Revamp Your Loyalty Program to Match Customer Expectations

In the post-covid era, customer behavior is changing rapidly. Brands are trying to cope with changing behavior by making significant changes to retain maximum customers.

But, what comes to your mind when you hear about “Customer Retention”? Loyalty Programs.

Did you know 75% of Americans are part of at least one loyalty program? Enhancing and improving your loyalty program is crucial to keeping up with customer behavior. Signing up a customer for loyalty programs by showing only discounts might be easy but maintaining the engagement level is undoubtedly not.

Today, loyalty programs are not about offering just discounts; it’s about offering value and delivering beyond expectations.

Ever wondered why brands are revamping their loyalty programs?

• Differentiate yourself from competitors- Offering discounts and exclusive benefits has become a common practice. However, revamping the existing loyalty program and offering a more personalized experience can differentiate your brand in the ocean of brands chasing the same goal.
• Match your customer expectations- Nobody denies the changing expectations of the customer. A revamp in the loyalty program shows your eagerness to match the expectations and value the bond with customers. Make it easy for customers to connect with you. One way is through an API-driven loyalty platform that creates a seamless customer experience.
• Better revenue and profits- Increased profits and better customer insights to provide personalized experience have been the constant reason brands revamp loyalty programs. A positive review given by your customers can help you more than anything. Revamp of a loyalty program allows you to use data from previous programs and improve them. Here are some of the top loyalty program revamps that helped brands increase their ROI from loyalty programs.

Nordstrom Loyalty Program

Nordstrom has revamped their loyalty program twice in 5 years. In their initial move to revamp a loyalty program, they started providing rewards and discounts to customers. In their second revamp after the COVID era, Nordstrom focuses more on digital transformation.

Their new loyalty program called Nordy Club focuses on personalization. According to Deloitte, 43% of surveyed executives invest in hybrid experiences to increase personalization and make their offering more innovative, and 38% plan to offer more inclusive experiences to increase customer loyalty.

Earlier, this program had four levels, but now, there are just three. Joining the loyalty program is free. You become an “Influencer” with $500 spend per year & if a customer spends $5000, they become the top tier member – “Ambassador.”

Nordstrom has found that customers who are members of the loyalty program tend to make purchases more often than those who are not. The Nordstrom Local concept in Los Angeles invites customers to gather and socialize over glasses of wine or beer, get a manicure and meet with personal stylists. There are also luxurious dressing rooms shoppers can use to try on outfits they ordered online. Nordstrom Local shoppers no longer need to go to the full-line store. Instead, they can pick up what they ordered online, have it altered or returned hassle-free.

Nordstrom has realized that the value created from these returning loyal customers is worth offering them the rewards. As a result, the company is placing a significant emphasis on its loyalty program. A step in this direction is revamping its older loyalty program to ‘The Nordy Club.’

New loyalty program offerings

• Omnichannel – According to Mckinsey, 60-70% of customers are shopping in an omnichannel way. Nordstrom has been leading the edge of digital commerce and executing a well-integrated “omnichannel” experience. They emphasize offering something for everyone no matter where the customer interacts with their brand.
• Convenience – Members can pay however they want. This flexibility in payment methods opens the benefits to young shoppers who don’t want to apply for a Nordstrom credit card. Though, offering Nordstrom debit/credit cards have exclusive benefits which encourage other members to level up their loyalty to the brand.
• Mobile – For many customers, their mobile is their constant companion, and they use it for their shopping journey. The new Nordy Club app will be the focal point of how members will engage with the brand. The app will feature an integrated dashboard allowing customers to easily interact with the loyalty program- access to their status always points balance, etc. They will be able to view which notes are available to redeem on the spot and schedule their Personal Double Points Days.
• Personalization – Every customer is different and does not want to be treated like another. Making the communication more relevant and unique is critical to sustaining interest in a rewards program. With the ‘Nordy Portrait,’ a unique user profile, customers can customize their style profiles, view their accumulated points, calculate how much they need to spend to reach the next level, and more. Each tier of the loyalty program will also grant access to personalized experiences, such as the option to have Nordstrom’s in-home stylists make a house call.
• Memorable – For any program to be successful and stand out, it’s essential to create a memorable experience for customers. Customers will have access to new product launches, be “First to Shop” at the company’s special price clearance event. Access to invite-only events is only available for customers in the “Ambassadors” tier.
• More earnings – The new program offers a faster earn rate than the previous one. Nordstrom credit card members will earn three points per dollar for purchases at their outlet, a 50 percent increase in the earn rate, and members paying in cash or a non-Nordstrom card will receive one point for every dollar spent and 2 points using Nordstrom debit/credit cards.

