As a critical customer retention tool, loyalty programs play a vital role in helping companies maintain their customers. The challenge that pharmacies and drugstores face, however, is to find new ways to innovate and keep a rapidly-growing customer base loyal. Pharmacy loyalty programs play an integral role in retaining both old and new customers, as well as in encouraging customers to fill their baskets with a wide variety of products, not just medicine. A loyalty program is a great way to help you target different customer groups based on their interests, so you can serve and engage your diverse customer base more effectively.
What Are Drugstore and Pharmacy Loyalty Programs?
Drugstore and pharmacy loyalty programs are customer retention (and sometimes acquisition) tools that cater to an audience with high purchase frequency. In a highly crowded market that gives customers plenty of options to fill their prescriptions and purchase health-related products — including online webshops — drugstore and pharmacy loyalty programs aim to give buyers a reason to be faithful to a particular brand.
Loyalty and brand advocacy are particularly important in this vertical, considering that the second-largest customer segment — that consists of roughly 35% of the total customer base — are retirees and recovering patients, who not only tend to make their significantly high-value purchases at the same store, but also contribute the most to over-the-counter medicine sales. Therefore, retaining this segment using a loyalty program should be the utmost priority for all pharmacies.
Pharmacy loyalty programs are also unique in the sense that they need to balance two distinct customer groups: those who are price-sensitive, and those who seek convenience. This means that on the one hand, the reward system should provide some form of incentive to convince buyers that spending money at the store either helps them save money through discounts, or, grants them additional value through free merchandise.
In uncertain times and with disruption at our doorstep, consumer loyalty in pharmacy is more important than ever. It’s about a laser-focus on the customer, developing lasting relationships and cultivating long-term loyalty. This is key to surviving through change and beyond. We need to know how to connect with each and every customer and offer real value. Part of this is understanding how to champion the pharmacy’s loyalty program – presenting customers with the opportunity to access personalised information, offers and rewards.
Due to the nature of their business, drugstore loyalty programs need to reinforce convenience in a number of ways. For instance, managing point collection and reward redemption should be quick, seamless,and still possible even if the customer forgot their card at home. Moreover, the rewards program is recommended to engage customers — even if they aren’t in the buying cycle — in order to make members feel appreciated.
Drugstores are also the home of a more casual audience, who are interested in a wide range of goods, such as baby care products and healthcare items. Loyalty is just as important here in addition to the ability to promote OTC (over-the-counter) and HBA (health-and-beauty-aid) items.
Fundamentally I believe that loyalty programs are an absolutely critical tool for brands to maintain and build relationships with their members and customers. Brands should be using this time to retain and engage existing members and customers, to identify and build relationships with new customers, and to discover new roles for your loyalty strategy as part of your marketing mix. Every single loyalty program will need a rethink – Who is your target membership now? What are you trying to achieve now for your brand and business? What should your new and evolved proposition be? I’m excited to see how loyalty programs evolve and what new innovations will emerge as a result.
The Biggest Customer Retention Challenges for Pharmacies and Drugstores
Increasing customer lifetime value is undoubtedly an important KPI for any pharmacy chain or drugstore, but it is important to understand that there are many more industry-specific challenges a next-gen loyalty program should be able to solve.
- Even though pharmacies are resistant to economic downturns, it’s generally difficult to stand out from the competition. This is why a loyalty program is necessary to elevate the brand image by generating positive word-of-mouth and supporting the brand’s marketing communication.
- A pharmacy loyalty program should also have features geared toward incentivizing members to expand their basket with OTC and HBA items through double point campaigns and other targeted events.
- It’s worth highlighting that loyalty programs are potent marketing tools to make customers feel valued and to give back to the community. Furthermore, a reward system is a great asset to encourage customers to develop healthier habits and to educate them about certain illnesses or treatments.
- Many pharmacy brands already have some form of loyalty solution, but it’s often localized or unique to a certain store. Unifying the loyalty experience and allowing participants to collect and redeem rewards at any store is yet another feat a 21st-century pharmacy loyalty program needs to be able to achieve.
The Best Loyalty Program Features for Pharmacies and Drugstores
With our goals clearly defined, let’s take a look at what kinds of features pharmacy loyalty programs have to offer.
