7 customer loyalty programs from big brands | Hachinet Software
Turning your customers into loyal customers is not an easy goal for every brand. To do this, they must develop strategies to drive customers back continuously. One of the useful tools to implement is the Loyalty Program.
In this article, Hachinet will demonstrate seven customer loyalty strategies with real-life activities of famous brands. Therefore, you can tailor it to your own business and service use.
1. What is a customer loyalty program?
Customer Loyalty is a marketing strategy to reward loyal customers who have a lot of frequent interactions with a brand.
By rewarding customer interactions, you can increase their loyalty and ensure sustainable growth for your business. The basic mechanism of this strategy is the more loyal the customer, the greater the reward for them.
There are tons of different rewards businesses can think of. In this article, let's take a look at seven loyalty programs from famous brands. Maybe you can find the right strategy for your business?
2. Loyalty programs from famous brands
2.1. Points program
The points program focuses on the core factor, the more customers buy, the higher the number of points they receive. One of the examples of this section is The North Face's points system.
Its calculation is very simple. Customers will receive 10 points for every $1 spent at retail stores/online shopping sites, and 5 points when consumed at outlet stores. This point can be used for future payments.
In addition, The North Face also launched an application to help users manage points, buy new products, viewpoint status, receive gifts, etc.
With this approach, we can increase the average spend of our customers, thereby motivating them to invest more in our brand and less likely to switch to competitors' products.
It is necessary to integrate points for both online and offline storage systems. Points need to be easy to understand and calculate. Thus, customers can quickly see their benefits without having to calculate too much every time they buy a product.
2.2. Paid Program
This program requires customers to pay a monthly or annual fee to become VIP members. The audience of the paid program is usually old and loyal customers unless your brand is a well-known brand.
The most important thing is to give members clear privileges. Take for example from the commerce site Barnes & Noble, which offers users a membership package for $25/year with benefits such as discounts, freeship, etc.
To motivate customers to join, it is necessary to show them that the return is greater than the cost of signing up for the membership plan (Example: save up to $60 for only $25/year). To promote further, it is possible to provide customers with reviews from previous customers to increase persuasion.
When applying for the Premium Program, make sure the customer sees benefits that outweigh the cost. In addition, there should be strategies such as using reviews of old customers to increase credibility and promote new customers to register.
2.3. Charity program
Not all Loyalty programs require discounts. The Charity Program aims to build a loyal customer group based on the common values between the brand and its users.
Talking about this strategy, it is impossible not to mention The Body Shop. In addition to bonus points and other VIP benefits, members can also donate bonus points to affiliated charities.
This also makes customers feel that their donation is more valuable. In addition, the charity will create opportunities to better reach customers, strengthen relationships with customers.
Affiliated charities should reflect, or partially reflect the brand's core values. If your brand values something, your target audience will often agree with you.
2.4. Ranking system
This system focuses on loyalty rankings. In other words, the more loyal customers are (the more they buy), the more incentives they get.
This is one of the great ways to interact and help the brand stay present in the consciousness of customers. Psychologically, ranking makes customers feel like they are participating in a game where the more they "play" the higher the ranking.
Take for example from the famous American cosmetic brand e.l.f. Their Beauty Squad system consists of 3 levels: Extra, Epic, and Icon. The higher the level, the more special offers customers receive.
To motivate customers, the brand shows them how many members have reached their respective quotas. This will stimulate users to want to go higher to have a certain status, as well as help them have a goal to aim for.
Calculate and divide rankings based on score, purchase frequency, or other key engagement metrics. At the same time, it must show users clear perks and incentives as they achieve higher rankings.
2.5. Target system
Progress is one of the most effective ways to motivate. If a person believes that they are about to achieve a goal, they will tend to put in more effort to achieve it soon.
This is also known as the incentive progression effect, used by many brands to effectively stimulate customer psychology.
One of the "big" sports products, Nike, also applies this method very successfully.
Nike has a range of fitness apps to help members achieve their athletic performance goals.
The Nike Run Club and The Nike Training Club apps will give customers badges and other rewards when they reach milestones such as walking 5000 steps, etc.
When customers hit those milestones, they tend to associate their success with the brand that has been with them. As such, Nike helps customers achieve their goals, and customers reflect their achievements back to the brand.
Use a loyalty program to help users achieve their goals. Need to find a way to make the product and brand the “key player” in accomplishing their goals. When your product helps customers achieve their goals, they'll want to come back and buy more.
2.6. Community program
When talking about the Loyalty Program, it is impossible not to mention Sephora.
Sephora has built a comprehensive loyalty program that offers users a variety of benefits. In addition to the points and ranking system, its program also allows members to join a community of people with similar interests. In this community, members can connect with each other, connect with brands, find inspiration, sign up for special events, and etc.
In this way, the company can extract a large amount of insight from customers. From there, it can be applied to product development as well as campaigns to increase conversion rates.
It is necessary to build a platform for members to interact, share views, feedback for the brand, and more. This type of program works for all types of brands, as long as you have a plan in place to stimulate conversions.
This is a new type of program that has emerged but has also proven its effectiveness. Those are the Term Subscriptions. It is unlike other programs, which often focus on gifts and benefits for members. Instead, this program will let customers buy your products under subscriptions.
Take the example with the Bean Box brand below.
By selling products as long-term service packages, Bean Box has increased the lifetime value of its customers. At the same time, they encourage customers to choose a 6-month service plan instead of 1 month with the greeting "save 20%".
Although the average product price when buying a 6-month package will be cheaper, the return value will be much greater than that of customers who come to buy only once.
Try selling your products in service packs if appropriate. Consumers are always looking for convenience, and they will love products that can get to their hands easily and quickly. In addition, by offering promotions/discounts when buying a long-term plan, you can motivate customers to sign up for this service package instead of buying a one-time product.
Offering promotions is one of the most effective strategies to build potential customers and keep the brand's position in the hearts of customers. Try to understand, understand the consumption trends of customers and provide them with attractive values.
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