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Build a Loyalty Rewards Program Your Customers Love

5 min

Every brand wants to create a loyalty reward program that keeps customers interested, engaged and coming back for more. Ecommerce merchants and retailers have found this feat much easier said than done. In fact, it may now be more difficult than ever to gain a customer’s genuine loyalty.

A successful loyalty rewards program can increase customer engagement, retention, and repeat sales. The benefits of an effective loyalty program are far-reaching and invaluable to a brand. According to Marketing Metrics, a repeat customer has a 60%-70% chance of converting. Also, on average, only 8% of visitors come back, but they account for a staggering 41% of a company’s revenue.

Dive deeper into the world of opportunities opened up by a reliable loyalty program with our podcast:

To have an engaging loyalty rewards program, retailers must adopt some non-negotiable strategies.

So, what’s the secret sauce of an alluring loyalty rewards program?

360-degree customer engagement

Sure, earning points for buying is important. But if that’s the end-all, be-all of your loyalty program, it’s lacking and simply ineffective. To encourage real brand engagement, you should awards points for different activities – like referrals, social media engagement, email signups, reviews, photos uploaded to your website… the possibilities are endless. The more ways you can think of to dish out points, the more engaged your customers will be.

Don’t just take my word for it! Take Predator Nutrition, for example.

Predator Nutrition, a leading provider of sports nutrition supplements, was looking to engage its customers and drive repeat sales. They implemented a high-impact loyalty rewards program with a built-in 360-degree engagement module. The program rewarded members not only for purchases, but also for interactions on the web and social media. Some of the activities are as follows:

  • Create an Account – 500 points
  • Refer a Friend – 300 points
  • Birthday Bonus – 100 points
  • Write a Review – 100 points
  • Newsletter Sign-Up – 500 points
  • Follow on Twitter – 100 points
  • Follow on Instagram – 200 points

This 360-degree engagement module produced results beyond their greatest expectations. Predator Nutrition received thousands of customer enrollments in just one quarter. It achieved immediate business benefits in the form of 33% higher Average Order Value (AOV). Also, 1.7 times more purchases from customers who redeemed loyalty points.

Predator Nutrition loyalty rewards program

Omnichannel capability 

Loyalty programs that are omnichannel-capable, are all about giving customers the freedom to choose how to interact. Today’s fast-paced society demands convenience. If your loyalty rewards program isn’t right up your customer’s alley, it won’t even tempt them.

Customers should be able to interact with your loyalty program through any channel or device they prefer, every step of the way. If it’s not relevant to the customer, forget about it (because they will!) Also, make sure your message and branding are consistent throughout each channel.

Guess who’s getting it right. Starbucks!

Starbucks is famous for its omnichannel engagement model. The Starbucks Rewards system uses this approach to make the coffee buying experience more convenient for customers. That’s why it’s not a surprise that $1.2 billion is loaded on the Starbucks mobile app and the company’s loyalty cards for future purchases.

Beginning with their free rewards card, customers can immediately start earning rewards when they buy. Starbucks has enabled customers to check their gift card balance, points, and mobile orders via phone, website, in-store, or on their user-friendly app. All channels correspond with each other in real time, eliminating the possibility of a lapse in communication. This omnichannel capability is attractive to customers, encouraging engagement on many levels.

Starbucks loyalty rewards program

Moving up the ladder

Giving rewards to customers based on their journey with your brand is an incredibly effective strategy. People naturally enjoy taking up a challenge. Your customers will be striving toward the next tier, greater benefits, and exciting perks, constantly tempted to earn more points!

When customers earn the right to move up the ladder for maximum rewards, they feel valued by your brand. Also, if you offer multiple channels and points for various activities, they’ll engage with your brand in more ways than one.

Sephora’s successful tiered program

Sephora has their customers moving up tiers based on dollars spent each calendar year. This is a prime example of exclusivity for committed, loyal customers. They take pride in their status as they move up the ladder of rewards.

The concept of reward tiers in Sephora’s program adds an aspect of gamification that influences customer behavior and drives engagement.

The program is based on 3 tiers:

Beauty InsiderFree to join!

VIB (Very Important Beauty Insider) – Earn this status by spending $350 in a calendar year!

VIB RougeAchieve this status by spending $1000 in a calendar year!

Rewards offered at each tier include freebies, makeovers, exclusive invitations to events, and private access to Sephora’s hotline. Only a select few customers reach the VIB and VIB Rouge Tiers. This makes Sephora’s program genuinely exclusive and truly effective.

Sephora's tiered loyalty rewards program

Notifying the customer 

Real-time notifications on the website are encouraging new signups and pushing current members toward the next reward. An immediate notification that includes a link to the loyalty rewards program should appear every time points are (or could be) earned. It will propel customers to enroll in the program. If they have already enrolled, it acts as a reminder. Real-time notifications are a powerful strategy to drive customer retention.

The Sigma Pink Perks Loyalty Program

Global beauty company Sigma Beauty has implemented the ‘Pink Perks’ customer loyalty program to rapidly build up a base of customers who are highly engaged with its brand.

The brand is using the program’s built-in, real-time notifications tool to ensure that its customers are constantly aware of the points they earn. The brand has also enabled birthday notifications on its website to surprise users with special reward points. In addition, Sigma Beauty notifies users post-purchase to encourage reviews and referrals. Real­-time notifications have allowed them to continually engage and update its loyalty program customers.

Sigma Loyalty Rewards Program

Summing up

Creating an efficient loyalty rewards program isn’t as complicated as you might think. Making it direct, practical, and relevant will basically guarantee high customer engagement. Know your customers and tailor your point system toward the activities they’re already doing, or at least are highly likely to participate in. Customers that engage with your brand become part of your business family. There’s no greater loyalty than that!

Do you know some more engaging loyalty rewards programs? Or maybe you’ve created one for your brand and you’ve got other useful tips?

Feel free to share your experience in the comments!

And if you’re looking for more inspiration, check out this loyalty program infographic and download our Loyalty Program Success Guide.

Samir Palnitkar
Samir Palnitkar
Samir Palnitkar is the Founder of Zinrelo, a technology company that specializes in loyalty rewards programs. He is a serial entrepreneur who has done four successful startups prior to Zinrelo. He has over 20 years of industry experience, has been awarded five technology patents and has written two technical books. You can find Samir on LinkedIn here and on Twitter here.