Loyalty Programs

Segment-first loyalty: when to target casual buyers with surprise rewards

Segment-first loyalty: when to target casual buyers with surprise rewards

I remember the first time I recommended a “surprise and delight” experiment to a client who sold kitchenware online. They were obsessed with their top 10% of customers — rightly so — but overlooked a much larger group that could be nudged into higher lifetime value with small, well-timed gestures. Since then I’ve started thinking about loyalty programs from a segment-first perspective: not every member deserves the same treatment, and some of the biggest returns come from surprising casual buyers at the right moment.

What I mean by "segment-first loyalty"

Segment-first loyalty is about designing rewards and interventions with a specific customer segment in mind, rather than applying a one-size-fits-all program. For casual buyers — customers who purchase infrequently, have low average order value (AOV), and little engagement — the goal is not to match VIP perks. It’s to create frictionless, timely, value-led interactions that change behaviour without overspending.

Why target casual buyers with surprise rewards?

There are three practical reasons I focus on casual buyers for surprise rewards:

  • Scale: They’re usually the majority of your buyer base, so small changes can move the needle on revenue and retention.
  • Low baseline expectations: Casual buyers don’t expect bespoke perks, so a minor surprise can create disproportionate loyalty and word-of-mouth.
  • Cost-effectiveness: Because their typical spend is lower, you can experiment with low-cost rewards (free samples, free shipping, a small discount) that still improve future purchase probability.
  • How to identify the right casual-buyer segment

    Segmentation has to be targeted and evidence-based. I typically combine behavioural and recency-frequency-monetary signals:

  • Recency: Last purchase 3–12 months ago (window varies by category).
  • Frequency: 1–3 purchases lifetime or within the past 12 months.
  • Monetary: AOV below brand median or low cumulative spend.
  • Engagement: Little to no email opens, low site visits, no loyalty program enrolment.
  • You can refine further with intent signals — product categories purchased, cart abandonment history, first purchase reasons gathered at checkout, or whether they used a promotional code. In apparel, for example, consumers who bought basics once are often easy wins; in DTC beauty, someone who bought a single trial kit is a prime candidate for a surprise refill or sample offer.

    When to send surprise rewards

    Timing is everything. A reward sent at the wrong moment looks spammy or wasteful. From my experiments, the highest ROI moments are:

  • Purchase anniversaries: A small gift or discount around the date of their first purchase rekindles memories and demonstrates brand care.
  • Dormancy triggers: If a customer hasn’t purchased in your typical repurchase window (e.g., 90 days for consumables), a surprise sample or time-limited discount works well.
  • Post-abandonment: Instead of an immediate discount, I sometimes recommend a “surprise” free sample in the next order if they complete checkout — this reduces cannibalisation of conversion-focused emails.
  • Milestone nudges: Reaching a small spend threshold or number of site visits can prompt a surprise reward that encourages conversion.
  • Types of surprise rewards that work for casual buyers

    Not all rewards are equal. I favour rewards that feel personal, offer immediate value, and are easy to redeem.

  • Free sample or mini product: Especially powerful for consumables and cosmetics — it reduces risk and increases the chance of a repeat purchase.
  • Free shipping voucher: Low marginal cost for the seller and a high perceived value for the buyer.
  • Time-limited small discount: 10–15% off to tip a low-consideration purchase; keep it narrow to avoid training customers to wait for discounts.
  • Surprise upgrade: Faster delivery or a small complimentary add-on (e.g., gift wrapping), which feels premium without heavy cost.
  • Exclusive content or guidance: A how-to guide, recipe, or styling tips tailored to their purchase — low cost but high perceived value.
  • How I design surprise reward mechanics

    Designing the mechanics is where many programmes falter. I use a simple framework:

  • Define the objective: Are you trying to reactivate, increase frequency, or increase AOV?
  • Choose a measurable KPI: Activation rate, repeat purchase rate within 90 days, incremental revenue per user.
  • Set eligibility rules: Use clear recency/frequency thresholds and exclude known high-value or coupon-hungry customers.
  • Cap exposure: Limit the surprise reward per customer to avoid over-indexing spend and protect margins.
  • Make redemption easy: No complex codes; preferably automatic application to next order or simple one-click claim in email.
  • Examples from the field

    One client in hospitality used a simple surprise: casual diners who hadn’t returned in 6 months were sent a personalised note with a complimentary dessert voucher redeemable on their next booking. Redemption rate was modest (8–12%) but those who returned spent 25% more and booked on average 1.6x the table size. The cost was trivial compared to the uplift.

    Another example from retail: I ran an A/B test where casual buyers received either a 15% discount email or an invitation to claim a free sample added automatically to their next order. The sample variant drove fewer immediate conversions but produced 3x higher repeat purchase rate at 90 days and a better margin profile.

    How to measure and avoid common pitfalls

    Measurement is non-negotiable. I track incremental lift using holdout groups and attribution windows aligned with product repurchase cycles. Key metrics I monitor:

  • Activation rate of the reward
  • Repeat purchase rate at 30/90/180 days
  • Incremental AOV and margin impact
  • Churn rate among treated vs control
  • Watch out for these pitfalls:

  • Discount dependency: Over-reliance on price incentives will erode margins. Use discounts sparingly and pair with experiential or product-led rewards.
  • Poor segmentation: Treating all “casual” buyers the same ignores nuance. Split by first-time vs lapsed, category affinity, or acquisition source.
  • Over-communicating: Bombarding recipients with announcements about their “surprise” destroys the emotional lift. Keep the gesture authentic and rare.
  • Testing roadmap I recommend

    Here’s a simple phased test I often run:

  • Phase 1 — Small pilot: 5–10% of eligible casual buyers; test two reward types (sample vs small discount) with a holdout group.
  • Phase 2 — Scale successful variant: Expand to 25–40% of segment, refine creative and redemption flow, measure repeat purchase and CAC impact.
  • Phase 3 — Operationalise: Automate eligibility and delivery, add attribution tags to orders, and build into quarterly marketing calendar with budget caps.
  • MetricTarget (example)
    Activation rate8–15%
    Repeat purchase within 90 days15–30% uplift vs control
    Cost per incremental orderLess than Customer Acquisition Cost

    Surprise rewards aren’t a magic wand, but when applied thoughtfully to casual buyers they can unlock a meaningful and cost-effective path to higher retention. The secret is to be precise about who you target, why you’re targeting them, and how you’ll measure success. And to keep the surprises genuine — that’s what makes a casual buyer feel like a valued customer.

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