It could cost you anywhere from 5x-25x more money to earn a new customer than to keep an existing one. With that in mind, it only stands to reason that you should do everything possible to keep your current customers.
One of the many ways to achieve this is to offer a customer loyalty program where patrons receive rewards for making frequent purchases or helping to promote your brand. Whether you offer points, free merchandise, coupons, or even access to new products, a customer loyalty program incentivizes your customers to keep buying and/or supporting your brand.
Approximately 70% of consumers are more likely to recommend a brand with a good loyalty program. Plus, nearly three quarters of them say a loyalty program makes them more likely to stay with a brand.
If you don't have a rewards program, it's time to get busy. Need some inspiration? Here are a dozen examples of killer customer loyalty programs you can use to fuel your own rewards plans.
1. Starbucks Rewards
The Starbucks Rewards customer loyalty program is straightforward, but loaded with features.
First, you need to download their app or register a card. (The app saves you the hassle of hunting for a card in your wallet or purse.) From there, you have a plethora of possibilities, like ordering ahead and paying with your phone. You can customize any order down to the most minute detail. For example, after you select a drink, you can choose the size, add-ins, espresso and shot options, flavors, toppings, and what type of milk.
Seriously, the app does everything except make your cup of coffee. The baristas still have to do that.
All your purchases add up to free food and drinks.
- You receive two "stars" for every dollar you spend.
- On your birthday, you get a reward—as long as you've made one purchase anytime prior to that.
- If you're staying at the restaurant for a bit, you get free refills.
- You'll receive information about member events and offers via email so you can rack up points faster.
If you compile 300 stars in a year, you'll graduate from the Green Level and achieve Gold status. That means you'll have access to monthly double-star days, you'll get a personalized Gold card, and you'll get an additional reward for every 125 stars. For Starbucks addicts and coffee cravers, this is a must-join customer loyalty program.
What you can do: Consider tiered levels of loyalty. Those customers who purchase more frequently are rewarded more often. Think of your top tier as an exclusive club. Provide the incentives to make your best customers happy, but make it attainable for everyone.
2. Amazon Prime
When you shell out $119 per year to be an Amazon Prime member, it may seem like a lot of money at the time. But when you consider the benefits, even the average shopper wants to buy more more often.
Amazon Prime has over 100-million subscribers. Some of the benefits include the Prime video service (with thousands of free titles), unlimited music streaming, unlimited photo storage, and unlimited reading. That's a lot of unlimited for $119.
The pièce de résistance, however, is free Two-Day shipping on over 100-million items. Customers will order more when they know they don't have to pay pesky shipping charges each time. It's so popular that Prime members spend about $1,300 each year, whereas non-members spend about half of that. Amazon shipped over five-billion items with their Prime subscription service worldwide in 2017.
What you can do: If you can swing it, market your products with free shipping. Even if you have to raise the price of your product or service a bit to compensate, those two glorious words—free shipping—makes people react. In fact, 90% of consumers say free shipping is their top incentive to buy online.
If you're selling a service that doesn't require shipping, how about including a bonus for making a purchase? It could be anything from a valuable e-book that's only available when a customer buys a specific product to a promotional item you send in the mail. Use your imagination and offer something extra that has real value.
3. Sephora Beauty Insider
Sephora made their free rewards program so popular, it now accounts for about 80% of their total sales. Its 17-million members earn points for each purchase, but the unique part is how they can use those points.
The multinational chain of personal care and beauty stores is by no means a bargain outlet. They're more of a luxury provider.
Sephora's prices are above average, but their rewards allow shoppers to cash in points earned for gift cards and discounts if they wish. This helps offset the higher prices without lowering the value of the products. In essence, it makes a product more attainable—resulting in a purchase that might not typically happen.
Of course, there are other rewards like limited-edition products and in-store beauty services and classes.
As with many customer loyalty programs, the more you buy, the more you're rewarded. For example, you can join for free and start earning rewards with your first purchase. Plus you get one-of-a-kind experiences and trial-size products.
