starbucks’ loyalty program is one of the best performers on the market, and the brand’s commitment to clear messaging is a large part of why the program is so effective. The premise is simple—customers can earn a free drink or food item after making 12 purchases at Starbucks locations using their membership card or the Starbucks mobile app. But what sets Starbucks apart from brands that offer similar programs is that while most brands only tout their loyalty programs at the register, Starbucks markets its program all around its stores. 

When Starbucks acquired tea vendor Teavana in 2013, for example, the company launched a marketing campaign to inform customers that the Starbucks loyalty card could now be used at Teavana as well, and that those purchases would also count toward the 12 required for a reward. Signs were displayed in seating areas and on the chalkboard menus, as well as at the register. 

On the mobile side, Starbucks also keeps customers informed about how many points they have to earn before the next reward. The amount is displayed on the home page of the app, so customers don’t have to look for it. “It’s always highly unlikely that customers will go and seek out information about the program actively,” Basler says, “so it’s up to companies to keep customers informed.”

8. Build a rewards program coalition

Increasing awareness is a central driver of loyalty program engagement, and goes hand in hand with developing a clear campaign. A surefire way to generate awareness is to align a brand’s reward program with that of another brand, says Greg Philips, senior vice president of business intelligence at Fuel Rewards. Fuel Rewards works with Shell, MasterCard, and a number of other partners to deliver a cash-back loyalty platform. Together, the brands form a rewards coalition that harnesses the combined potential of their marketing reach.

After enrolling in the Fuel Rewards program online, consumers earn cash by shopping at participating stores, such as Kmart and Winn Dixie, with their MasterCard and then filling up on gas at Shell locations. For every $100 spent, customers receive a three-cents-per-gallon rollback, which is reflected at the next fill-up. “Once customers sign up for our program and link their MasterCard to Fuel Rewards, there’s nothing to redeem or request. Customers see the savings immediately at the pump,” Philips explains. Other promotions occasionally offer customers potential savings of up to 25 cents per gallon. And recently, Fuel Rewards added new ways to earn the rollbacks through partnerships with JCPenney, Toys“R”Us, and Olive Garden. 

“One of the biggest advertising vehicles we have is social media. A lot of our users take photos at the pump of the before-and-after price and share that on Facebook or Twitter, which is a really powerful piece of our marketing,” Philips says. The reason that Fuel Rewards’ platform has caught on so well is that all of the brands that participate are able to cross-promote content. “We’re able to increase awareness because we’ve got a number of major brands all sharing material that leads back to the same loyalty program. The loyalty program has a lot more momentum and draw when you’ve got a combination of companies like MasterCard and JCPenney behind it,” he adds.

But Fuel Rewards partners aren’t the only ones that have embraced the coalition trend. Companies such as Uber and Starwood Hotels, for example, have launched a joint promotion that offers bonus Starwood rewards to customers that link their Uber accounts to the hotel’s loyalty program. 

9. Leverage gamification 

Customers love earning freebies and redeeming cash-back offers, but loyalty programs don’t always have to offer rewards that have monetary value to grow engagement. Gamification is a fairly new approach to loyalty building, but has, so far, proven to be a worthwhile endeavor for brands that find a platform that works for them. 

Gamification-based loyalty programs have the most potential in a knowledge-sharing environment for customers or in an employee community, where a little healthy competition drives users to engage. Wireless carrier T-Mobile, for example, worked with gamification platform provider Bunchball to build T-Community, a gamified employee collaboration network for its customer service agents. The goal was to help employees keep up with the fast-moving mobile technology space by fostering conversation among them. 

Employees who responded to questions or comments in the forum were rewarded with “likes,” points, and badges that could all be used to secure a position on the leaderboard. Though there were no monetary rewards involved, users kept coming back to the community. Thanks to the gamified elements, there was a 96 percent increase in participation, a 583 percent increase in contributions, and a 783 percent increase in responses, according to a Bunchball case study.  

10. Measure impact

One of the biggest mistakes that companies can make is to measure loyalty program effectiveness incorrectly, or not measure it at all. While it’s beneficial to keep track of metrics such as reward redemption rates, Robbins recommends that brands focus on the way loyalty programs are affecting other areas of business. In T-Mobile’s case, for example, the gamification-based platform not only boosted employees’ loyalty to the community, but also resulted in a 31 percent improvement in customer satisfaction scores.

When dealing with a loyalty program in a traditional B2C environment, however, Robbins says there’s an easy formula for measuring impact. “You take the number of customers that enroll, multiply it by the percentage of customers that actively use the program, and then multiply that by their increase in spending,” he explains. That, according to Robbins, gives companies an understanding of “the actual business value” of their loyalty program efforts.

There is no right or wrong way to develop loyalty programs, but brands that tap into customers’ or employees’ emotions, give them flexible and personalized options, and support interactions across connected, cross-channel environments tend to have more success than companies that are reluctant to embrace new trends. Programs will need to continue evolving in response to social and technological changes, and brands that are slow to adapt run the risk of losing customer loyalty. “In this day and age,” Barnard says, “that’s just not a risk you want to take.” 

Associate Editor Maria Minsker can be reached at mminsker@infotoday.com.