When you think of creating loyal customers and loyalty marketing, the first thing that comes to mind is a loyalty program. The easiest and smartest thing to do is look at the best loyalty programs and follow their lead.
They've experimented and they have reached record highs, so why not understand their tactic and see what works for you?
Of course, some loyalty programs can become expensive on the long-term. However, what we are looking at here are ideas. Tips and tricks and food for thought.
The world is filled with industries and sub-industries with more rising each day. Generally, some industries may perform better than others.
Business-to-consumer (B2C) industries fare better when the business has a loyalty program.
Whether your business is in apparel, cosmetics, books, or a supermarket, loyalty programs are an excellent fit for you and your customers.
Check out the list of worldwide loyalty programs for inspiration.
Like anything in business, there's no one shoe fits all or in this case one loyalty program to fit everyone.
That said, and while we have some basic tips and ideas before creating a loyalty program, the following loyalty programs offer insights and ideas that you can use at later stages for your business.
Let's say you have a small business now that you'd like to see grow. A loyalty program helps you with that.
The examples below can give you ideas when your customers increase to 1,000, 10,000 and so on.
Let's start with one of the world's most celebrated loyalty programs or what many look at as the 'best of the best in loyalty programs.'
One of the most talked-about loyalty programs worldwide is done by makeup retailer Sephora.
Their loyalty program, expertly called Sephora's Beauty Insider, is not just about creating loyal customers, it's about creating a loyal community.
Sephora's rewards program is one of the most famous examples of tiered rewards programs. The loyalty program named Beauty Insider comes with three tiers, each with a number of perks. Even their free tier offers enticing options to customers, from seasonal savings events to free shipping options.
Their rewards program also includes birthday gift samples, to several experiences such as Meet and Greet events, point multiplier events and more.
Further reading: Customer Retention Secrets of the 14 Best Beauty Loyalty Programs
As you can see, Sephora doesn't just have an online loyalty program. Its program is about getting people together and using it to attract customers to its stores and events.
The Michael Kors brand has been around since the early 1980's, but its loyalty program KORSVIP came a little later.
Many know the brand for its signature women's handbags and purses, but Michael Kors also makes luxury apparel.
The brand offers customers points for every dollar spent and almost every action taken on their website.
Benefits? Customers earn points for:
"Your benefits and rewards as a KORSVIP member depend on your KORSVIP member status. Your benefits will grow as you achieve a higher status. Just for enrolling, all KORSVIP members receive free standard shipping and returns, private styling and appointments," Michael Kors explain on their website.
The downsides of this loyalty program?
Michael Kors doesn't offer cashback rewards and doesn't allow customers to redeem points for products (which isn't standard practice in loyalty programs).
The loyalty program is only applicable to people in the United States, whereas the brand is present many countries and has over 1,200 stores worldwide.
Another makeup brand, whose loyalty program is often compared to Sephora's, with some saying Ulta has a stronger edge.
Like Sephora, the Ulta rewards program comes with three tiers, detailing the cash-to-points value.
It also offers a free birthday gift (to all tiers), double points during the month of your birthday, $10 coupon for your birthday, free shipping for orders above $25 (for the Diamond tier only).
Customers can also redeem points like cash and on any purchase. They can also enjoy benefits across Ulta's mobile app and in-store.
Austrian jeweler Swarovski offers several loyalty programs including: the Swarovski Club (includes free and paid tiers) and the Swarovski Crystal Society (includes an annual fee).
Their programs don't rely on a points-system but instead rewards customers with discounts and vouchers based on spending goals when they sign up.
When it comes to the world's best loyalty programs, Starbucks's is often a top contender in the United States.
The coffee chain is also well-known for constantly working on attracting customers and keeping them loyal to its brand. In other words, its loyalty program is part of its overall retention strategy to create loyal customers.
In July, Starbucks unveiled more loyalty program options, allowing members to "have more ways to pay for their drinks as the coffee chain pushes to recruit more enthusiastic customers," reports CNBC.
As part of its rewards program, Starbucks offers members a free beverage on their birthday, free in-store refills for coffee and tea.
In addition, the Starbucks loyalty program offers perks like skipping the queue and ordering before getting to the store.
Starbucks' loyalty program enjoys 19.4 million active members in the US as of 29 March 2020, it said in a statement.
