Top Loyalty Programs in 2023: Guideline for Marketers
Customer loyalty is one of the most effective strategies for boosting sales and developing client devotion to your brand. In other words, this is the practice of consistently supporting an organization and promoting its products and services to friends and relatives.
But how can a business develop loyal customers who will keep coming back despite the price? One might think it is nearly impossible, but statistics prove otherwise. Nearly 56% of program owners are extremely satisfied with their loyalty programs, reporting that they boost sales, provide a solid return on investment, and are well-liked by consumers. Keep reading to learn more about some of the best loyalty programs in different industries like food, fashion, beauty, entertainment, and others.
Innovative Customer Loyalty Programs and How to Start
You should provide clients with a motivation that keeps them doing business with you. Some loyalty companies reward loyal customers with special discounts to increase sales.
Understanding Loyalty Programs
Customer loyalty programs, commonly referred to as product rewards programs, are a method that assists in customer retention and motivates people to stick with your brand. Customers receive more incentives when they spend or interact with the company more. Owners of reward systems usually agree these programs now play a greater role in society. Loyalty marketing significantly influence their company's overall strategic decisions, according to 66.4% of respondents.
The best reward programs, though, go beyond prizes. They focus on the whole experience that the brand offers to its customers. For this reason, we analyzed and compared top loyalty programs in one place.
How Loyalty Programs Work
Companies can reward consumers with bonus points or other benefits through a loyalty program. And in exchange, users can use their points to “unlock” special deals, gifts, and promotions or get access to exclusive offers. The main goals of such programs are to increase customer retention, boost sales, and have a strong client base full of loyal customers.
The general method is as follows:
- The customer purchases something or interacts with a business.
- The business encourages the client to join a product rewards program.
- Using their contact details (such as their phone number and email), customers join the program.
- Special and sometimes unique rewards are given to customers for each purchase made.
In contrast to subscription systems, which reward customers for subscribing, points programs allow customers to exchange their bonus points for discounts or gifts. Numerous companies implement a mix of various customer loyalty program types for better results. Read on to discover more about some of the best reward programs and how they function.
Types of Rewards Programs
You can pick from a wide variety of top loyalty program options. The most popular ones, which companies are already employing successfully, are mentioned in the list below.
1. Examples of Point-Based Loyalty Programs
These are one of the best membership programs that frequently employ a bonus card system. Customers can accrue loyalty points that they can then exchange for gifts and services.
Businesses like Starbucks have gone over and above to differentiate their program from the competition by digitizing them and offering more interesting prizes. Members of Starbucks Rewards can use the app to place orders, pay for them, and even stream music in addition to earning points. This fits in nicely with Starbucks’ brand values and target market, who will be looking for a morning pick-me-up on their way to work or taking a well-earned break from shopping excursions.
Another advantage of membership programs is that they can foster a sense of community and engagement among customers. By offering exclusive benefits and rewards to members, businesses can create a sense of belonging and loyalty that extends beyond just the products or services they offer. This can be particularly effective for businesses with a strong brand identity or a passionate customer base, such as coffee shops or fitness studios.
2. Examples of Tiered Loyalty Programs
Tiered programs are one of the best loyalty cards as they also allow customers to earn points by purchasing specific goods or services. However, the difference is that the customer’s “golden status” for your brand will keep increasing only if they collect enough points. The cosmetics brand Glow Recipe used this strategy.
No matter how frequently a client chooses to make purchases, using tiers in promotions guarantees, they are receiving real benefits. Customers can receive one-time gifts, special discounts, and early access to new products according to their tier.
3. Examples of Paid Loyalty Programs
Paid loyalty programs demand a monthly or annual fee from members in exchange for access to exclusive benefits like special discounts or one-time unique deals. These are some of the top rewards programs that provide your clients with a sense of exclusivity, but for them to be profitable, the benefits have to justify the cost of joining.
Amazon Prime Membership is one of the most popular e-commerce loyalty programs, with over 161 million US customers. Subscribers receive a variety of free delivery options, including same-day delivery, music and video streaming services, and early access to products provided in quick flash sales running on Amazon Prime Day in exchange for an annual membership fee.
4. Examples of Value-Based Loyalty Programs
A value-based program works best for you and your consumers if you are aware of their opinions and moral principles. These programs give clients non-cash incentives, like charitable donations, so you can get to know them better and establish a strong ethical bond.
A well-known footwear manufacturer TOMS has nailed this type of loyalty program with its “Improving Lives” program, which guarantees to donate a pair of shoes to communities in developing countries for each product sold.
In addition to TOMS, there are other examples of companies that have successfully implemented value-based programs, such as Patagonia's 'Worn Wear' program, which encourages customers to repair and reuse their clothing, rather than buy new items. This program aligns with Patagonia's commitment to environmental sustainability and resonates with customers who value sustainability and conscious consumerism.
Best Customer Rewards Programs Examples
1. Barnes & Noble (Paid Loyalty Program)
Customers must pay a $25 annual charge to sign up for this program and become VIP members of Barnes & Noble. The success of a program like this depends on how effectively you promote it to your current clientele. Focus on your current customer base since new customers might only be interested if your brand is recognizable. Another critical factor is that membership perks in paid loyalty programs must be exclusive.
