Did you know that acquiring new consumers costs five times more than keeping existing customers? Also, did you know that current customers are 50% more willing than new buyers to try a new product from you and spend 31% more?
It doesn’t matter if you currently have (or don’t) a customer loyalty program that encourages consumers to return and do more business with your company. The data above clearly demonstrate the value and impact of such a program.
Our team in PassKit makes sure to stay up-to-date. We analyze and implement all the new techniques and trends to help our customers and readers make the best possible choice for themselves.
You’ll learn everything you need to know about customer loyalty programs in this article, and you’ll see some of the best customer loyalty program ideas to get you started!
What is customer loyalty?
Customer loyalty refers to a customer’s desire to regularly do business with a company. That is usually owing to their positive and memorable experiences with that business. One of the most important reasons to encourage client loyalty is that loyal customers can help you develop your business more quickly than your marketing team. There are various other reasons why client loyalty is so important to your business’s success.
What is a customer loyalty program?
A customer loyalty program, by definition, is a marketing strategy that identifies and compensates customers who buy or interact with a brand regularly. For example, customers may be awarded points or incentives when they purchase more, and customers may progress to greater degrees of loyalty as a result.
According to the fifth annual “ State of Marketing “ research study, marketers’ use of consumer loyalty program platforms will rise by 80% within the next two years. In addition, 63% of high-performing marketers are currently using loyalty program systems.
The rewards and perks frequently lead to the customer becoming a more frequent shopper or, in the best-case scenario, a brand advocate. Free stuff, awards, coupons, or insider goodies like early access to new products are all possible advantages.
However, discounts aren’t the only benefit of customer loyalty programs. They provide clients with accurate and appropriate offers based on their purchase history and data provided by the customer, and they improve the overall customer experience.
By developing unique collaborations with related firms, companies can expand their client base and provide even more enticing rewards!
Companies may be hesitant to provide free extras, but it’s a tactic that doesn’t have to be costly. According to studies, clients that participate in customer loyalty programs spend up to 18% more than other consumers.
According to research, 95% of customers feel that trusting a firm boosts their loyalty. Furthermore, according to studies, 91% of customers think their trust in a firm encourages them to buy more regularly.
Why are customer loyalty programs important?
Now that we’ve covered some of the burning statistics and the broad definition of a customer loyalty program, let’s see some advantages it has for brands:
- Greater customer retention: Customers today make purchasing decisions common values, interaction, and their whole experience with your business, not just pricing.
- Increased customer referrals: Customers who are happy with the benefits of your customer loyalty program will tell their family members and friends about it.
- Efficiency in terms of costs: It is more budget-friendly for your company to keep happy consumers rather than constantly churning and acquiring new ones.
- Content created by users: Happy customers who are encouraged to leave reviews and ratings on websites and social media become genuine brand advocates.
An excellent foundation for an effective customer engagement strategy can be a helpful customer loyalty program. Customers benefit from exceptional discounts and products personalized to their specific requirements and interests, while your company benefits from lower churn levels, more organic recruitment, and increased profitability.
Moving on, we are going to take a look at some of the most successful customer loyalty program ideas, how companies incorporate them, how they function, and more!
Successful customer loyalty program ideas
With the ongoing pandemic, many company giants have decided to move forward with technology and try everything digital, including loyalty programs! It not only makes it easier for the companies to manage such programs, but it’s also a lot more convenient for customers since they don’t have to go to the store and risk getting infected. Not only that but going digital saves a lot of time, money and makes the whole process a lot smoother.
1. Sephora’s Beauty Insider
No loyalty program article is completed without mentioning Sephora for a valid reason. One of the finest examples of tiered, point-based loyalty programs is the company’s Beauty Insider. They credit their achievement to the Sephora Beauty Insider digital loyalty card, which was also a physical card with a $37.2 market worth.
Customers can move up from “insider” to “VIB” to “rouge” by earning one point for every $1 spent in the business. Even if users don’t shop at Sephora, being an insider – that is, joining Sephora’s loyalty club via their email – entitles them to some of the benefits. Sephora can then target them with “member-only” specials and special offers in the future.
