Convincing customers into the brand and making them loyal buyers is not easy. First, you need a predictable and repeatable strategy to encourage them to buy again. And this is where loyalty programs for customers appear. If you manage your activities properly, you will not only gain dedicated customers, but also maintain a flawless image of the brand. How to do it?
What is a loyalty program?
The loyalty program is a marketing strategy rewarding loyal customers who often make contact with the brand. By appreciating repeated engagement, you can increase their loyalty and ensure the continuous development of your business. The idea of an effective loyalty program is that the more loyal customers are, the more bonuses they get.
Point program – The North Face
The point system focuses on a simple principle – the more you spend, the more points you get in return. Each time a customer makes a purchase, he receives a certain number of points depending on how much he has spent. One example of a customer loyalty program that is consistent with the point program is The North Face, which explains its customers how their program works on their website.
Customers earn 10 points for every dollar spent online and in stationary stores, and five points for dollar spent in outlets. Then customers can use these points for future purchases. To further increase customer engagement, The North Face has also created an application where users can manage their account, buy new products, check the status of points and receive rewards. By rewarding customers with exchange points, you increase the average order value of the customer and encourage him to invest in your brand. This means that they are less likely to go to competition.
Use dedicated software, such as Smile.io, to implement your points system both online and offline. Your points system must be easy for customers to understand and calculate (e.g. PLN 1 is one point). In this way, customers see instant value and do not have to calculate the number of points each purchase gives them.
Paid program – Barnes & Noble
Paid programs rely on the principle of persuading customers to pay a monthly or annual fee to join the VIP club. In order for this type of loyalty program to be effective, you must sell it to existing customers or frequent buyers. After all, new buyers are unlikely to join the rewards program unless you are a large, recognizable brand. Most importantly, however, a paid program must include benefits for members only. Otherwise, it will not maintain its value.
Let Barnes & Noble serve as an example. Their VIP program costs $ 25 a year and offers discounts, free shipping and other benefits. How do you encourage people to pay $ 25 for participating in a loyalty program? By showing its value compared to the cost incurred. When the value of your loyalty program exceeds the cost of buying a VIP pass, customers will join. If that doesn’t convince them, you can try to get them by using references from existing members to bring about social proof of equity.
Charity program – The Body Shop
Not all loyalty programs need discounts. You can incorporate business values into the program to build stronger customer relationships. In fact, if you create a loyalty program based on shared values, customers will be more often brand loyal. The Body Shop introduced this approach by incorporating animal care into its program.
In addition to earning rewards and receiving VIP benefits, members have another unique benefit. They may decide to donate the prize to Born Free USA, an animal charity organization. The basic value for The Body Shop is responsibility for the environment, so if customers share this view, then the donation option is even more valuable for them. This type of program creates a unique opportunity to make contact with buyers at a deeper level, which strengthens relationships.
Level program – Elf
The level system focuses on loyalty levels. In other words, the more loyal your customers are to your brand, i.e. the more they buy from you, the larger the rewards will be. Offering levels in the loyalty program is a great way to engage buyers and take care of your brand. What’s more, the levels create the impression of a game where members reach higher levels the more they play.
The Elf’s example is as follows – their Beauty Squad loyalty club has three levels: extra, epic and iconic. The more points a program member has, the more exclusive the rewards can be. If you want to motivate participants to reach higher levels, enter percentages for each of them, indicating how many people have reached each level. This encourages members to climb up to get a higher social status among other participants in this program and give them something they can aspire to.
Progress program – Nike
Progress is a great motivation. The more people think that they are closer to achieving the goal, the more involved they are in their efforts to achieve it. In English it is known as endowed progress effect. This is an effective psychological trigger that can be used in a loyalty program to encourage repeated engagement.
A great example of this comes from Nike, which promotes an active lifestyle. Nike has several different training applications that help members achieve training goals. The Nike Run Club and Nike Training Club apps reward users with badges and other rewards each time they reach a new milestone, such as completing the first 5 kilometers. This is a great example of using progress to increase engagement.
Nike knows perfectly well that the more successful the training of their clients is, the more loyal the clients will be. Why? Because people always combine their success with the person or brand that motivated them. For example, if you want to learn a new language and use software such as Duolingo for it, you attribute success to this platform. Similarly, Nike helps clients get better training results, and their clients attribute these results to the brand and thus builds engagement.
It is important to position your product as a key ingredient in achieving these goals. When it helps your clients achieve their goals or challenges, they’ll do more shopping with you.
Community program – Sephora
Speaking of customer loyalty programs, Sephora cannot be overlooked. It has a comprehensive Beauty Insider loyalty program that offers many different benefits. In addition to using both the point and tiered systems, the Sephora loyalty program also provides members with exclusive access to a community of like-minded people. In this community, people can connect with each other, find inspiration or sign up for special events. The company has used its loyalty club to build a community where users can interact with each other and with the brand. By creating such a platform, the creator has access to a lot of consumer information, which they can use to refine the product, as well as to other aspects of conversion optimization.
Briefly, this technique involves creating a platform where members can interact with others to share ideas, draw inspiration, opinions, and more. This type of program will work for any brand, as long as you encourage discussion about your brand and your products.
Subscription program – Bean Box
The subscription program is a relatively new concept on the market. To increase customer loyalty, Bean Box offers different types of coffee beans as subscriptions, and customers don’t have to worry about running out of coffee. By selling the product as part of the subscription, Bean Box increases the length of commitment of its customers. They’ve been using incentives right from the start, such as “save 20%,” to encourage buyers to choose a 6-month plan instead of a monthly plan. After all, inviting customers to make smaller purchases for half a year is more valuable to the company than when customers make large purchases, but only once.
In this case, the product must match this style of loyalty programs. Consumers are looking for convenience and an automatic purchasing process if they are sure that the product suits them and are determined to stick to the brand. The sooner and easier they can get what they need, the better. You can encourage potential customers to choose a subscription instead of a one-time purchase by offering a discount on your subscriptions.