Download Loyalty Programs Guide and more Study notes Marketing in PDF only on Docsity!
Loyalty Program Examples: 25
Strategies & 100+ Stats from
Ecommerce & Retail
By every imaginable metric, loyal customers are the lifeblood of business. And yet, according to a recent Bain & Company study, “60-80% of customers who describe themselves as satisfied do not go back to do more business with the company that initially satisfied them.” Loyalty programs provide powerful motivation for buyers to create accounts, come back, and spend more. Even better, they create meaningful connections. Today, rewards programs borrow elements from psychology, behavioral economics, and game design.
They transition the focus from percentage off, points earned, and sign-up bonuses to more experiential rewards like: interest-aligned gifts, surprise upgrades, or exclusivity-based milestones. Of course, all that can be a bit esoteric. That’s why we’ve collected …
25 strategies based on 36 examples and over 100 real data points from
the best ecommerce loyalty programs and retail rewards:
- Know the Success Factors
- Eliminate the Loyalty Killers
- Brand Your Program
- Build a Community
- Invite Before, During & After
- Put the Offer Front and Center
- Communicate Benefits Clearly
- Make Redemption “Crazy Easy”
- Keep It Simple, Stupid
- Integrate Rewards at Checkout
- Focus on a Single Ask
- Add Urgency at Every Step
- Let Customers Sell for You
- Incentivize Experiences
- Use Tiers as Multipliers
- Tie Tiers to Spending Levels
- Reward User-Generated Content
- Go From Free to VIP
- Don’t Be Afraid to Get Paid
- Put Money Where Your Mouth Is
- Send Event-Triggered Emails
- Gamify Engagement
- Level Up Beyond the Basics
- Let Your Tiers Run Wild
- Take Loyalty Offline, Online & Back Again
As applied to loyalty programs, the top three reasons programs succeed, as reported by the 2017 COLLOQUY Loyalty Census are:
- Eliminate the Loyalty Killers Unfortunately, getting a customer to sign up for your loyalty program in no way guarantees success. In fact, the majority of program members — 54% — are “inactive.” Why? Again COLLOQUY sheds light on the top reasons members abandon a loyalty program:
- Took too long to earn points or rewards: 57%
- Did not provide rewards I was interested in: 53%
- Program sent too many communications: 38%
- Communications were irrelevant: 36%
- Brand Your Program The world’s best reward programs are all focused on the complete experience. Brands like Sephora, Starbucks, and others sweat the small things that show customers how seriously they take loyalty. From an aesthetic perspective, start by branding your loyalty program the same way you would a new product collection or major campaign:
As a result, Evy’s Tree saw …
- 83X return on investment
- 65% redemption rate overall
- (^) 58% repeat customer rate increase
- (^) $1,032 monthly ad spend reduction Get members of your program to participate in as many reward touch points as you can. The more familiar and invested they become, the more engaged they will be.
- Invite Before, During & After When is the best time to invite visitors into a loyalty program? Before, during, or after their first purchase? Advice on this front varies — as do the examples we’ll examine: - Before purchase lets you leverage your program as frontline marketing - During purchase , especially at checkout, can decrease cart abandonment - After purchase frames rewards as a surprising and delightful extra for retention In other words, the only way to find out what works best for your audience is to invite visitors at each stage, measure the results over time, and optimize from there.
- Put the Offer Front and Center The more visible your program is, the better it will perform. You can use your homepage banner, emails, and any other onsite areas to increase visibility. It also goes a long way to have your program visible on every page.
Given the highly relational nature of its product, Baby Tula, places the “Collector’s Club” front and center through a chat-like CTA box across their site: “We added Smile,” says Baby Tula’s Marketing Manager Jessica Carlson, “because it was an all-in-one solution with VIP, loyalty, and referrals. We initially wanted a referral program to increase referrals; however, the VIP program is great for customers to share branding of our Collector’s Club.” Collector’s Club is Baby Tula’s first rewards program.
In one month, its 85,500 program members earned 4.21 million points
and redeemed 1,084 rewards at a 24% redemption rate.
- (^) Integrate redemption directly during checkout In fact, let’s unpack the idea of clarity even more …
- Make Redemption “Crazy Easy” Nothing is more frustrating — and loyalty-killing — than earning points only to discover a complicated maze of rules, regulations, and redemption exclusions. In lieu of limitations, supplement line GHOST integrates their program with their complete product line, ensuring customers can redeem their points for any product available on their website. With Swell, whose seamless product redemption integration won 2017 Shopify Commerce Award for Best Store Experience Using Shopify Scripts, GHOST’s shoppers took advantage of the options, making nearly 2,500 product redemptions in three months.
- Keep It Simple, Stupid The KISS principle isn’t an insult. It’s must follow advice. Especially when you’re introducing rewards for the first time or optimizing your program due to inactivity from members. Thrive Causemetics earned 18.4X ROI on their referral program in the first month by eliminating the fluff and keeping their customers focused on what mattered most to them: making purchases, referring friends, and earning discounts.
- Integrate Rewards During Checkout Allowing customers to claim rewards directly from their cart with one click makes your program work seamlessly with the natural user journey. Using LoyaltyLion’s In-Cart Rewards and Instant Points, Dr. Axe increased …
UNTUCKit’s reward program — an increasingly important part of their recent $ million valuation — excels. At the entrance to their loyalty program lies one form, one reward, and one call-to-action (CTA): No frills, no hassle, no problem. This campaign shines in its simplicity, a value that perfectly reinforces the style of the brand.
- Add Urgency at Every Step Pura Vida Bracelets approaches customer retention and lifetime value — the driving principles behind any loyalty program — with not one, but three strategies. The first two are all about urgency. Number one: the Pura Vida Monthly Club sends members three exclusive bracelets every month. To drive sign-ups through urgency, they’ve implemented a countdown timer that resets each month:
Number two: a traditional rewards program powered by Talkable makes sharing via email or social easy.
Adding urgency at every step drives action, instead of letting your valuable offers sit idly by. Still, Pura Vida’s third approach is perhaps even more powerful …
- Let Customers Sell for You To make the most of their existing customers, Pura Vida uses an ingenious multi- channel program that combines Instagram, a tiered referral program (powered by Refersion), email marketing, and Shopify Plus’ ecosystem of apps and Partners.
The Rep Program harnesses the power of Pura Vida’s more influential customers. With over 110,000 micro-influencers participating:
- (^) Sales from reps have increased 300% YoY
- (^) AOV from referral sales are 11% higher than normal orders
- Customer CPA (cost per acquisition) associated with the rep program is just $ versus a CPA 7X higher than other channels
They set their point redemption threshold relatively low, making it easy for people with points of all increments to enjoy rewards.
This tactic increased their social media marketing by 80 quality impressions per post while paying under $0.70 per new follower. The Elephant Pants also make their rewards nonlinear, setting higher-point redemption prizes at a greater point-to-value ratio than those at lower tiers.
- Use Tiers as Multipliers Like The Elephant Pants, Best Choice Products (BCP) offers a wide array of ways to earn points, including user-generated content, reviews, and answering questions. These are excellent ways to build community and retain customers, but BCP takes it a bit further. Utilizing Swell behind the scenes, BCP lets members multiple their points based on two VIP levels.
