Creating an evolved loyalty strategy not just an effective program begins with understanding the key components today's customers are looking for.
From our perspective, there are five types of benefits that appeal to a full spectrum of customer needs that range from more rational (or short-term) benefits to more emotional (or long-term) benefits:
Here’s a look at the Top 5 programs that encompass components of each of the outlined benefits above. You’ll see that they go far beyond coupons or discounting items.
Sephora’s Beauty Insider and VIB Programs are set up with a tiered structure. One of the main draws of becoming a Beauty Insider is to redeem points at certain stages for exclusive products. The program provides incentives to continue unlocking rewards by creating an exclusive, highest tier of the program for “Rouge” members.
There is also an experiential benefit to the program where shoppers can join free beauty classes online or at their local Sephora location, along with personalized benefits like receiving shopping recommendations based on their skin tone and taste.
DSW’s program is set up in three tiers: VIP, VIP Gold and VIP Elite. Shoppers can earn points and move up the ladder to unlock even greater rewards.
The program does a great job at personalizing communications, rewards and the overall experience. Communication is especially personalized when it comes to helping shoppers track points, in addition to sending reminders of how they can earn and redeem points. Other personalization efforts include sending $5 to shoppers on their birthday and the ability to share rewards on your friends’ birthdays depending on the tier.
DSW also provides a feel-good benefit by providing the opportunity for shoppers to “give a pair.” This program donates gently used shoes to someone in need based on store location, building community and relationships on the brand side as well as enriching the shopping experience for the program participant.
Starbucks Rewards also takes a similar tiered approach, allowing users to redeem stars for higher-priced products.
The ease-of-use and simplicity is evident throughout the Starbucks App, which houses all rewards, payment options and the ability to redeem stars in one convenient place. There’s a personalized component as well, offering stars for the referral of a friend who joins the program and opts into communications.
Starbucks’ rewards program also comes with the perk of a free birthday drink or treat.
Nike plus provides the most experiential benefits out of the programs on this list. With that, they also provide beneficial partnerships with Apple, ClassPass and Headspace just to name a few.
The more actively shoppers are through the Nike+ app, the more they’re rewarded. Nike provides expert guidance and advice to help users achieve their goals and provides inspiration through rewards and exclusive events tied to achievements.
Users can connect to the sports they love at any time with over 100 on-the-go workouts, weekly challenges and personalized training plans. They also benefit from one-of-a-kind experiences, like priority access to events and sessions.
On top of all of that, Nike+ provides free shipping, member-only pricing, a 30-day “wear, test, try and love it or return” promise, express checkout and more.
In consideration of partnerships, we wanted to highlight a program providing benefits outside of the main parent brand. This program is the most robust on the list here because of its ways to earn and redeem, along with the tiers of membership (Silver Elite, Gold Elite, Platinum Elite, Titanium Elite and Ambassador Elite).
Marriott Bonvoy has smartly partnered with airlines and other hotel brands to pass along special savings to members—who can even donate and transfer their points to other members.
The program provides numerous experiential benefits like free in-room WiFi, exclusive offers, late checkout, gift shop discounts, special reservation lines, complimentary upgrades and more.
Though there are other factors to review when building a loyalty program that is the right-fit for your specific customers, it’s important to consider things like:
The answers ultimately come down to understanding your consumer and taking the approach that fits their wants and needs while being mutually beneficial to your brand and bottom line. Finally, to create a scalable program, your content, messaging and branding strategies are just as important as deciding on the program and reward structure.