If you buy $350 per year, you're bumped up to the VIB level, which offers more rewards. If you spend $1,000 each year, you're placed in the Rogue category. This not only offers more rewards, it also features free shipping, access to exclusive products and events, and more.
What you can do: Membership has its privileges. Give your customers every reason to join by making your rewards program a no-brainer. Free is a no-brainer. It makes every customer feel like they're part of your brand right from the beginning. Start there, then create spending levels that offer rewards that are both varied and equal to the money spent.
4. TOMS One for One
TOMS started their shoe business in 2006 to help improve lives. While in Argentina, founder Blake Mycoskie saw that many of the children didn't have proper footwear. So he built an entire business around the idea of providing shoes for those that needed them. And so it began:
For each pair of shoes sold, a child in need receives a pair.
The business model not only helped address a need, it also advanced health, education, and economic opportunities for kids around the world. TOMS has over 90 shoe-giving partners in more than 70 countries, amounting to 86-million pairs of shoes provided.
This isn't your prototypical loyalty program. In fact, TOMS doesn't provide a loyalty card, nor do they issue rewards. The incentive for customers to make a purchase is in the giving. It's a "pay-it-forward" reward. TOMS is appealing to the values of their customers. For every purchase, customers know they're making a difference by creating change through a variety of initiatives.
Today, in addition to shoes, TOMS sells eyewear, clothing, and other products, like coffee. As a result, they've added two more levels of philanthropy: vision assistance and water.
When you buy eyeglasses at TOMS, you're also providing an eye exam and treatment for someone that needs it. When you buy a bag of TOMS Coffee, you're providing a week's supply of safe water to a person in need.
What you can do: If you're interested in cause marketing, the TOMS pay-it-forward method is a great example. Identify a charity or need, then create a product to support it or build your entire business around it. You can apply a BOGO (buy one give one) method like TOMS or donate a percentage of each sale. There are many other ways you can give back, just be sure you're very clear about how much money you'll donate and exactly where it's going. Your customers will want to buy from you because they know part of their purchase is going to a good cause. That's their reward—the joy of giving to a worthwhile cause.
5. Barnes & Noble Membership
If you love buying books—and/or visiting a bookstore—Barnes & Noble's Membership program is a worthwhile investment. It's as straightforward as it is beneficial to loyal B&N customers.
For $25 each year, the U.S. bookseller gives its members discounts every day. Whether you're shopping online or in one of their 630 retail stores, you get 40% off hardcover bestsellers, and 10% off almost everything else. If you order online, you also get free shipping without a minimum purchase.
Let's say a famous author like John Grisham releases a new book. The sticker on the book at B&N (or online) shows the difference in price for members vs. non-members. Members will pay $17.97 rather than the non-member cover price of $29.95.
Additionally, you receive over $60 worth of coupons via email as soon as you join.
What you can do: Keep it simple. Barnes & Noble isn't doing anything fancy—or confusing. You pay a relatively small fee each year to become a member, then you save money on each purchase in return. This is for loyal customers who do a lot of reading. If your business has a core following who will support a yearly membership fee, you can apply the same process. Charge a reasonable up-front rate to join and renew, then allow for special discounts for those members.
A growing number of consumers are willing to pay a fee for enhanced loyalty benefits. If many of your customers are millennials, however, you might want to consider a different approach. According to a study, almost 35% of them won't join a rewards program with a membership fee.
6. REI Co-op
REI's Co-op customer loyalty program is a throwback to their humble beginnings when their customers were the owners. For a one-time charge of $20, you'll get 10% back on eligible purchases, aka an annual dividend, as long as you spend at least $10. It's considered your share of the co-op's annual profit.
The incentive is that you only pay the $20 membership fee once. Then you're good to go for the rest of your life. As long as you make at least $10 of purchases each year, you'll get your reward check each Spring.
Naturally, this program works best for outdoor enthusiasts who plan on making regular purchases at REI. And obviously, the more you spend, the more you get back. So one larger purchase pretty much pays the membership fee.
Additionally, as a member you can use an exclusive REI Co-op World Mastercard and get even more return on your investment. You'll also get member-only special offers, access to deeply discounted in-store "garage sales," plus special pricing on outdoor classes and events.