The Sephora rewards program is more than just a way to get discounts by spending money. Birthday presents, exclusive events, promotions, and product releases are among the company’s perks. In addition, members of Sephora’s loyalty program can use their points for discounts, retail credit, and prize entries.
Sephora enables you to purchase your favorite items using your points on a platform called “Rewards Bazaar.” They also include some of the products available for purchase in this notification email:
However, that isn’t your only choice. You can even join a giveaway with your points for a chance at winning up to $50,000. Sephora keeps you involved and its brand top-of-mind by offering you various ways to redeem your reward points – whether you buy from the company right now or not.
The diversity of choices available for users – both in terms of earning and redeeming rewards is one thing you can take away from Sephora’s loyalty program.
2. Starbucks Rewards
Starbucks is leveraging its loyalty program and technology to boost sales, engagement, and weather the storm as economies slowly recover from the COVID-19 pandemic.
23.4 million users aged 14 and over will use the Starbucks app to make a transaction at least every six months, making it one of the most popular mobile apps ever. That’s 1.4 million more than Apple Pay and twice as many as Google Pay will receive.
Thanks to the app’s simplicity, users can put a set amount of money onto their smartphone, which can then be used to pay for things in-store. Customers can also order and pick it up from their nearest store using their smartphone. In addition, customers earn “stars” for every mobile transaction, which may be redeemed for free drinks or other goodies.
Customers can earn the following rewards with their Starbucks stars:
- 25 stars: Make your drink personalized (espresso shot, dairy substitute, syrup, and more)
- 50 stars: A cup of freshly brewed coffee, a pastry item, or a cup of hot tea
- 100 stars: Handcrafted beverage, a cooked breakfast, or a dessert
- 200 stars: Salad, nutrition box, or sandwich for lunch
- 400 stars: Choose from a variety of products or brew your own coffee at home
Starbucks decided to improve income from its loyalty program by tailoring offers to individual customers. Their ambition was to progress from standard segmentation to personalized digital targeting. Starbucks employed the Formation Offer Optimization Platform to provide millions of tailored offers to My Starbucks® Rewards members to meet their aims.
If your store can support a loyalty app, it might be a terrific method to collect and organize consumer data. On the other hand, an intelligent point-of-sale system may assist you in managing the majority of the same data.
Want to design and start your digital loyalty program? PassKit’s web application helps your creation come to life; you can quickly design and launch your loyalty program. Try it out now!
3. Anthropologie’s AnthroPerks
A strong landing page should not be overlooked if you’re thinking about creating a client loyalty program for your company. Although there is no one-size-fits-all recipe for a successful rewards program site, it should have the following elements:
- Create an exclusive atmosphere to entice potential members
- Explain the advantages of joining the program in detail
- Answer questions before they arise in the thoughts of clients
AnthroPerks, Anthropologie’s loyalty program, meets all of the criteria mentioned above.
To tackle the buyer’s price worries, the company greets you with the CTA “Sign up – it is free” above the fold when you reach the AnthroPerks landing page. Then, after emphasizing that AnthroPerks is not a for-profit loyalty program, the firm goes over the advantages of joining the program one by one.
Each box symbolizes a member benefit, ranging from “all-access” access to specials and new products to persuasive incentives like free shipping for a year. While several e-tailers claim to offer similar perks in their rewards programs, the last box is unique. Ease of joining is listed as a benefit by Anthropologie.
While it may not appear to be an advantage, it is significant since it indicates that you will not be required to fill out lengthy documents with several stages to joining AnthroPerks.
There’s also a section dedicated to frequently asked questions. To answer any questions you might have, the business restates that AnthroPerks is a simple to enter and free program.
Once your birthday comes, Anthropologie provides you a birthday deal, as stated in perk #2:
The company asks you to congratulate you with the headline “It’s YOUR day!” and adds that this is a “members-only birthday treat.” This smartly reinforces the importance of being a member of Anthropologie’s loyalty club.
The corporation reminds you that becoming an AnthroPerks member pays off with emails like the one above. The success of Anthropologie’s loyalty program is based on how well it follows through on its promises, which include emails with special discounts and birthday bonuses.