A balanced ruleset for the program
While planning a loyalty program, it’s vital to think ahead and consider the point-to-cash ratio. If you’re too strict, and members have to work (or spend) too much in order to earn rewards, they might be discouraged from participating. Likewise, being overly generous would mean you’re giving discounts or gifts to customers who would stick by you regardless. Still, the rule of thumb is to start with a stricter approach and become a bit more generous later on. That’s because when pharmacies and drugstores suddenly add restrictions and make it more difficult to earn points, customers end up having a negative experience.
Digital loyalty cards
Physical loyalty cards have a long history in pharmacies and drugstores. Convenient keyring cards from drugstores like CVS even made them slightly less intrusive. However, cards are still easy to lose or leave at home. Digital membership cards, on the other hand, are available through the user’s smartphone. That means they are always easy to access and can be safely stored alongside other virtual coupons in your customers’ wallet app., plus digital cards allow you to connect the online and offline customer profiles to get a holistic view of their shopping habits. For an even more wholesome experience, consider implementing a Mobile Wallet solution or building a loyalty app that lets customers easily access their available loyalty coupons.
A comprehensive membership page
The online membership page is the main hub for the program. It is where participants can review the rules, access their reward history, and redeem points for online coupons. The page should be accessible and easy to navigate. And it should show users all of the benefits they have access to, re-confirming that registering for the program was a great way to get more value from your brand.
The Best Loyalty Program Types for Pharmacies and Drugstores
Earn & Burn loyalty programs
The most straightforward option, earn & burn programs are all about collecting points with purchases and other actions, which can be cashed in for various rewards. Most drugstore and pharmacy customers will already be familiar with the concept, since it has been used in the industry for decades. Your customers can earn points for making purchases, filling prescriptions, or linking prescriptions to their profile. Pharmacies should also consider introducing point expiration, to encourage customers to spend their points regularly, rather than waiting around for years for the perfect moment.
Tiered loyalty programs
Tiered loyalty programs can also work well in the drugstore space. With tiers, members accumulate their points to rise in the ranks and metaphorically ‘climb the ladder’. Higher tiers are associated with more alluring benefits, which in turn incentivizes customers to keep returning. Tiers give members a sense of progression, coupled with the fact that once a person reaches a higher tier, they’re less likely to switch to another pharmacy because it would mean giving up their hard-earned benefits. Rite Aid’s Wellness+ loyalty program is a great example with three membership tiers: bronze, silver, and gold. Each tier contains a unique set of benefits and gives customers a perfect reference of how much they need to spend to achieve each tier.
Unlike tiers and earn & burn, perks programs don’t use points at all. Instead, all members are entitled to all the available benefits after finishing the enrollment. By doing so, perks programs focus more on community building, boosting enrollment, and fostering a sense of gratitude among members. This type of program is also the easiest to run.
A Fulfilling Reward System
A diverse reward catalog
The loyalty program would only work if the benefits are attractive enough to entice customers to strive for them. Luckily, pharmacies and drugstores have plenty of options to choose from: standard discounts, members-only coupons, free delivery on online orders, and even free product samples to introduce customers to OTC and HBA products. CVS recently revamped their ExtraCare BeautyClub rewards program in order to meet customer demand for an experiential program. Flexible rewards helped them meet the demand, by allowing customers who spend the requisite amount to choose their reward each month. That freedom to choose is a powerful engagement tool.
With an offer management module, a wide range of reward campaigns can be added to the pharmacy loyalty program. This feature gives you the ability to set up an offer that grants bonus points for a selected group of product categories or to double the reward for 90-day prescriptions. In short, offer management is the key to pushing product discovery and to promoting a healthy lifestyle.
Loyalty Communities, like “Baby Clubs”
Loyalty communities are similar to tiers, with the exception that members need to fulfill certain requirements in order to enter. In exchange, membership won’t expire that easily. Think about them as insider groups that can be dedicated to a certain audience, such as customers over age 65, pet owners, athletes, or parents of young children. Those who fulfill the criteria can apply to the group, and once they’re in, they receive access to benefits such as discounts, educational content, members-only sales, etc.
