Top 7 Crazy Good Loyalty Programs You Have To See

Cynthia Vespia9/22/2021

What are loyalty programs ?

Loyalty programs are a popular way for companies to show appreciation for their customers. These programs use a variety of rewards as incentives for customers to keep coming back and making purchases. The customer benefits from the rewards, and the company benefits from increased customer loyalty and reduced customer churn.

What is a Loyalty Program?

Loyalty programs are used for marketing purposes by different companies. The loyalty programs are created in a manner which rewards customers for repeat business. Due to these perks, the customer is more likely to continue shopping with a certain brand or business rather than choosing a competitor. So, a loyalty program could also be considered a rewards program.
Loyalty programs offer different styles of rewards based on the business which is offering the program. A reward can be anything from a discount coupon, an add-on item, free trial, or upgrade. The options are limitless when deciding what type of rewards to offer within a loyalty program.

Who has the best loyalty program rewards?

The best loyalty program will function easily for the consumer. This means the information will be clear and the redemption of reward points will be smooth. Companies often make changes to their loyalty programs to improve results. The most successful loyalty and reward programs have these objectives in common-

Outstanding Rewards
If a customer isn't interested in the rewards being offered, they're not likely to stick with, or even sign up for, a rewards program. Research has shown that 57% of customers will sign up for a loyalty program to save money on future purchases. Cash back rewards and discount codes are all compelling reasons a customer will sign up for a loyalty rewards program. Other options like exclusive products or trial offers are also motivational tools to increase sign-ups.

Emotional Connection
Customers will maintain brand loyalty when they feel emotionally connected to that brand. A report from Forrester noted that emotion is a strong motivator when it comes to customer loyalty. Additionally, it stated that 89% of Americans would switch brands if it meant supporting a cause they're interested in.

An example of this is the company TOMS. Members of the TOMS Passport Rewards initiative can use their accumulated points to support a charitable cause. For instance, members have the ability to redeem points for a $25 donation towards after-school groups and community development programs in the United States. This makes TOMS rewards program appealing to customers who want to be involved with a bigger cause.

7 crazy good loyalty programs

Like any marketing campaign, a loyalty program needs effective execution. Follow these tips from these seven successful loyalty programs. To make sure the execution of a loyalty program follows the case study of each program below.

1. UO Rewards by Urban Outfitters
The multinational lifestyle retailer Urban Outfitters has created a popular rewards program called UO. As a UO program member, the opportunity to earn points by shopping in-store or online has been highly effective. Another manner in which members earn points is by posting to social media using the company hashtags. This not only gives the members the ability to gather more points but also creates added visibility for Urban Outfitters. Points can be redeemed for perks such as exclusive offers, event tickets, and special merchandise. The more points earned the higher on the tier level the member moves up. At the silver and gold tiers, there are many more perks to choose from.

2. e.l.f.'s Beauty Squad A Free Membership Program
Like most rewards programs, the e.l.f. Beauty Squad membership allows shoppers to earn e.l.f. reward points on purchases. The e.l.f. the program goes one step further by offering a free gift at sign-up. Program members will earn points through social media posts and by referring friends to the e.l.f. Beauty Squad program. There are three levels of the membership program including EXTRA, EPIC, and ICON where points can be redeemed for free products or discounts.

3. American Airlines' AAdvantage
Flying on American Airlines, or its partners earns customers miles. These miles can later be redeemed for exclusives such as flight upgrades, hotel stays, car rentals, or vacations. There's also special access to the Admirals Club airport lounge and many other perks. These benefits are earned based on the price of the airline ticket purchased rather than the length of a flight. Frequent flyers with American Airlines can see how the rewards program is benefiting them. Most frequent flyers have the opportunity to become gold members which unlocks more perks.

4. Starbucks Loyalty Program
The Starbucks loyalty program has been touted as one of the very best loyalty programs to date. Starbucks takes a personalized approach by offering 'Star Points' to customers each time they make a purchase. The more stars that are earned, the higher the reward level when those points are redeemed. Users of the Starbucks app also receive notifications on special offers.

5. Sephora Beauty Insider
Three tiers exist in the Sephora Beauty Insider program. The White, Black, and Gold tiers offer exclusive events, discounts on popular brands, private sales, and special gifts of choice every time 200 points are earned. They also offer a birthday surprise for members which gives the beauty insider program a personal touch.

6. Best Buy Reward Zone
Best Buy's Reward Zone is a simplified reward system where every dollar spent earns a point. The program works well for big purchases. For example, a piece of electronics that costs over $2,500 will earn members perks within the second tier of the Reward Zone system. This includes free movie rentals or music streaming, free shipping, and an extended return policy.

7. Neiman Marcus InCircle
Neiman Marcus' rewards program is a little different than the others. The InCircle benefits aren't redeemable until $3,000 is spent. However, once that level is reached the customer gains access to invitation-only events, advanced sale notices, and double points on some purchases.

Loyalty programs outside of the restaurant industry

Loyalty programs within the restaurant industry are commonplace. Anytime a diner within the program spends in the restaurant they earn points that can later be redeemed for discounted or free products.

4 takeaways from restaurant loyalty programs for other industries-
  • Be straightforward- Complex loyalty programs are confusing. The reason customer loyalty programs in restaurants remain successful are because it benefits the customer. Start with a program offering loyalty rewards to keep customers coming back.

  • Consider Rewards That Aren't Monetary- To build customer loyalty it takes an emotional connection. When customers feel important they'll often become brand advocates and stay with that brand long term. Offering new customers and existing customers exclusive opportunities through a loyalty rewards program will build customer loyalty and grow business.

  • Go Digital- A successful customer loyalty program should be digitally friendly. Most customers want to have the convenience of accessing their rewards programs from their mobile devices. The days of a physical punch card are in the past.

  • Request Honest Feedback From Existing Customers- The best loyalty programs are the ones that value customers. Programs work when they reward customers who spend money and join loyalty memberships. When the customer experience is heightened it will increase customer loyalty. The loyalty program that benefits customer loyalty will create a customer lifetime value.

Cons of loyalty program?

Not all loyalty programs are the same. Between the different tiers and reward offers it can be confusing to the consumer. This is often a barrier to join loyalty programs.

Some loyalty program cons the business face include-

1. Difficult to Gauge Loyalty Behavior
2. Balancing the Bottom Line
3. Market Saturation
4. Inconsistent Profitability
5. Limitations of Loyalty Data

Technology's impact on loyalty programs

Technology is a new manner of personalization and convenience to increase customer loyalty. The advancement of technology benefits customer loyalty memberships through digital optimization.

It's important to make sure that the loyalty program is easy to use via a mobile device. When an app isn't optimized that's when a customer can have a bad experience.

Having the program stand out with interactive features is another important part technology plays within customer loyalty programs. The more seamless the user experience is, the more it will increase customer application. Make sure that all details of the program are digitally optimized so the app or website doesn't keep customers waiting too long.

The future of loyalty programs

Customer loyalty programs have been around for a long time. They are used as a marketing tactic to increase customer retention. A small business interested in exploring the benefits of a customer loyalty card should rightly be curious about the future of loyalty programs. As the world focuses on a digital, cashless society, the value of loyalty programs will remain but the perks may need to shift along the way to stay relevant.