Last Updated: February 2024
If you are looking to create your customer loyalty program, why reinvent the wheel? There are plenty of popular loyalty programs that you can learn from. This can be your shortcut to success while avoiding mistakes, ultimately helping you get better returns faster. There is no doubt that loyalty programs stimulate customers to spend more, refer friends and family and keep returning to your online store.
However, the costs of running a loyalty program can be high. They include not just the cost of rewards and soft benefits but also market research costs, technology solutions, marketing costs, and partnership/affiliate costs.
According to Beroeinc.com, a market research company, the cost of rewards comprises 65-75% of the overall costs of running a rewards program. While you may need to iterate several times before finding the right cost-benefit fit, you can certainly get valuable insights by observing the programs run by the world’s top e-commerce companies.
Brands like Amazon, Sephora, Gilt, and Nordstrom have done exceptionally well with their customer loyalty programs over the past few years. If you are launching a rewards program for the first time, a bit of analysis can help you answer key questions like setting reward criteria, promotion, and campaign management.
5 Brands That Did the Perfect Customer Loyalty Programs
So, if you do not have the experience of launching and running a customer loyalty program, this article will get you up to speed on some of the global best practices.
1. Amazon Prime:
The biggest USP of Amazon Prime is its user-friendliness. Unlike most loyalty programs, Prime members do not get points based on the purchases they make. There are no complicated rules either.
Instead, members get what they pay for. By paying $119 a year, members get a range of benefits, including free two-day shipping, unlimited access to movies, e-book, music, exclusive deals, and a 25% prepayment discount. Members can even earn a referral credit of $5 for every referral they make.
Amazon Prime offers a free 30-day trial to give customers a taste of the value-added services it has to offer. You also have the option of subscribing monthly – Prime Video for $8.99 or Prime Monthly for $12.99. Amazon Prime is popular because it saves customers on shipping costs and provides value-added services like gaming.
In Amazon’s own words: One Program, Many Benefits – something that other brands have not been able to match!
This international cosmetic chain loyalty program has three tiers – Insider, VIB, and Rogue with incremental benefits. For example, new customers are automatically assigned Insider status, which gives them access to free birthday gifts, free beauty classes as well as access to the Beauty Insider Community. With 350 points earned, you are upgraded to VIB level, which entitles you to free monthly gifts and free custom makeovers.
However, both Insider and VIB customers pay $10 a year for 2-day delivery. High spenders with 1000 points, on the other hand, get all these benefits for free with a private hotline and exclusive events thrown in.
One of the biggest attractions of Sephora’s loyalty program is its vibrant community where the customers can share beauty tips and advice. These conversations provide the company plenty of opportunities to push contextual product recommendations while also learning more about customer aspirations.
Gilt is another brand that has managed to make a killing with its loyalty program. As a designer brand, unlimited shipping and exclusive sales are probably not what you would associate with Guilt. However, this is what sets it apart from the rest. Early access to exclusive sales is a standard benefit across its four-tiered membership program- Insider, Select, Premier and Noir.
With 5000 points, one earns an upgrade to Select, which gets them early access to exclusive sales for 5 minutes. To qualify for Premier, one needs at least 10,000 points. Early access for Premier customers increases to 15 minutes. The top rung is the best that the program has to offer. Noir members get 30-minute early access to exclusive sales, dedicated customer service, waitlist priority, and exclusive previews.
While early access is only unlocked once you have 5000 points, Gilt does offer bonus points for specific actions. For example, referrals get 25 points each. To motivate new customers, Gilt offers 500 points as a ‘welcome bonus.’ The program leverages the early access benefit to the maximum, giving customers more reasons to keep buying from Gilt.
Nordstrom recently opened its loyalty program to customers that didn’t hold its branded credit card. Non-card holding members get 1 point per $1 spent. However, cardholders get twice the rewards as non-cardholders. The program includes 4 distinct levels- Member, Insider, Influencer, and Ambassador – providing benefits such as VIP access, private holiday experiences, bonus points events, free alterations, etc. It is a spend-based program where members must spend a minimum of $500 a year to continue getting premium benefits.
Customers buying products worth more than $5000 a year get up to 3 Personal Double Points Days, priority access to style events, and a number of other benefits.
Nordstrom represents a new trend where retail chains are tapping the online e-commerce market to boost sales and revenues. To this end, its loyalty program provides a good blend of access and exclusivity. The company’s focus on customer experience is something that e-commerce companies can draw lessons from.
The best loyalty programs often have one thing in common: strong customer support. If customers cannot get their rewards-related queries answered, your referral program’s enrollment rate could be affected. This could also contribute to customer dissatisfaction in the long run. Scaling a customer support team does require an upfront investment, and the returns only show after a while.
This is where outsourcing customer support can be a viable alternative. Helplama has been a trusted partner to small and large businesses in delivering 24X7 omnichannel customer support at an affordable price point.
As a better option, you can consider Saufter since it focuses on keeping both your agents and customers happy. This software helps you to improve the productivity of your customer service team with its AI-powered features, automated workflows, marketing automation, etc. Furthermore, it also comes with customized pricing plans.
So, what are you waiting for?