Incentivizing non-transactional behavior
Encouraging a healthy lifestyle
If promoting a healthy lifestyle is high on your agenda, a pharmacy loyalty program is a great way to reward customers for making better choices. For example, you can ask members to exercise more by tracking their progress through Fitbit. Once they connect their device to the program, bonus points can be awarded once a member hits certain milestones.
Engaging customers outside of the buying cycle
Rewarding useful customer actions that aren’t tied directly to transactions go a long way as they subtly change customer behavior, driving other important KPIs. Offering badges and challenges for weekly logins would subtly push members to log into their profile frequently to check the relevant offers. The same can be done for newsletter subscriptions to ensure participants won’t miss the latest news.
As for educating your customers, the best tactic is to set up the content you wish to spread among customers, and then issue a set amount of points each time someone watches the video or reads the article. This feature is particularly effective in the health, childcare, and beauty spheres. One example of this content could be to give advice to new parents about infant health and babycare products.
Also to prevent cheating, create a quiz at the end to ensure participants properly understood the content.
Social media contests
The effect of loyalty programs extends to social media as well. In addition to receiving points for linking their Facebook, Twitter and Instagram accounts, members can earn rewards for participating in social media contests, such as a hashtag contest or an Instagram contest. These features undoubtedly lead to positive word-of-mouth and can even help you discover brand advocates.
6 Inspiring Drugstore and Pharmacy Loyalty Programs
In our Global Customer Loyalty Report 2022, we walked away with one critical finding: 72% of companies with loyalty programs plan to revamp in the next three years. Perhaps that’s why it’s no surprise that so many of the inspiring drugstore and pharmacy loyalty programs that we’ve written about have recently undergone a revamp. Get ready to get inspired with six exemplary pharmacy loyalty programs.
1. ExtraCare Rewards Program – CVS Pharmacy
ExtraCare is an American retail and health company owned by CVS Health, one of the largest pharmacy chains in the United States. The company’s loyalty program has a strong focus on the mobile app, which doubles as a digital loyalty card. In July 2021, the program was revamped to give ExtraBucks rewards (the equivalent of 2% cashback) to customers after every transaction. Before this change, ExtraBucks were distributed on a quarterly basis.
- 2% back ExtraBucks Rewards currency every time members shop
- $5 worth of rewards for filling 10 prescriptions
- $3 ExtraBucks Rewards birthday treat
- Weekly ad deals and special prices for ExtraCare card holders
- Up to $50 in ExtraBucks Rewards each year for choosing CVS to fill prescriptions, get vaccinations, and other services
- ExtraCare BeautyClub® program for members who love to buy beauty products, including additional perks and savings
- CarePass® is an additional paid subscription program that offers same-day delivery, monthly rewards and savings, as well as 20% off CVS Health® branded products.
Why it works
- ExtraCare is a strong program to begin with, but additions like the BeautyClub® program gives shoppers with a specific interest (cosmetics, haircare, etc.) a more targeted experience. For drugstores that serve a large and diverse member base, these types of clubs can help make every interaction with the pharmacy feel more relevant to each members’ lifestyle.
- The CarePass® subscription program is a great way to give loyal and committed customers additional thanks, as well as build an additional revenue stream.
- Finally, the fact that the revamp of the ExtraCare and BeautyClub programs was based on customer feedback is another reason the pharmacy, health, and convenience giant, CVS, remains so popular among its loyal base.
2. Rite AidRewards – Rite Aid
A prominent drugstore chain in the US, Rite Aid has approximately 2,500 stores across the country. The loyalty program has become a cornerstone for the company, and, formerly called wellness+, it’s now called Rite Aid Rewards.
- Customers earn 10 pointsfor every 1 dollar spent on eligible purchases they make
- Members earn 250-750 points for every qualifying prescription pickup
- Points can be converted into BonusCash, which can be redeemed at Rite Aid locations
- Members can take part in monthly BonusCash challenges of their choice, earning bonus points by buying highlighted brands and products
Why it works
- Cashback is a great way to give members value in the drugstore world. Customers want to spend money on the items of their choice, so cashback can be a more straightforward option than managing a huge rewards catalog, especially for fast-moving goods.
- In a seemingly straightforward retail experience like pharmacies and drugstores, challenges add an element of fun to the loyalty program and keep the experience fresh from month to month.