If you have a customer loyalty program, don’t just think about acquiring new members; also, consider engaging and keeping current members with appealing offers.
4. Abercrombie & Fitch’s myAbercrombie
Compelling copywriting skills should be your closest companion if you want to create an appealing loyalty program. But, in the end, the sentiments of participation and exclusivity are at the heart of reward systems. It’s a membership-based, confined club that offers particular privileges to its members, whether paid or not.
However, this is only valid if your loyalty program is positioned as such. One of the firms that did this ideally is Abercrombie & Fitch. MyAbercrombie, the company’s loyalty program, employs strong wording to emphasize exclusivity:
It claims to be a rewards club that makes your life easier by providing “extraordinary benefits,” “exclusives,” and other perks. And as a user, you are “rewarded” for your participation. (Note how A&F emphasizes the benefit of entering myAbercombie through repetition.)
It becomes even more “restricted” when you learn more about the firm’s loyalty program. For example, A&F has a VIP area, designed in gold and highlighted with strong copy and standard privileges.
Once you’re a VIP, you get even better deals, unique experiences, and access to exclusive gatherings. A&F even pledges to make your birthday a huge deal. To increase your position, all you have to do is spend €600 every year. A&F’s loyalty program has only two tiers, unlike most of the other cases in our article. They have a Member tier (free to join) and VIP (spend €600).
The program is made much easier by the free and VIP tiers. It’s also simpler to distinguish between the two, enticing you to spend €600 and get gold status. In addition, A&F sends you a monthly account overview that visualizes your progress.
A&F’s email is tempting, thanks to the innovative usage of a progress bar. Furthermore, the company includes your membership status and present points on top of every message. Abercrombie & Fitch certainly understands the value of their loyalty club members. On your membership anniversary, you enjoy yet another special discount!
Even if you’re only starting a loyalty program and don’t have a foundation yet, you can use this email as an example of how to show your appreciation for your consumers.
5. The Sill’s Green Rewards
Fashion and beauty e-tailers are big on loyalty programs, but they’re not restricted to those fields. One of the most simple and fascinating reward systems is found on The Sill, an e-commerce site that sells houseplants.
To begin with, Sill’s loyalty program is known as Green Rewards. It’s a trademarked and one-of-a-kind phrase. The first sentence above the fold starts with a 15% discount, immediately motivating your subscription. In addition, Sill’s reward program includes a welcome deal, which is popular in e-commerce.
You register, gain points, and unlock additional levels as you buy more as part of a tiered scheme. Green Rewards tiers are decided by your yearly shop expenditure and can go all the way up to VIP status, which they refer to as Very Important Plant Person.
VIP loyalty members receive priority customer service in addition to welcome deals and birthday presents. That is something rarely seen in an e-commerce loyalty program.
Sill’s loyalty program also distinguishes itself from other e-tailers regarding earned points. Not only does buying get you points, but so do entering your birthday, following the brand on social media, registering for the newsletter, and other activities.
Observe how friends referrals can win you 500 points out of all listed. That is an excellent method to connect your referral and loyalty programs. So you not only keep your present clients loyal to your brand, but you also assist them in bringing in new ones.
The Sill allows you to exchange your points in one of two ways:
- For free items
- For a dollar discount on your next purchase
Nevertheless, to receive a free item with your points, you must purchase at least one additional item, providing the corporation with several opportunities to upsell and cross-sell. The emails of Sill are also interesting to look into. Particularly the one below, when they explain the loyalty program and encourage their subscribers to participate.
The main goal of the email, which has the headline “Join our Reward Program (with a reward!),” is the welcome discount. After grabbing their users’ attention with the present, they explain how simple joining is and how every dollar spent unlocks special rewards.
It’s a simple yet efficient method for converting email subscribers into loyalty members. It’s also a great model to follow if you plan to launch a new loyalty program!
6. The North Face loyalty program
The North Face, a clothing and outdoor gear company encourages members to earn more rewards by redeeming them in various ways according to their needs.
Clients can earn points through the XPLR Pass program in various ways, including participating in The North Face gatherings, checking in at specific places, and installing the The North Face app. In addition, consumers can employ points toward a unique tourism experience, such as a mountain climbing excursion in Nepal, when it comes time to redeem awards.
