To give you ideas for your own loyalty program, we selected five innovative programs that have increased customer satisfaction and company profits.
Sephora is a large American retailer that sells cosmetics online and instore. They sell products that are available in other stores so needed a way to compete without lowering their prices. Which is one of the main benefits of a loyalty program – covered in a previous blog.
Their specialised Beauty Insider reward system, enables different customers to choose benefits that suited them best. Members earn one point for each dollar they spend, and these points are redeemable for standard rewards like gift cards and the like, but they can also redeem points on products that are exclusive to members of this program; such as limited edition products, in-store beauty tutorials, and a variety of products not available to the public.
The slick branding, coupled with personal customisation has seen Beauty Insider’s membership grow to a staggering 10 million people.
Coffee behemoth Starbucks has been on a rollercoaster in the last decade, becoming the most successful coffee franchise in the world only to lose ground almost as quickly due to saturation followed by the recession.
Starbucks have clawed their way back up to the top though with their innovative loyalty program, My Starbucks Rewards, that tracks customer buying behaviour and recommendations into usable data, allowing them to modify their products according to demand. They have outpaced the competition too, by offering payment options via a mobile app, making it easier for their customers to consume their product and cornering a niche in the market.
Figures show their loyalty program doubled in a year and a half, going from 4.5 million in 2012, to 9 million at the end of 2013. According to Starbucks they have seen a 26 per cent rise in their profit margins and an 11 per cent bump in total revenue.
Giving M&S Simply Food a run for its money, Waitrose is John Lewis’ supermarket. With Waitrose offering the public more in the way of deluxe food products in their local shopping centre, it is currently the high-end grocer of choice.
With a focus on service, the myWaitrose program offers immediate rewards to the customers that sign up. Deals on their products can only be claimed through their own reward system, meaning that only their loyal customers benefit from savings. Extras like a free newspaper and coffee/tea that can be claimed in-store makes it easier for customers to justify the additional spending at this upmarket grocer. They have recently offered cooking courses and trips to their organic farms that add to the program’s exclusivity.
This added element has cemented their brand as one that prides themselves on quality products and customer care. They are seeing the benefits, with 50% of their customer base now buying products through their loyalty scheme.
One of the largest online retailers in the world, Amazon is the current poster child for ecommerce loyalty programs with its own offering, Amazon Prime.
Consistently reevaluating their business model to stay on top of the competition, Amazon rolled out their rewards system in 2005 to combat customers abandoning purchases because of high or unexpected shipping costs. For a fee, customers can expect unlimited 2 day shipping with no minimum amount on purchase. But the real benefits here are their online rewards in downloadable free digital content provided to their members every month.
It is estimated this rewards system has resulted in their Prime members spending on average 4 times the amount than non-members.
An online fashion and accessories retailer that specialises in designer labels, offering up to 70% on in-store retail prices.
Conducted entirely online, Gilt has set up a loyalty program where members can redeem points for their current purchases, gain extra discounts and free shipping. However, possibly the biggest loyalty incentive for Gilt members is early access to their sales.
Their Gilt Insider program has boosted engagement to such an extent that they are pipped in marketing how-to guides as a primary example of how to run a successful campaigns.
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