What you can do: If you're only going to charge a membership fee once, prepare to dish out the discounts on a regular basis—forever. If your business caters to a loyal following, this type of program is a great option, especially if you have a selection of higher-priced items for sale. Steep discounts aren't as realistic for smaller retailers.
7. Chipotle Rewards
Chipotle knew they needed a customer loyalty program to drive digital innovation and make their brand more accessible. So they created a campaign for loyal patrons in three cities as a test drive. The lucky first recipients were Phoenix, Kansas City (Kansas and Missouri), and Columbus, Ohio.
The idea with the pilot program was to test, learn, and listen to customer feedback before moving ahead with a national launch.
Chipotle Rewards is a standard point-based system. Customers who enroll earn 10 points for every $1 spent. When they reach 1,250 points, they receive a free entrée. Simple and straightforward. As an early incentive to drive more digital orders, however, customers that use Chipotle's app (or place an order online) earn an additional five points for every $1 spent. Customers in the pilot markets also get free chips and guac following their first purchase using the new rewards program.
Chipotle also plans extra points days, bonus points (1.5x) when trying something new, and special surprise birthday gifts.
What you can do: There are plenty of reasons to adopt a points-based system in the food and beverage industry. About 86% of shoppers said they’ve joined a loyalty program to collect points for rewards. If you have a restaurant that caters to millennials, all the better. Millennials are more likely to belong to a restaurant loyalty program (46%) than the total population (36%). The key is to know your customers. Like Chipotle, you can roll out a pilot program to test, learn, and listen to what your customers have to say in advance of a larger launch.
8. The North Face VIPeak Rewards
American outdoor product company The North Face doesn't believe in cookie-cutter customer loyalty programs. Rather, they choose to compensate their customers according to their lifestyle. Their flexible VIPeak program advertises: "Turn your passion for adventure into real rewards."
This program allows loyal patrons to earn points traditionally through purchases and in unique ways, like attending North Face events. You'll earn 10 points for every $1 you spend at a retail store or online, and five points for every $1 you spend at an outlet store. If you attend a summer campout series, you'll get points. If you attend a Speaker Series presentation, you'll get points. You can get points just for downloading their app.
When it comes time to redeem them, however, customers can get creative. For example, rather than cashing in points for more North Face products, you could use your points toward a mountain climbing trip to Nepal. This approach speaks to the brand's target market and their interests. In turn, it creates a stronger connection between the brand and the consumer.
What you can do: If you want to cater to your target market's interests, incorporate creative marketing strategies into your loyalty program. Then reward them accordingly. Think about your customer's interests and come up with something unique. It's almost like shopping for someone you care about. Rather than getting them a typical gift, you can show how much you care by putting a lot of thought into it. The thoughtfulness won't go unnoticed. You may not have the resources to sponsor a trip, but you can offer them something out of the ordinary as an incentive for doing business with you.
9. Giant Eagle Fuel Perks
Wouldn't it be nice to save money on gas while you're shopping for groceries? That's what Giant Eagle's fuelperks! are all about. The more groceries you buy, the more you'll save at the pump. It's known as a coalition loyalty program.
Giant Eagle is an American supermarket chain that also happens to own a string of convenience stores called GetGo. The two work hand-in-hand to provide savings to their loyal customers. For every $50 you spend at Giant Eagle, you get 10 cents off per gallon of gas at GetGo.
All you have to do is scan your Giant Eagle Advantage card each time you shop. You'll save money on select items in the grocery store, plus when you arrive at the gas pump, you'll receive a message asking whether you want to redeem your perks. Additionally, cashiers regularly alert you with your fuelperks! balance.
Also, you can accumulate fuelperks! with more than groceries. Anything you buy at Giant Eagle—from their dry cleaning service to prescriptions from their pharmacy, etc.—adds up to savings.
The process also works in reverse. When you pump your gas at GetGo, you earn two perks per gallon. Once you reach 50 perks, you can choose between 2% off on groceries or 10 cents off for each gallon of gas.