3. myWalgreens – Walgreens
Walgreens operates as the second largest pharmacy chain in the US behind CVS Health. The company revamped its loyalty program in 2020, myWalgreens, is accessible on the app, and additionally members can use their phone number to access their card while in the store.
- Members earn 10 Balance Rewards points for every 1 dollar they spend on almost all products and services
- Every 30-day prescription filled is worth 100 points
- Every 1000 points grants $1 off the next purchase
- Not using the program makes a member inactive and they lose all their points
Why it works
- Never underestimate the power of a mobile app. Today’s pharmacy customers are looking for speed, convenience and experience.
- A mobile app can help connect the loyalty program experience with shopping and prescription filling together organically.
- As of 2021, Walgreens’ popular app had been downloaded nearly 70 million times.
4. Boots Advantage Card — Boots
Health and beauty retailer and pharmacy chain Boots is the leading pharmacy chain in the UK. Unlike its American counterparts we’ve written about, the UK-based company hasn’t changed their name or approach in the last few years. However, they did introduce a stricter point expiration policy this year, dropping the 2-year expiration policy down to one year, causing a stir among members. All in all, the earn & burn style program is still in action, with a heavy emphasis on mobile apps and personalized offers.
- Customers earn 4 points for each £1 they spend. Points can be used directly to pay for products
- Students who purchase using a student ID automatically receive a 10% discount
- Three insider groups, pregnant and/or newarents, customers aged 60+, and beauty lovers receive additional benefits
- The membership account is constantly refreshed with targeted offers, e.g. members of the Parents Club receive exclusive deals
Why it works
- Boots Advantage Card is another program that has created interest/need-specific groups within the loyalty program, making it easy for the company to create targeted offers for these groups.
- Free click-and-collect and free delivery for purchases over the minimum amount make shopping convenient for customers with a variety of shopping preferences. And the Boots App brings shopping and loyalty together in one convenient place.
- But one word of advice: be careful about introducing new restrictions to your loyalty program. You risk upsetting the people who love your program the most. It’s better to start strict than to introduce “cutbacks” later on.
5. Watsons Membership — Watsons
Watsons is a health care and beauty care chain store in Asia with 7,600 stores and 1,500 pharmacies in 13 countries. The loyalty program has different branding in each market, targeting its customers with special offers and promotions.
- The system uses both physical cards, eCards and country-specific mobile apps
- Point earning varies by market
- Watsons runs multiple offer campaigns in each country, providing constant bonus point opportunities
- Members earn 5x more points during their birthday month
Why it works
- Watsons smartly treats each country of operation differently. Some regions in APAC value savings more, while others value a mobile experience, for example.
- Their use of individual branding and bonus point campaigns across the regions helps them target local consumer bases with more ease.
- In a mobile-first part of the world, their showcasing of each mobile app makes it easier for their customers to connect.
6. MedPlus Advantage – MedPlus Mart
MedPlus Mart is a pharmacy retailer based in India, with over 1,500 locations in multiple countries. They retired their former flexiRewards program and introduced MedPlus Advantage, a subscription program for individuals, couples and families. This is a radically different approach than the other rewards programs, because instead of focusing on brands and products, the program focuses on medical tests and check-ups, providing a insurance-like peace of mind.
- Free Diagnostic Tests worth the membership subscription plan fee
- A flat 75% discount on all diagnostic tests, health profiles and preventive health check-up packages
- A flat 50% discount on all online & offline consultations with MedPlus in-house doctors
Why it works
- A subscription loyalty has a lot of potential for pharmacies that can offer health services, which have a high value in the consumers’ eyes. This can be especially effective in areas where medical services come at a high cost or are not covered by insurance.
- MedPlus Advantage also has a very clear approach to describing the benefits clearly to potential members, which is a must when complex medical services are on offer.
MedPlus Advantage also has a very clear approach to describing the benefits clearly to potential members, which is a must when complex medical services are on offer.
The Time to Start Planning Is Now
If you wish to retain your customers as a pharmacy chain or drugstore, then you need to act quickly. We love sharing our knowledge, so feel free to book a demo or send an RFP and we’ll show how our loyalty platform can work for your business.
And don’t forget to download Antavo’s Customer Loyalty Report 2022, an in-depth report that showcases current and future industry trends to help you navigate the world of next-gen loyalty programs.