Loyalty reward program secret

The more a customer buys or engages with the brand, the more rewards they earn. Companies can offer points or benefits to customers. And in return, they redeem points for discounts, free products, rewards, or insider perks. The goal is to motivate repeat purchases and build trust between customer and business. A recent poll from Yotpo revealed that people will go the distance for brands they love. The study also found that people want more than free shipping and discounts.

They want early access to sales and new products too. Be it discounts, sales, early access, etc. But the payoff for having rewards programs are huge:. But not every loyalty program is the same. There are different types of rewards programs you can use to build customer loyalty and make repeat sales. Points programs are the most common type of rewards programs. They let customers accumulate points they can redeem for freebies, cashback, perks, etc.

They can also earn points from sharing on social, leaving reviews, having a birthday, or through gamification. Bodycare retailer Blume uses a points system called Blume Bucks in its loyalty program, dubbed Blumetopia. Customers can earn Blume Bucks by following the brand on Instagram, placing an order, or telling friends about Blume. Tiered loyalty programs are a type of membership where customers get different benefits depending on their rank.

Businesses often rank membership into groups depending on certain metrics like sales or engagement. These rewards programs give customers a goal. Bra and underwear brand ThirdLove uses a tiered system for its program, Hooked Rewards. Customers simply sign up for the program and start getting rewards right away.

The more they spend with ThirdLove, the more perks they get. This tier receives more benefits, like free underwear with purchase and exclusive seasonal offers. Paid loyalty, or fee-based loyalty programs, give customers immediate and ongoing benefits for a participation fee. These fees can be recurring or one-time.

Paid programs may need to require proof-of-value to get signups, but the business can gain higher customer value from members. The most common example of a paid loyalty program is Amazon Prime. While it seems like a hard model to mimic, paid loyalty can suit many different business models. The idea behind a value-based loyalty program is to connect with customers on a deeper level. It involves donating a percentage of purchases to charity or welfare programs.

But it holds a special place for them, as the rewards are used to benefit society. Visa's credit card cashback rewards is an example of this. Tiered rewards program : A tiered rewards program offers customers deeper discounts or perks as they climb up the ladder — generally achieved by spending more money on your brand. Starbucks uses this approach in conjunction with loyalty points, giving users more discounts and unique perks as they climb each tier.

Community-based loyalty programs : A community-based loyalty program is usually offered with another type of program, connecting customers with a localized group of like-minded shoppers. For example, Sephora gives discounts and has a community for user-generated content and conversations.

Subscription programs : A subscription program is different from the others on this list as it charges your customers a fee. A subscription program benefits customers immediately for being paid members, like Amazon Prime's free shipping and streaming services.

Why loyalty programs are important Loyalty programs are a powerful form of marketing for many reasons. But a loyalty program can do that and all of this: Drive repeat customers : Loyalty programs are all about rewarding repeat shopping, so it's only natural they drive repeat customers.

Think about a place you enjoy shopping. There's a good chance there's some kind of rewards program attached that keeps you coming back. Build brand loyalty : Repeat shopping and customer appreciation build brand loyalty over time. A quality rewards program can go a long way and give customers a reason to choose your company over a competitor.

Attract new customers : Just as rewards programs build brand loyalty, they also attract new customers using those same satisfying perks. Enhance your omnichannel marketing strategy : Omnichannel marketing helps you reach your customers wherever they are, whether online or offline. A loyalty program is an integral part of this experience. It can reward people for shopping at your physical locations if you have any and online, seamlessly promoting your brand in all its forms.

Increase customer lifetime value : New customers almost always cost more to acquire than retaining existing ones. A quality loyalty rewards program will keep people with your brand longer, thus increasing their overall customer lifetime value.

Drive customer engagement : Loyalty programs can drive customer engagement, especially if gamification is involved. Starbucks is an excellent example of this, as it often has events that involve loyalty members, and rewards those who participate.

How to create a customer loyalty program Customer loyalty programs don't happen overnight. This not only turns members into brand advocates but helps to improve the post-purchase customer experience as well. MIT Sloan also found that customers equally value loyalty rewards programs that allow them to accumulate points over time for a big reward but also earn points fast enough to quickly spend on small rewards.

Collect and leverage your customer data to make personalized rewards. Starbucks, for example, requires members to order and pay with their app. By centralizing customer transactions, they are able to collect data on customer preferences and behavior to later offer personalized rewards for go-to drink orders, frequently visited locations, and seasonal favorites.

In fact, Retail Dive reports that more businesses are beginning to launch customer loyalty programs with a fee. As Matt Schultz, senior industry analyst at CreditCards. Barnes and Noble, for example, has long charged the members of its rewards program. Not every customer loyalty program has to offer a monetary reward. Sometimes, doing the right thing can be incentive enough for customers to pledge loyalty to a brand.

The Salesforce State of Marketing report found that two-thirds of customers are willing to invest in brands that take stances on social and political issues they care about. TOMS, for example, uses its customer loyalty program to make a difference on a global scale. For the most part, emotional connections are created through shared positive customer experiences and a sense of belonging and understanding. In this study, Schwarz explained that:. Customers offer you repeat business, and you show gratitude by offering them a reward — this is something that will keep them coming back to your store from time to time.

There are many reasons why customers churn. Considering how much you would have spent to acquire them, losing customers is always costly. But there are no two ways about it: if a customer has strayed, you have to give them a reason to come back. Nothing entices customers to spend like a good deal, so consider using loyalty programs to lure inactive customers. You can send a win-back email campaign just like SpiritHood does as mentioned above. If you really want customers to come back, make sure that the deal you are offering them is worth their time.

You can do this by leveraging historical data, personalizing your offer, and offering relevant incentives that encourage inactive customers to find their way back to your store again. In fact, knowing why customers left is your best tool for knowing how to make them give you a second chance.

A loyalty program is a competitive strategy and, as such, it must meet certain criteria. He is passionate about marketing strategy, digital marketing, content marketing, and customer experience optimization. If you enjoyed this post, please consider subscribing to the Invesp blog feed to have future articles delivered to your feed reader. Get a Copy. Do loyalty programs work?