Nordstrom is not doing something out of the box. Still, it is moving from a transactional loyalty program to one that focuses on personalization, access, and service—giving customers a chance to feel special and valued! This helps Nordstrom stand out from its competitors and take advantage of having a powerful revamped loyalty program.

Victoria’s Secret Loyalty Program

Another brand that has recently revamped its loyalty program is Victoria’s Secret, PINK Nation. They have redesigned the mobile app, offering millions of active members a more innovative and intimate brand experience. In addition, the brand engages its members through promotions, special offers like giveaways, and sweepstakes. Pink Nation aims to connect with girls and be a part of their mobile world through innovative and fun ways.

New loyalty program offerings

• Mobile experience – The redesigned app has new features and functions, exclusive member-only offers and benefits, in-app games, engaging Content, and access to exclusive events. The app also offers college girls an opportunity to connect with their campus reps through PINK’s brand ambassador program.
• Exclusivity & experience – New members will receive an exclusive offer of their choice at the time of downloading the app, new offers each month. Other exclusive benefits include opportunities to shop new styles first and invitations to members-only events like parties, shopping trips, etc. Members will also have access to ultra-exclusive events with Pinkmodels, celebrities, and influencers.
• Easy interface –The new PINK Nation user experience features a new layout and more intuitive navigation. The new ‘Explore’ tab gives users access to trending items at PINK, including new products, shopping offers, and promotions to be added to their cart.
• Content on trends & tips – Today, content consumption has gone incredibly up from previous years. To nurture its customers, PINK Nation offers the latest content on styling tips and tricks. Coping up with mental health issues, content also serves the purpose of self-care through workout playlists, mental health tips & DIY hacks.
• Gamification – The fun and games tab featuring PINK’s very own match-three games is created exclusively for PINK Nation members. Also included is a tab called ‘Campus’ that serves as a hub of college life, including job searches. The app merges colorful, playful visuals with live elements, where a new challenge is presented every week at a specific date and time. A PINK merchandise gift card will be given to the top 10 winners each week. This section will also feature polls and quizzes, stickers and wallpaper for users to represent PINK Nation.

Sephora Loyalty Program

Known for its next-gen customer service, Sephora is always ready to revamp its loyalty program – “Beauty Insider.” They have done it three times since they started the loyalty program. Sephora’s Loyalty Program offers incredible features, from offering equal points to every member to letting top-tier members feel special on selected days.

New loyalty program offerings

• Equal points but varied privilege –  No other loyalty program than Sephora’s Beauty Insider Loyalty program has this feature. All members, irrespective of their level, get an equal point for every $ spent. But to signify the importance of their multiple levels, the top members, called “Rouge” members, get 4X points on point multiplier days. At the same time, basic members get 1X points.
• Mobile app features – After analyzing the data, Sephora realized that 80% of buyers use their phones even during in-house shopping. So, they launched their mobile app with reviews inside it to simplify the process, making it easy for customers. In addition, through the mobile app, customers can preview rewards for each product and save products for later.
• Privileges that people love – Sephora is a major player in the cosmetic retail industry. Having access to the top brands, founders and influencers allow Sephora to offer meetups, classes, and exclusive events with celebrities for their members. This extra effort from Sephora boosts customer loyalty and encourages customers to be part of this community.

Offering discounts is getting older; offering value and experience is the new target of modern loyalty programs. Revamping loyalty programs does not necessarily have to involve major changes, it depends on the brand’s current business objectives, changes in customers’ buying behavior, and evolving market trends. To ensure the revamps are meaningful and add value to a customer, it becomes vital to partner with a highly rated modern loyalty platform that offers 360-degree loyalty rewards programs.