Moreover, the coffee chain, which is often seen as a restaurant tech leader, reported higher revenue from its loyalty program members during the pandemic, according to CNBC.
"In the United States, 48% of sales in the last week of May came from Starbucks Rewards members, up from 44% in the quarter ended March 29," CNBC said, citing a regulatory filing.
Athletic wear brand Reebok has a different kind of loyalty program that is often deemed as less costly than a gifts-based program.
Here's what they do: Reebok's program offers VIP experiences, partner rewards, as well as training and wellness programs.
Reebok has two loyalty programs, Reebok UNLOCKED and ReebokONE.
The first is for fans who wish to purchase products, where "accumulated points determine your level, which unlocks an exclusive set of rewards," whereas "ReebokONE" is for fitness professionals.
Both loyalty programs are available in stores across the United States. The programs use a points-system, allowing members to earn points for "any" interactions and transactions they do with the brand.
The more a member accumulates points, the higher the value of the reward they get.
The Swedish retailer for ready-to-assemble furniture, kitchen appliances and home accessories has a loyalty program that offers shoppers a hot beverage every time they visit the store.
"As a member you’ll receive discounts and rewards; we even treat you to a free hot drink every time you visit! You can also expect a few surprises along the way. Because we know it’s nice to feel appreciated," IKEA says via their website.
Despite the constant debate about e-books versus paperbacks, bookworms buy what they need. And many readers find their bookish needs at Barnes and Noble.
Barnes and Noble is one of the leading book loyalty programs out there. It also serves as an example of paid loyalty programs, with an annual fee of $39.99 (previously $25). That said, they also have a free-to-join rewards program.
Barnes & Noble sells paperbacks, hardcovers, e-books, the Nook e-reader, and has a B&N Café in some locations.
French makeup brand Lancôme isn't out of the customer loyalty program game with its tier-based program for loyal fans.
Their points-based tiered program allows customers to earn points for a multitude of actions such as connecting via social media, sharing information with the brand, and so on.
It's also easy to earn points, for every dollar spent, customers get 10 points.
Depending on their tier, customers can get early access to certain Lancôme products, invitation to Lancôme events and parties, among other things.
Remember ice-cream brand Baskin-Robbins?
Well they may not be a common name nowadays with more brands popping up in the United States and across the globe, but the ice cream chain gives customers a free ice cream scoop once they sign up for their loyalty program. Because who can say no to ice cream?
In addition, they are mobile-friendly, enabling customers to pay with their phone, check out the newest flavors, and order customizable ice cream cakes. Yum!
This list of the best loyalty programs can't be complete without a supermarket brand, particularly Target's.
With Target's RedCard, customers save 5% on everything – yes you read that right, everything. Nothing like a constant discount to keep people coming back, right?
Target took a step further by partnering with Starbucks to give its RedCard members a 5% discount on any in-store Starbucks location. Sip while you shop.
In addition to the discounts, the RedCard provides exclusive offers, extra 30 days to return products, and free two-day shipping.
Amazon isn't out of the loyalty program sphere. In fact, their Visa Signature Card is considered one of the top programs in the world.
There are certain requirements for this type of program. The most important is getting Amazon to approve you for a credit card to use on their loyalty program.
“Shoppers will get a […]gift card upon signing up and the card gives shoppers 3% back on every dollar spent on Amazon, 2% back on drugstore, gas station, and restaurant purchases, and 1% on all other items," Sara Skirboll, shopping & trends expert at coupon website RetailMeNot, tells Business Insider.
"Keep adding up the points and use them towards future Amazon purchases, gift cards, or other perks,” she adds.
According to their website, Amazon also offers a $50 gift card once the credit card is approved.
This is list isn't comprehensive by any means nor are brands arranged in any particular order.
However, we sought to highlight what many across the globe think are the best loyalty programs to join.
You can examine the successful ones for inspiration and experiment with your program and brand. Be sure to measure the success of your loyalty program on a regular basis such as each quarter and each year.
Last but not least, when you consider a loyalty program, you need to think of your customers and your industry.
Is your industry among those that get the best results with loyalty programs?
Remember: Loyalty programs are about making people fall in love with your brand, so that instead of wondering where they should shop for a particular product or service, your store would be their go-to destination.