The North Face’s rewards do more than just encourage customers to buy more; they speak directly to their target audience. They aren’t simply product discounts; they are tailored experiences that strengthen the emotional bond between the consumer and the business.
While funding an Alaskan hiking trip may be out of your budget as a small business, you can still establish a loyalty and reward program tailored to your consumers and strengthens your relationship!
7. DSW Rewards
DSW has long had a typical VIP loyalty program that awards customers with points for every purchase and offers tiers of prizes that consumers can activate as they spend more. The application runs without a glitch. Customers don’t need to remember a loyalty card because DSW’s online system knows them by their name, mobile number, or payment information.
When rewards get automated, there’s a risk that clients will lose track of the program. Consumers who forget about the loyalty program are less likely to spend more to receive more rewards. So DSW wanted a solution to keep customers involved in their program and notify them of their status and the rewards they might achieve by spending more at DSW shops.
The amount of personalization was what made the campaign so effective. A loyalty program, such as DSW’s, gives the company access to a wealth of client information. DSW used this to create hyper-personalized and valuable messages, which are an innovation from the basic email messages that sit in clients’ inboxes.
8. BOXPARK Black Card
This trendy loyalty card was developed with the help of PassKit. It’s a cost-effective alternative for smaller businesses that don’t want to spend a ton of money on rewards app maintenance like Starbucks yet want a functional and appealing solution!
The BOXPARK Black Card is a membership program that offers a variety of discounts and benefits at its various locations. Furthermore, when you sign up, you’ll receive instructions on how to get your first drink for free in your inbox.
They include the following membership perks:
- Entry to all BOXPARK venues
- Black Card loyalty points
- Priority registration for events
- Drink offers at BOXPARK bars
- Street food offers with select traders
- Shopping offers with select retailers
- Offers across leisure activities
To reward their Black Card loyalty members, they’ve made a new points system to the Black Card so that the customers can now earn the points and spend at the bar, getting a discount on their favorite drinks.
If we take a look to see how this loyalty program works, it is pretty simple. Customers have to scan their card at the bar when they order, and they get one point for every pound spent. In addition, when consumers use the order to table service (which is done on the smartphone app), their points will automatically be added to their digital wallet every time they make a purchase!
You can even see how easy it is by watching this video.
Now that we have these fantastic loyalty program ideas listed let’s see the steps you have to take to build a loyalty program and retain your customers.
How to increase and maintain customer loyalty
More companies recognize the need to launch their rewards programs as recruitment costs rise and competition increases. Points programs are the most popular rewards program, with straightforward earning and redemption methods and simple designs. Most people’s most prominent concern, though, is where to begin.
We are here to help you get started by following the tips presented below!
1. Set the goal
A boat without a compass will spin in circles. The same would be valid for loyalty programs: before going on your adventure, define a precise goal to ensure you get to your destination. Since metrics are simply measurable, adopt them to track your development. To keep your rewards program on pace, determine how much you want to improve your repeat buy rate, average order value, or purchase frequency.
2. Decide how customers earn points
Decide how clients will earn points toward prizes in your program after setting your goals. It’s critical to give your members various ways to earn points. This will keep them interested in your brand and encourage them to learn more about it.
The best method to keep your consumers engaged is to reward them for taking beneficial actions. For example, what are the most likely topics of conversation for them? What is their relationship with your brand? By having these questions in mind, you can easier decide how your users can earn points. Some of the examples of when to reward your customers are the following actions:
- Celebrating a birthday
- Making a purchase
- Setting up an account
- Using social media to interact with your company
- Reviewing a product
3. Determine how you’ll reward your customers
One of the most critical phases is to choose the prizes you’ll give, as they’ll be the driving factor for your consumers to gain points. Don’t make the usual error of assuming that customers are simply interested in earning points; rewards are what inspires them!
To increase the likelihood that your consumers will find your rewards appealing, provide them with a wide range of options. Put yourself in their perspective: would you continue to participate in a loyalty program that rewards you with 5% off coupons, although they often conduct 25% off events? Probably not. You would find minimal benefit in a program with that reward system.
