What Makes a Loyalty Program Successful?

May 22, 2020 | Editorial Team | Rewards Program

An effective loyalty program is one that keeps customers’ needs in mind and is designed to offer them perks that interest them. In this article, we’ll look at a few brands that have kept the customer at the core of their marketing strategies and aced their loyalty programs.

REI

Outdoor recreation retailer REI offers a lifetime membership to its co-op program for $20. REI is known for having one of the best return policies in the business. Their membership program keeps a log of everything members have bought, creating a seamless return process.

Loyalty program benefits:

10% back on purchases, along with perks like members-only specials and access to the REI community with classes, events, and REI adventures.
Member-only sales where members can get up to 50% off.
Members get a chance to influence the future of the company via an annual ballot.
REI Garage Sale events help customers buy returned gear at major discounts.
For REI members, the outdoor classes, events, rentals, shop series, and REI adventures are either massively discounted or completely free.
The REI Co-op invests in the future of the outdoors by giving back nearly 70% of its profits.

What makes it work: With their rewards program, REI keeps their brand at top of mind, encourages customer loyalty (and return business), and paves the way for continuous, meaningful customer engagement.

Target Circle Rewards Program

Target Circle combines benefits to customers with making an impact in their local community.

Loyalty program benefits:

Members have an opportunity to cast votes to help direct Target’s giving to approximately 800 non-profit organizations in their local communities.
Members earn 1% on Target purchases and get early access to sales, personalized deals, and birthday perks such as 5% discount and the chance to vote on Target’s community giving initiatives.
The Target app has several Circle offers. Offers vary from 5% to 50% off in categories such as groceries, clothes, furniture, baby products, health, seasonal etc.
To start accruing earnings and votes, customers need to scan the Wallet barcode in the Target app or use their phone number during checkout in stores or log in to their Target.com account when shopping online. The easy-to-use app makes earning easy.

What makes it work: With personalized perks like birthday discounts and opportunities to provide community feedback, the Target Circle rewards program offers a level of exclusivity for repeat buyers who want to create a great experience for themselves and their fellow shoppers.

Nordstrom Rewards Program

Nordstrom, Inc. is a leading fashion retailer based in the US. Their rewards program, “The Nordy Club”, allows customers to earn one point for every dollar spent at Nordstrom, Nordstrom Rack, and HauteLook.

Benefits of The Nordy Club program:

Points can be cashed in for store credit and holders of Nordstrom credit cards earn points three times faster.
Special deals, online reservations, and in-store trials
$40 bonus note to new cardholders when they make any purchase at Nordstrom, Nordstrom.com, or Nordstrom Rack using their new card

What makes it work: The Nordy Club offers personalized experiences for every customer, helping the brand form strong relationships with customers. Personalized and enhanced experiences, including exclusive access to product and events, make customers want to return and remain loyal to the Nordstrom brand.

Toms Passport Rewards

Toms shoes offer Toms Passport Rewards with three levels of reward programs: Bronze, Silver, and Gold.

One of the most interesting aspects of Toms’ model is that they invest in causes. They started with the ‘one for one’ program, in which every purchase of Toms bought a pair of shoes for a child in a developing country. This program proved extremely successful and was positively received by customers. Toms’ Passport Rewards program rewards their cause-oriented customers with exclusive offers and gifts.

Benefits of TOMS Passport rewards

Member discounts, sweepstakes, exclusive sales, early access to new products, and an anniversary gift.
Points can be collected on every purchase. After reaching a certain amount of points, members move into the trailblazer program, and receive additional benefits such as free shipping and Toms freebies.

What makes it work: Cause-oriented customers want to see that brands not only share their beliefs but incorporate them into how they conduct business. Toms leads in this area by making customers a part of a charitable endeavor with each purchase they make.

Yon-Ka Paris

Yon-Ka Paris is a French skin care brand and leader in aromatherapy. With their rewards program, Yon-Ka Rewards Program, they achieved a 126% increase in sales due to 2X points promotions. They also experienced a 48% increase in total revenue and 46% increase in repeat customers. Read more about how they did it.

Benefits of Yon-Ka rewards program:

Customers are offered multiple point-earning opportunities with simple actions to encourage engagement.
Reward tiers are based on various customer segments to help drive higher participation in the rewards program.
The three tiers of Yon-Ka’s rewards program offer shoppers a way to get more benefits as they spend more and move into higher tiers.

Checklist: Essentials for Launching Your Own Loyalty Program

Launching a successful rewards program requires careful planning and execution. Make sure you select a loyalty partner that can provide the following: