Originally posted on 03/03/2015 but updated by the editor on 26/06/2020
Need ideas on how to best reward your customers? We’ve chosen five of the best customer loyalty programs in retail that increased customer satisfaction – and company profits. From coffee to cosmetics, these loyalty programs show how even the biggest brands place a lot of value on keeping their customers loyal. The five brands are:
Here, we’ll introduce you to each of these companies and show you why they’re such good examples of loyalty rewards programs. More importantly, we’ll look at why they’re so successful too. It’ll help you better understand online loyalty schemes and how our loyalty program software can help you offer creative loyalty programs too.
Sephora is a large French brand that sells cosmetics online and instore. They sell products that you can find in other stores – as well as their own. So, they need a way to compete with other brands without reducing their prices. This is one of five major benefits of a loyalty program we looked at in a previous blog. But why is that and how does it work for Sephora?
Sephora’s Beauty Insider first launched in 2007. This example of a loyalty program for retailers lets each customer choose the benefit(s) that suit them best. As we explained in our spotlight on the program, the brand is looking to offer rewards in tune with what their customers want.
This retail loyalty platform has three tiers. The first and most basic tier is where members earn one point for each dollar they spend. You can then redeem points for rewards like gift cards, plus exclusive products you won’t get anywhere else. Spending more moves you into a higher tier where you earn more points and get more in return.
Slick branding and personal customisation mean Beauty Insider’s membership is now more than a staggering 10 million people. And it’s a shining example of a loyalty retail program in action.
Check out our case study with beauty brand, 100% Pure, who’s loyalty program resulted in 3x increase in repeat purchase frequency.
Now a global coffee giant, Starbucks is a multi-billion dollar success story. With a presence in so many countries, it’s the most successful coffee franchise in the world. But it did lose ground due to over-saturation in the late 2000s, which was followed by the global downturn.
Now, Starbucks is back on top thanks (in part) to one of the best rewards program we’ve seen: My Starbucks Rewards. How does it work? Well, it tracks a customer’s buying habits and turns this into valuable data. With it, Starbucks can change their products based on demand.
Starbucks is staying ahead of the competition too. By offering payment options with the mobile app, it’s easier for customers to consume their product. And that means the brand can corner a niche in the market. Data-driven decisions and customer convenience – it’s a strong blend.
My Starbucks Rewards is a strong loyalty rewards program – as the numbers show. In the United States alone, there were 19.4 million active users in Q2 2020 – an increase of 15% year-on-year. Add the millions more worldwide and that’s one huge loyalty membership program!
With customers continuing to come to them for their caffeine fix, Starbucks reported a 7% rise in revenues for the 2019 fiscal year.
If you want to find out more about how to drive and keep customer loyalty today, read LoyaltyLion’s CEO, Charlie’s, expert blog post.
Giving M&S Simply Food a run for its money, Waitrose & Partners is part of the John Lewis Partnership in the UK. It is currently the high-end grocer of choice in Britain – offering the public more in the way of deluxe food products in their local shopping centre. Such is its popularity, a survey by Which? named Waitrose & Partners as the UK’s best supermarket for 2020.
With a focus on service, myWaitrose is one of the best loyalty rewards programs for customers who sign up straight away. You can only claim product deals through their own reward system, which means that only loyal customers benefit from savings.
In addition, members can also claim extras like a free newspaper and coffee or tea in-store. And that makes it easier for shoppers to justify spending more with this upmarket grocer.
myWaitrose members can take advantage of discounted cooking courses and dry cleaning too – more features that add to the program’s exclusivity.
Waitrose & Partners’ loyalty program cements the brand as one that prides itself on high quality products and customer care. And it’s producing some great results. By the end of January 2016, this retail loyalty solution had six million members – making up 70% of sales.
One of the best online loyalty program examples comes from one of the world’s largest retailers − Amazon. Thanks to Amazon Prime, it’s the current poster child for ecommerce brands who want to want to keep hold of their customers – and reward them in the process.
Amazon first rolled out Prime in 2005 and consistently reviews its business model to stay on top of the competition. With Prime, the aim was to stop shoppers abandoning carts because of high or unexpected shipping costs. So, for a fee, customers get unlimited two-day shipping – and don’t have to spend a certain amount to do so.
But this digital loyalty program has evolved even further. As well as faster delivery, members benefit from online rewards such as video streaming, music streaming, photo storage and more.
By the end of January 2020, Amazon said it had more than 150 million paying members of its loyalty program worldwide. And this is really good news for the ecommerce giant. In 2018, a survey found that Amazon Prime members in the US spend more than twice as much as non-members. It’s clear to see the two-way effect of this loyalty program in action.
Gilt is an online fashion and accessories brand that specialises in designer labels. It offers up to 70% off in-store retail prices – but you must first be a website member to view the sales.
Gilt set up its Insider loyalty point program for online shoppers only. Members can redeem points on their current purchases, get extra discounts and free shipping. But perhaps the most important feature for Gilt Insider members is early access to its sales. Read why aspiration and exclusivity are one of the key drivers of loyalty.
The Gilt Insider program led to a huge boost in engagement for the brand. The impact was so great that it’s now often cited in marketing how-to guides as one of the best customer loyalty programs in retail. And it shows you how to run successful campaigns too.
If there’s one thing you should take away from these five examples, it’s the positive impact a loyalty program can have on your business. The results usually speak for themselves. But it’s not just something the biggest brands can do. You can create your own innovative and creative loyalty program too. And, with LoyaltyLion, it couldn’t be easier.
Our data-driven platform can help you build an effective loyalty program for your beauty brand, fashion store, or health and wellness business, to give you a few examples. But no matter what your company sells, why not find out what LoyaltyLion can do for your customer retention. Book a time for us to show you what our platform is able to do – and build the best loyalty program for your brand.
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