Offer these incentives to encourage your clients to gain points:
- Free products
- Money discount
- Percentage discount
- Free shipping
Make your loyalty program enticing to customers by providing valuable prizes that they can’t turn down!
4. Personalize your loyalty program
Starbucks knows that branding your loyalty program helps it feel more connected to the rest of your company and makes it easier to recall. So Starbucks has turned its loyalty program into a brand, making it one of the world’s most well-known and efficient digital coffee rewards programs.
You can ensure that your clients remember your rewards program by paying close attention to these details. In addition, establishing a memorable name and aesthetic will allow you to develop a program that stands out from the crowd, from the title to how you design your loyalty program and loyalty cards.
Use these tactics to keep your consumers coming back for more:
- Give your program a catchy title
- Give your currency a catchy name
- Design using effective colors
- Include graphics that are relevant to your loyalty program
That sounds great! But where to start? And how can you actually make everything you need without spending so much time on research and tutorials? Well, PassKit has an answer for that.
Use PassKit loyalty platform
PassKit is a software that allows businesses of any size to take advantage of their consumers’ experience with Apple Wallet and Google Pay. It made everything easier by going full-on digital during the worldwide pandemic!
PassKit assists you in rewarding customers and making a connection between their online and offline activities. It provides the simplest method for converting physical store cards and coupons into digital passes that your consumers can keep and use with their built-in digital wallet without downloading an app.
Apple Wallet and Google Pay Pass are frequently used to create digital loyalty cards. With just a few swipes and taps on their devices, your customers can accumulate points over time, see all of their rewards in one location, and utilize them in real-time when they’re in your shop, café, or restaurant.
Click here to get started with your design in just a few steps!
PassKit gives you all you need to advertise and deliver your digital loyalty cards once you’ve created and launched your program.
- You can add a list of customers’ emails to PassKit if you already have one. Then, your clients will receive an email containing their unique digital loyalty card.
- Use the PassKit enrolling link on your website and social media pages to get more people to register.
- Additionally, PassKit gives you a QR Code that you can print and use in-store to allow customers to join up for your loyalty program while they are in your store.
Why use PassKit?
Local firms are developing loyalty programs to grow their business and increase client loyalty. If you run a coffee shop, a beauty salon, a motel, a catering company, or any other small business, PassKit can help you keep or win new clients by offering customer benefits.
Here are some more compelling reasons to use PassKit:
1. Safety due to being contactless (great in pandemic times)
2. Saving the trees (no paper use)
3. No need to design and print anything
4. Save time – you can set it up in minutes
5. You can connect your app (PassKit) with your CRM or POS, so all loyalty data is trackable and easily accessible
A rewards program is not a mechanism that shoots out free money at the stroke of a button, no matter how much you wish it were. You may, however, establish a program that efficiently and consistently creates client loyalty through continuous experimentation and improvement.
Loyalty programs have proven to be an efficient approach to increase customer retention rates, improve customer lifetime value, deliver excellent customer service, and inspire brand loyalty during the previous decade.
While the traditional punch card has its position in some organizations, a unique digital approach to customer loyalty programs can provide significant value to your brand. We hope that you’ve liked our eight customer loyalty program ideas as well as our mini-guide on how to start your own program. So what are your thoughts? With PassKit, you can start right now and receive outstanding results. Give it a try!
1. How do you create a customer loyalty program?
To create a customer loyalty program, you must first determine the current level of customer satisfaction and then define goals and budgets based on that information. Then decide which clients to target and create techniques to persuade them to make a purchase. Finally, employ customer loyalty software to provide awards and stimulate limitless customer transactions.
2. What makes a good loyalty program?
Every good loyalty program has rewards. The rewards must be useful to your target consumer, whether they are free merchandise, VIP service, special perks, or money rewards. Popular or new items are a wonderful place to start when deciding what rewards to offer.
3. What customers want in loyalty programs?
Many people join loyalty programs to receive gifts. Customers, on the other hand, want exclusivity and the best service. Customers desire exclusive entry to sales, greater priority service, and enhanced status in addition to freebies and discounts.