If there’s something the 21st century has taught us, it’s that one-size-fits-all solutions simply don’t cut it anymore. With the rise of the ‘unique customer’ who wants everything to be super-personalized and hyper-relevant, companies need to custom-tailor their customer retention strategy to fit their own unique needs better. And the best place to start is by designing a consumer-facing brand loyalty program that embodies everything your business stands for.
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What Is Brand Loyalty and How Do Loyalty Programs Help You Achieve It?
Brand loyalty is more than customers spending money on your products. It is about them believing in your brand and choosing you even when competitors offer lower prices. Brand loyalty is important because existing brand-loyal customers purchase more frequently than new customers and because maintaining your brand-loyal segment is also far less expensive than marketing to attract new customers.
In recent years, loyalty programs have become more important in achieving reliable, long-term brand loyalty. Based on the For Love or Money 2022 research by The Point of Loyalty, offering value for money is still the most important action that drives loyalty. Nevertheless, a consistent experience and relevant and personalized communication have increased in significance as actions brands can take to influence customers’ loyalty.
What Do Brand Loyalty Programs Look Like?
In short, brands are in a peculiar position. Unlike retailers, they’re already differentiating themselves due to their line of products or services. It’s the low purchase frequency that causes them a headache.
Most brands aim to gain relevance by engaging customers and driving word-of-mouth. Brand loyalists not only have a higher CLV but also build aspiration in others, which is a powerful motivating factor.
- Get your name out: Brands differentiate themselves by nature, so their main aspiration is to reach as many people as possible. Their primary focus is on building advocacy.
- Customer advocacy requires long-term engagement. Because of that, brands motivate customers to consume content and engage on social media to generate hype and word-of-mouth.
So let’s examine the top loyalty program strategies for brands that want to build a more loyal customer base.
1. Customer Engagement Through Partner Retailers
Retail stores are an important platform for most brands, but third-party sales make it almost impossible to engage with customers and enroll them into a loyalty program. But you can bridge this gap with any of the following approaches:
- Scanning product QR codes: Associate each product with a unique tag that comes attached in a little sachet. Customers can scan the QR code and arrive at the loyalty program’s landing page, or even receive a small reward.
- Receipt upload: Ask customers to take a photo of their purchase receipt and upload it to earn points or rewards for their purchase.
- Product codes: Add a special note containing a unique product code inside your product packaging. Customers enter the code and register to unlock exclusive benefits.
- Photo contests: By scanning the attached QR code, people can enter a photo contest. Those who upload a photo posing with their purchase have the chance of taking home the grand prize.
Employing any of these practices promises substantial benefits. Other than enrolling new members, brands receive UGC, drive word-of-mouth, track purchases, change purchasing habits and foster a sense of gratitude among customers.
2. Personalization Redefined
When done right, personalization contributes to a huge uplift in customer spend, retention and engagement. According to the Global Customer Loyalty Report 2022, 29.3% of loyalty professionals said that personalization was their most important investment in the coming years. Personalized loyalty programs help marketers solve the personalization challenge and support brand loyalty by adding touchpoints where customers can generate content or share information.
For instance, email communication is more personal when it includes loyalty-related information, such as tiers, or the number of points currently available. Doing so also creates an urge in the reader to act upon the unused benefits. Another way to enhance personalization is to use gamified profiling to learn about people’s preferences, values, personality, spending habits or fashion style. All of this information can be used later on to make the marketing activity more relevant and strengthen brand loyalty.
3. Memorable Rewards
Gifts, benefits, and incentives make the world go ‘round. According to our report, 71.6% of respondents are “likely” or “very likely” to revamp their existing loyalty program in the next three years. At the same time, these loyalty programs will focus more on emotional loyalty and will offer experiential rewards, rather than transactional incentives enhancing brand loyalty as well.
Come up with reward ideas that will remind people of your brand. Little freebies such as lipstick or engraved pins can put a smile on people’s faces. And recipients will no doubt tell their friends about it. At the other end of the spectrum are VIP rewards. Benefits like these include cocktail party invitations or a weekend at a wellness spa. Naturally, only a small segment of the members are entitled to such luxury, but those who earn it — either by winning a contest or being a top spender in a high tier — will never forget the experience. Plus, the allure of a VIP reward might inspire others to increase their purchase frequency.
