When current customers become loyal customers, they can spend more money and generate larger transitions across the board. Brilliant customer loyalty programs are the bread and butter of a brand's strategy, but what makes them worthwhile? Continue reading to learn the differences between customer loyalty programs, what customers look for, and which companies are doing them the right way.
Different kinds of customer loyalty programs
Well-designed customer loyalty programs influence customers to repeat their business by offering discounts, rewards, and other incentives and are an essential part of the customer experience.
1. Points programs
Points programs allow customers to accumulate points via their purchases. They can then redeem these points for free products and other exclusive perks.
2. Tier Programs
Tier-based customer loyalty programs give customers different rewards based on their tier. To achieve the highest tier, brands encourage customers to make more purchases and engage more with a brand.
3. Paid Programs
When customers join a paid loyalty program, they receive immediate and continuous benefits. The fees for paid loyalty programs can either be a one-time purchase or a recurring subscription.
4. Value Programs
Value-based loyalty programs are when businesses donate money to a charity while offering the customer a reward. Altruistic customers may value loyalty programs from brands that publicly advocate for social issues.
What Do Customers Desire From a Loyalty Program?
Customer loyalty programs are a great way to retain your customer base, but it's also essential when you want to acquire new customers, as well. But what do customers want from a brand's loyalty program?
- Enticing rewards: Offer your customers free products and discounts to show them that you appreciate their loyalty.
- Exclusive deals: Perks like free shipping or exclusive access to sales can make a customer feel special and rewarded for their loyalty.
- Hassle-free usage: Make the customer's experience hassle-free — make it easy for them to sign up for your program without having to jump through hoops.
Best Examples of Customer Loyalty Programs
Now that you know the types of customer loyalty programs and what customers look for, continue reading to see great examples of various loyalty programs from top companies.
Starbucks: Starbucks Rewards
The Starbucks Rewards program is a masterfully designed points program that rewards customers for every purchase. Every time a customer orders through the app, they gain “stars” — the currency used to earn free food, drinks, and merchandise.
Sephora: Beauty Insider
Sephora's Beauty Insider program is a tier-based loyalty program that allows its customers to choose their own rewards. Customers at the highest tier gain access to exclusive events and can receive bigger discounts during sales.
Amazon: Amazon Prime
Amazon Prime is a great example of a paid customer loyalty program. For a yearly fee, customers can receive free two-day shipping and access to their video streaming service, as well as their Prime Reading program.
Ben & Jerry's: Flavor Fanatics
Ben & Jerry's has always been a progressive force in business, and their customer loyalty value program is proof of that. Not only do their customers get 10% off their purchases and free cones, but they can also rest easy knowing that their money goes toward social causes like environmental advocacy and marriage equality.
For more tips on how to create your own winning customer loyalty program, check out the infographic below.