2. E.l.f (Tiered Loyalty Program)
E.l.f uses the tiered loyalty program. The levels of loyalty are the main emphasis of these programs. In other words, your clients accrue more rewards the more loyal they are. Tiers in your loyalty program can help to maintain consumer engagement and brand awareness. Tiers also incorporate gamification into the process, allowing users to advance through levels based on how much they spend or “play.”
The level rises along with the points, making the rewards more restricted. Include the percentages of each tier, indicating how many members have attained it, to entice additional customers to take part in the tiered scheme.
Loyalty Program Checklist
If you’re prepared to start a loyalty program, you should also consider the following factors:
- The foundation of a rewards program is customer information, which enables you to customize the program properly.
- What KPIs are the most crucial to you? Loyalty programs can be applied for developing communities, acquisition, and retention, but you must choose and customize the features appropriately.
- What vertical do you belong to? Businesses with a high purchase frequency should consider gamification and earn-and-burn systems, whereas luxury brands profit most from focusing on privileges and experiential tiers.
Keep in mind that having a long-term view is essential. One-time promotions can be expensive and typically don’t lead to customer loyalty. They do alter consumer behavior but in unfavorable long-term ways. Any beneficial effects are quickly undone when other companies launch their promotions.
When to Add a Loyalty Program for Your Business
Your peak season should be considered when organizing your loyalty program launch. Which season of the year has the most traffic, according to you? Do you have any critical shopping occasions in mind, like Black Friday, Christmas, or Valentine’s Day? Consider Halloween marketing. Introducing a loyalty program ahead of a busy shopping season will help you to stand out from your competitors since people will be drawn to your store to take advantage of the new rewards program.
Launching your loyalty program in a calmer period would also make sense. In that case, there would be less of a “marketing bang”, making it easier for you to test the waters, determine community interest, and make some adjustments to your customer rewards program. With this strategy, users can learn more about the program and spread the word about your brand on social media. This will eventually increase the number of your potential customers.
How to Do Things Differently with Your Loyalty Program
1) Making use of the customer acquisition funnel pushes customers to go through several steps before completing a purchase. When you comprehend the funnel and the main indicators (Awareness, Interest, Consideration, Intent, Evaluation, and Purchase), you’ll also be able to determine when a customer is in a particular stage. You can stop 90% of your leads from leaving using this information.
2) You can provide your consumers with a more individualized experience when you better understand their needs. Your visitors are divided into groups through behavioral segmentation based on a common, distinct pattern of actions, such as:
- Their shopping habits. Do they shop at the same time of year, for instance?
- The purchase history of the customer.
- Check if they are aware of your product/service and if they are looking for alternatives.
- What do they know about your company, your reputation, goods, and services?
Look at Behavioral Segmentation 9 Examples & Strategies to learn more about how to create a personalized experience for your customers.
Best Customer Reward Programs to Get Inspired
Best Membership Program Ideas that Work
Here are our top reward-based programs from well-known brands and small businesses from various industries and niches to learn from.
Offering First-Time Purchase Discounts to New Customers
Discounts are popular among shoppers for apparent reasons as they save money and feel more special. These are the main five benefits of providing first-time purchase discounts:
- attracts more potential customers;
- engages existing clients;
- meets sales goals;
- increases the website traffic;
- improves your brand’s reputation.
Offering a discount can increase client lifetime value, encourage long-term customer loyalty, and promote customer acquisition when done with thought and plan. In return for their email addresses, give customers a one-time discount on their first purchase.
Presenting Special Offers in Exchange for Reward Points
Create exclusive deals that only premium members can use by trading loyalty points and your existing offers access to all clients. Encouragement of members to spend more and accumulate more loyalty reward points is also a game-changer.
Celebrating Customer Birthdays with Discounts, Coupons, or Gift Cards
As it turns out, there exist lots of reasons to provide birthday staff rewards to your clients or employees. Almost every customer would love getting birthday gifts, cards, and surprise points as all of these will have a significant influence on the client’s brand loyalty.
Thus, you should think about rewarding your most valuable consumers. They can receive special gifts at stores or online for their birthday or any other holiday.
Giving Out Special Rewards for Referrals
Brands may grow revenue and attract new clients thanks to referrals. It’s a loyalty system that enables your devoted clients to earn reward points. It works by directing new consumers to your business, encouraging them to purchase your goods at a lower price, and earning rewards points in return.
Leveraging Free Trials
One of the best membership program ideas is to provide free trials, especially for software or services that require a subscription. If trial users enjoy your product, they will eventually start paying for it and become devoted customers.
Running a Bonus Point Campaign
It works by advertising certain products or services, and reward program members can earn more bonuses by purchasing them. Promote a program on social media to increase its impact. Remember that to make the members feel unique. It is preferable to keep this campaign exclusive to them.
Despite some beliefs, customer loyalty popularity is increasing. However, to succeed, a company has to make considerable adjustments in handling customer loyalty programs. Using one of the top loyalty programs from day one would be wise. But even if you don’t launch a reward program initially, you can always provide your customers with a positive experience.
Now that you've read about the various top customer loyalty programs and seen examples from well-known companies, you’re better prepared to implement one.