4. Hook Customers With Gamification
Gamification is like chocolate: in one way or another, everyone loves it. Adding game-like elements to a loyalty program revitalizes passive members and helps you acquire new ones. There are a number of ways to gamify the experience and enhance brand loyalty:
- Add gamified quizzes & surveys: Create engaging visual quizzes. Show your customers a curated selection of pictures and ask them to choose the one they like best, or let them decide whether they like or dislike each image presented.
- Create leaderboards: leaderboards can be a great way to motivate users to interact with your program more often, spend time competing, and earn new rewards.
- Add challenges & badges: Drive long-term commitment and foster repeated behaviors that help you reach your business goals. Customers can unlock rewards by completing a task or challenge or receive a badge that come with an extra benefit. Challenges also represent social status, so people will want to share their achievements on social media.
- Encourage social interactions: Customers love exchanging experiences and sharing ideas with each other, so harness the power of word-of-mouth. Turn customers into brand advocates by rewarding them for recommending products and services to friends, or set up a hashtag contest on Instagram to drive user-generated content.
- Introduce a Prize Wheel: A prize wheel immediately gets customers’ attention and is a fun, engaging way to build anticipation. It’s also ideal for mobile apps, websites and in-store devices.
5. Boost Social Media Engagement
Social media plays a pivotal role in today’s marketing communication, which is why you should absolutely reward customer engagement on Facebook, Instagram and Twitter, as well as maximize the effectiveness of referrals. First, drive traffic to your products or seasonal landing pages by offering bonus points for sharing them online. Also, build credibility, reputation, and trust by incentivizing people to follow your social profiles. Doing so gives you the option to communicate with members in different ways, other than email.
Next, ride the wave of buzz marketing and harness the power of referrals. Members are more than willing to refer their friends and family members if there are rewards on the line. The same goes for influencers. Offering a commission after successfully referring a customer inspires them to be more proactive when promoting the brand. As for their followers, they will be thrilled to receive exclusive benefits when they arrive at the influencer’s dedicated URL.
7 of the Most Successful Brand Loyalty Program Examples
Let’s see how some of the top brands achieve loyalty with the help of their rewards programs.
1. Starbucks – Starbucks Rewards
Starbucks Rewards is probably one of the most popular customer loyalty programs in the world. To earn loyalty points or, in Starbucks’ case, loyalty stars, customers need to order or pay using the Starbucks app. They can then redeem their stars to get free drinks, food, or even Starbucks merchandise.
Why it works:
- Starbucks collects plenty of customer data with the help of their app, which enables the brand to offer more relevant rewards and communication with customers.
- The program is focused on keeping customers actively engaged with the brand, creating several touchpoints through which members can interact with the brand, e.g. social media, website, and brick-and-mortar stores.
- The loyalty program drives customer engagement, thus boosting brand loyalty.
- Offering seamless integration and consistent messaging across all channels builds long-term relationships with customers.
2. The North Face – XPLR Pass
The North Face’s customers can earn loyalty points when they purchase merchandise or attend special events, check in at certain locations, or download the North Face app — whichever works best for the specific customer’s lifestyle.
Not only that, the XPLR Pass gives customers early access to limited-edition collections and exclusive access to products not yet available to the general public.
Why it works:
- Providing more avenues for customers to earn points — aside from repeat purchasing — helps the brand resonate with their younger, more socially active members.
- The loyalty program offers customers the flexibility to choose how they redeem their rewards points, ensuring the experience is tailored to customers’ lifestyles.
- When redeeming rewards, customers can use their points for unique travel experiences such as mountain climbing in Nepal.
- The North Face offers rewards that speak directly to their target market, thus creating a strong emotional connection between the brand and its members.
3. Victoria’s Secret – Pink Nation
Victoria’s Secret’s free loyalty program, PINK Nation, provides instant access to members-only perks, easy and fun ways to shop, plus tons of surprises. Customers also receive outfit inspo, style hacks, mental health tips and workout playlists.
Why it works:
- The brand applied gamification to their loyalty program, which helps them gather a great deal of customer information and increase website visits.
- Victoria’s Secret also encourages customers to share their experiences on social media by offering them additional points when they do so.
- Members receive a birthday surprise, early access to sales, invitations to events, and new styles when they launch.
- The brand created a supportive and inclusive community around their brand, where members can feel like they’re a part of the “Victoria’s Secret Family”.