What you can do: If you own two businesses and you want to promote one through the other, this type of rewards program works wonders. A coalition loyalty program allows customers to patronize multiple businesses (in this case related), then redeem their points at any of those businesses. All the customer's information and transactions reside in one database. If you want to reach a broader audience and attract new customers, this is a great loyalty program to try.
10. Pulp Juice and Smoothie Bar
Pulp is a regional franchise that prepares real fruit and vegetable smoothies along with wraps and salads. When you visit one of their 32 locations (predominantly in Ohio and Pennsylvania), you can grab a loyalty card that rewards you after purchasing 10 smoothies. If you're addicted to that afternoon Protein Packer or Mango Bomb, it's an easy way to get a free medium drink every few weeks—depending, of course, upon how many times you visit.
This is by no means a revolutionary customer loyalty idea, but it incentivizes continued visits, if for no other reason than to claim that free drink. Research shows that 55% of millennials and almost 50% of baby boomers stay engaged with a brand that offers some kind of reward card.
What you can do: If you want a simple, no-nonsense customer loyalty program that encourages repeat visits, try a rewards card. It's as simple as printing cards with numbers. Each time the customer visits, the cashier simply punches the next number. When the customer reaches the final number (let's say 10), they can claim their reward and get a new card to start the process over again.
11. Millie's Brand Ambassador Program
Millie's bases their approach to a rewards program on advancing their social media presence. The Pittsburgh-based homemade ice cream retailer announced their Instagram Brand Ambassador program where social media moguls can earn free ice cream for "spreading the Millie's love."
First of all, you need to have at least 3,000 Instagram followers and a publicly accessible account. In exchange for two Millie's-related posts per month, you get three pints of ice cream to take home (if you live in Pittsburgh).
As if that wasn't sweet enough, you'll also get some pre-release and speciality flavors to try, assorted Millie's swag, and invites to cool social events. Millie's also agrees to engage with and share your posts and photos with their IG following.
This is a great way for Millie's to reward fans of their brand who share a passion for all things ice cream. In return, Millie's gets free publicity in and around their home base.
What you can do: An innovative way to advance your social media following is through a social rewards program. Announce a program that gives your loyal customers a feeling of ownership in your brand. To be sure it's worth your while, open the campaign to those in good standing (with a specific number of social followers) who are willing to promote your brand in exchange for products they already love. You get free publicity from a reputable source with a proven following and your customers get good vibes and free stuff. Everybody wins.
12. Foursquare Swarm Perks
How would you like to receive rewards just for showing up? That's what the location-based mobile app Foursquare Swarm has developed with their Swarm Perks program.
Swarm's app lets users share their physical locations with friends and family by "checking in" to certain places. Swarm Perks is a discount program that teams up with 60 national chains to add rewards for those check ins. In other words, when you check into a location, you're rewarded.
For example, if you're near a Best Buy, you would receive an alert from a nearby location offering a reward. When you look at your Swarm app. you'd see that Best Buy is offering a reward for a check in. (You'll also see a money bag icon next to their name.) For example, the reward could be something like 20% off on an item over $100.
What you can do: To give people an incentive to get into your store, offer a special discount just for walking in the door. You don't necessarily have to do this through the Swarm app. Facebook offers a similar check-in process where you can reward your visitors for visiting one of your locations. The idea is to get them into your store where they'll either take advantage of the special offer and/or make another purchase.
Create Your Own Customer Rewards Program
Customer loyalty programs are just one of many ways to show your customers how much you care. Another popular method is the handwritten letter or thank-you note.
A handwritten note stands out in a digital age of texts and email messages. It creates a human connection whether you're sending a promotional offer, announcing a new program, or just thanking customers for supporting your business. It also makes a bigger impression than an email that could get lost in your customer's daily inbox shuffle.
Did you know you can automate a digitally handwritten note as a triggered direct mail response? You can also integrate the automated action into your CRM. For instance, CRM contacts that become loyalty members can automatically receive a digitally handwritten welcome note. What a great way to build rapport with your customers.
Simply Written's handwritten correspondence is simple and effective. You can help your business create connections that last a lifetime. Contact us today to find out how.