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Do Loyalty Programs Work In Luxury Fashion?

, • by • October 11, 2018

You might think that luxury fashion and loyalty programs are incompatible. Or maybe you feel offering points is a cheap and commercial tactic. (Agreed!) But the truth is that privilege programs are no different from any other tool in your arsenal: you can mold and reshape to fit your needs.

Luxury fashion lives and dies on customer engagement. People don’t come to you for discounts or bonus points, but for VIP treatment they can’t get anywhere else. A change in perspective, along with the introduction of new retention practices, can significantly strengthen brand loyalty while increasing customer spend.

How should consider applying a loyalty program to luxury fashion? Here are four angles to take.

1. Offer Membership Tiers Instead of Loyalty Points

It’s important to understand that earn & burn-style campaigns aren’t your only option. Instead of focusing your program solely on points, experiment with a tier system based on behavior. That behavior could be spending habits (the more money your customers leave in the store, the higher tier they’ll reach), or a combination of things, e.g. completing a challenge, donating to charity, or visiting your website every day for a specified period of time. All of these activities would, in turn, unlock tier-specific rewards.

These exclusive gifts should be one-of-a-kind items that aren’t available anywhere else. Designer phone backgrounds, limited edition product samples, and rare art prints are just a few examples. Be creative!

The benefits of tiered loyalty programs:

  • Easy to understand
  • Offer meaningful rewards
  • Emphasize long-lasting VIP status

In a points-based system, a customer can easily run out of points by spending them. However, in a tier-based system, the benefits don’t disappear – no matter what. In this case, the customer will work to remain in a higher tier, in order to keep the benefits they want.

For example, StyleBop runs a tiered loyalty program with the help of Antavo.  There are five categories in total and, as you ascend through the tiers to become an Icon or Elite member, you unlock various rewards along the way. The rewards could be a secret members-only promo day or a special bonus after each purchase. And the icing on the cake is the ability to remove the expiration from StyleBop membership points.

StyleBop has partnered with Antavo to create a tier system that extends discounts and exclusive rewards to members.

StyleBop has partnered with Antavo to create a tier system that extends discounts and exclusive rewards to members.

2. Create a Feeling of Uniqueness with Personalized Experiences

Unlocking permanent bonuses and benefits with each new tier is another alternative to point-based loyalty programs. It works in conjunction with tiers, but as customers work their way up through the ranks, they receive a more personalized offer through special services they can keep, as well as rewards that are tailored to their preferences.

Here are a few incentives to include in an attractive perk system:

  • Extended returns and free delivery
  • ‘No questions asked’ money-back guarantee
  • VIP customer service contact
  • Personalized dashboard
  • Access to members-only sales

Again, the emphasis should be on creating desirable incentives for top-level spenders, which in turn strengthens loyalty towards your brand.

As a member of the Hugo Boss Experience, you’ll receive personalized notifications about exclusive sales and events, plus you’ll be eligible to return clothes without the receipt.

As a member of the Hugo Boss Experience, you’ll receive personalized notifications about exclusive sales and events, plus you’ll be eligible to return clothes without the receipt.

3. Keep Members Engaged With Experiential Rewards

Showing VIP customers that you are genuinely invested in building a relationship fosters trust and brand loyalty. Offering unique experiences is a great way to make this happen. You can maintain engagement in the following ways:

  • Motivate social butterflies to share their latest purchase on Facebook and Instagram
  • Hold members-only events and experiences, such as a meeting with a top designer
  • Organize a limited-entry cocktail party
  • Say ‘thank you’ to your top-tier customers with a signed gift
  • Allow customers to contribute to new fashion ideas

Those who are into luxury fashion pride themselves on being in a special relationship with their favorite brand. So the rewards you give them must be close to their heart as well.

Represent, a British streetwear label, gives VIP tickets to runway shows to the select few who have reached their lavish platinum tier.

Represent, a British streetwear label, gives VIP tickets to runway shows to the select few who have reached their lavish platinum tier.

4. Invite Them to Exclusive Clubs

Access (or lack of access) to perks is what adds true spice to a privilege program. Knowing that only the crème de la crème of the community is allowed to access a certain feature makes that feature more desirable for customers across the board. For this reason consider setting up special interest groups that revolve around your most popular products.

One stellar example is LuisaViaRoma’s Sneakers Club, where loyalty members can pay an entry fee in points in order to join. Once they’re in, they get early access to upcoming footwear releases ahead of the public. (Most of the time the product doesn’t even make it to the shop floor, because they are sold out to club members!) Special groups like this bring the true essence of exclusivity to a loyalty program.

LuisaViaRoma’s Sneakers Club (luxury loyalty program) sets a high entrance fee of 2,000 points, but in return you’ll get offers that are hidden for non-members.

LuisaViaRoma’s Sneakers Club sets a high entrance fee of 2,000 points, but in return you’ll get offers that are hidden for non-members.

Smart Customer Retention Instead of Discounting

Discounting hurts your business, and – especially in luxury fashion – your brand. Think of a loyalty program as a well-planned customer retention program where branding plays a very important role. Use language well, and incorporate mechanics that will help increase the sense of exclusivity.

Being able to change and adapt new strategies is the route to success. Transforming the ways engage with customers will no doubt yield positive changes in their spending habits. By applying gamification techniques, you can unlock even more new opportunities. (By the way, excluding people from special interest groups is one gamification tool.) Contests, exclusive clubs, or user-generated fashion content are other forms of gamification you can use for the luxury fashion audience without cheapening the privilege program.

The fact is, high-end customers want to be pampered after reaching a new milestone. You can easily fulfill their expectations by offering exclusive gifts, unique services and a personalized experience. People will love it!

If you would like to learn more how to run a successful customer retention program in fashion, download our ebook!

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Zsuzsa Kecsmar
Zsuzsa Kecsmar
Zsuzsa is CMO and co-founder of Antavo. She manages the marketing team, talks with experts all over the world, holds webinars, and edits all kinds of content (it’s really a lot of editing, but she loves it). She is a mother, likes working out, and making edible cosmetics.