4. Lancôme – Elite Rewards
Lancôme’s loyalty program, Elite Rewards, is easy-to-understand, yet incredibly enticing tiered loyalty program, in which members earn 10 points for every $1 spent, receive 100 points for writing a review, and 10 points for sharing their birthday. Members also receive a mystery gift when they spend $100+.
Why it works:
- Lancôme’s loyalty program demonstrates clear value to customers with many great benefits.
- The program is free and offers various tiers based on activity. Rewards, once earned, can be redeemed for Lancôme products or for soft rewards such as spa treatments.
- Lancôme engages with customers outside of the buying cycle as well, for instance, through friend referrals and rewarding profile completion.
- Allowing members to collect points for purchases and engagement behaviors provides the brand with more in-depth customer data and helps strengthen customer relationships.
5. Uber – Uber Rewards
Uber offers a variety of services that cater to just about any individual’s specific needs as well as a loyalty program that’s very valuable. When customers become an Uber Rewards member, they earn points with every eligible dollar spent on rides and Uber Eats orders. These points can then add up to Uber Cash Rewards and other benefits like priority pickup and flexible cancellation.
Why it works:
- The more points that customers earn, the higher their membership level will be, unlocking even more rewards and benefits.
- Their program is designed to provide users with various benefits that allow them extra time, flexibility, and control — leading to a better customer experience.
- Top-tier members also receive premium support, highly rated drivers, point boosts for premium rides, and double points on Uber Eats, making them feel truly special.
- Uber Rewards also lets members earn Marriott Bonvoy points thanks to a Marriott-Uber partnership. The partnership allows customers to earn up to 6x Marriott Bonvoy points per dollar spent on eligible food delivery orders and up to 3x Marriott points per dollar spent on select rides in the U.S.
6. The Body Shop – Love Your Body Club
As a member of The Body Shop’s Love Your Body Club, customers earn a point for every dollar spent. Once they’ve reached 100 points, they receive a $10 reward to spend. The ethical beauty brand is known for its commitment to corporate social responsibility. The brand believes that business can be a force for good, so when they developed their loyalty program, they gave customers the option to donate to charity.
Why it works:
- A loyalty program based on charity highlights key brand values, and increases customer engagement & brand loyalty by reflecting consumers’ values in the program.
- The Body Shop builds stronger relationships with customers by making animal welfare a part of their program.
- To create a better omnichannel experience, The Body Shop invites shoppers to either visit a physical store or simply sign up online for its rewards club.
- Members also receive rewards like invitations to membership events, such as parties, and being gifted a $10 coupon on their birthday.
7. Ben & Jerry’s – Flavor Fanatic
Ben & Jerry’s puts a cherry on top with a strong social mission. When customers sign up for the Flavor Fanatics rewards program, they get 10% off every purchase along with extra perks like free cones and the inside scoop. Along with rewards like discounts and free birthday cones, Ben & Jerry’s also advocates for social justice with special flavors like Save Our Swirled! for the global climate movement and I Dough, I Dough for marriage equality.
Why it works:
- Having a strong social mission allows the brand to build customer engagement and drive repeat purchases through values shared with their customers.
- The brand empowers customers by making them a part of something bigger. They include ice cream lovers in their ongoing social campaigns by offering limited-time flavors and giving proceeds to various charities and communities.
- Always-available rewards, such as 10% off all ice cream purchases, can help set the loyalty program apart from competitors.
- Brand loyalty campaigns, like birthday surprises, create memories that will no doubt encourage customers to stick with the brand for years to come.
Creating the Future’s Best Brand Loyalty Programs
As you can see, there are almost limitless possibilities to tailor your brand rewards program in a way that is not only appealing for customers but that also drives your KPIs.
Even though you have the freedom to jump headfirst into designing a loyalty program and experimenting with ideas, as the old Star Wars saying goes: “It’s dangerous to go Solo”. Our experts at Antavo are more than happy to help you figure out what will work best for your business. Feel free to book a demo or include us in your RFP !
Meanwhile, check out our handy worksheet about reward planning.
Tamas is a Senior Loyalty Program Specialist at Antavo and a Certified Loyalty Marketing Professional - CLMP. Tamas is known for having a keen eye for loyalty and customer retention research and trends. Tamas is also a true gamer at heart and has an impressive collection of cyberpunk books.