Customer reward programmes are used by retailers to increase retention, purchase frequency, lifetime customer value and referrals. They used to consist of punch cards and point systems but as technology, smart phones and apps have grown ever more sophisticated, it’s no longer about free gifts, exclusive discounts and early product releases, but a means of collecting a wealth of data about your customer and offering them a truly personalised, pain-free shopping experience that enhances their every day lives. Here are 3 retailers getting their rewards right:
With more than 10 million members, Sephora’s hugely popular Beauty Insider loyalty programme is proof of how building a community can really help to drive loyalty, especially among women, who are more likely to be a member of a loyalty programme than men (84% vs 70%).
The scheme, which is available to customers in the US and Canada, is split into tiers: Beauty Insiders, VIB and VIB Rouge. The latter is obtained once a customer spends $1,000 in the year, with VIB Rougers often taking to social media to boast about their status and the rewards they receive, such as exclusive products and events, access to the Sephora Beauty Studio and early access to products and sales.
Tier-based schemes are effective because people like to feel part of something, especially when they are one of the few at the top and the envy of those on a lower tier.
In addition to a rewards program, customers can use the app to place an order, pay for the order and even access streamed music. As members earn stars toward rewards in the ‘My Starbucks Rewards program’, they can redeem the rewards in real time. The app reinforces the Starbucks brand as a lifestyle enhancement.
With its annual fee, the program, called “Lululemon Practice,” resembles Amazon Prime, with its annual subscription cost with free shipping and other perks. For $128 a year Canadian (about $96 USD), members receive:
- Either trousers or pair of shorts designed exclusively for the programme;
- Access to monthly local yoga or fitness classes;
- Early access to Lululemon’s weekend Sweatlife Festivals and other events;
- Personal development programmes;
- Free expedited shipping on e-commerce orders.
The main message behind the rewards programme is all about “empowering you to live your best life” and signage at stores include tag lines such as “Your best life starts here” and “Last chance on a lasting experience”.