As competition grows, more ecommerce merchants are engaging in a “race to the bottom,” using aggressive discounts in an attempt to outsell their competitors. For premium brands, however, this isn’t an issue.  By definition, premium products don’t compete on the basis of price, but rather on the basis of quality. Companies are able to differentiate themselves from their budget-conscious competitors by offering high quality products.

The only concern with offering high quality products is that they come at a higher cost. The hurdle for premium brands is convincing customers that their products are worth the extra investment. Luckily, reward programs are the perfect solution for this challenge.

Are rewards effective for premium products?

Before we dive into how to build a premium rewards program, I want to dispel a couple common myths surrounding the effectiveness of rewards on premium products.

Myth #1

Premium product customers aren’t motivated by rewards.

Reality: Premium shoppers are just as motivated by rewards -- they simply prefer experiential rewards that give them unique experiences.

Myth #2

Most premium customers aren’t price sensitive.

Reality: Your customers are willing to pay more, but only if they receive more. They’re fans of premium products because they offer better quality, or improved service -- something to justify the higher sticker price.

Myth #3

Premium products aren’t purchased frequently enough to warrant a rewards program.

Reality: Reward programs are not a short term strategy but rather are built to help you retain customers over the long term. Many premium products also have peripheral items that can be purchased alongside the main item. Implementing a rewards program can incentivize customers to buy more additional items while also convincing them to make more purchases later on.

Building your premium rewards program

With these myths out of the way, it’s time to determine what the key elements of a rewards program for premium products are.

1. Create a valuable loyalty currency

Premium brands are known to rarely (if ever) offer sales on their products. They’re confident that the quality and prestige of owning their products is enough to convince customers of their value. By offering discounts on your premium products, you play a dangerous game which can easily lead to a discounting death-spiral.

A points rewards program allows you to provide value to your customers without discounting. Points act as a store of value that isn’t immediately associated with discounting. Instead, points are seen as an additive bonus to your already premium product. That means customers experience an increased sense of value every time they make a purchase, saving you from having to compromise your premium pricing strategy.

Build Rewards Premium Product GemPens

What you choose to name your currency plays a huge role in how valuable it feels to your members. You want to create a currency that is exciting to earn and memorable to your customer, so avoid rewarding customers with just “points” -- come up with a creative name!

PenGems, a premium stationery brand, takes on this challenge by rewarding their best customers with “Gems” for completing valuable actions at their store. This is an incredible name for their currency because gems are easily associated with luxury, royalty, and wealth. It’s also a clever rhyme that’s easy to remember and gives their rewards program a personalized, premium feel!

2. Provide value to customers through experiential rewards

If you want your program to appeal to premium customers, you need to ensure your rewards are premium as well. Your customers want to feel their business is truly valued, and the rewards you offer is the best way to do that.

Experiential rewards are the perfect way to make your customers feel special and valued. Rather than focusing on basic transactional discounts, experiential rewards allow you to focus on how you can enhance your brand experience. These experiences help differentiate you from your competitors and leave a lasting positive impression that a discount coupon just can’t accomplish.


Focus on 
 enhancing a customer’s brand experience, not discounting their order.

One of the best experiential rewards you can offer your top customers is the chance to meet your CEO. This could be as simple as a quick Skype call or as elaborate as an in-person dinner -- the point is that personally connecting with your best customers is an amazing way to strengthen their connection to your brand. This will make them feel like a special member of your brand community, and these emotional connections will further strengthen the loyalty of your best customers.

3. Design a luxurious reward experience

When creating a rewards program for your premium products, you don’t want it to detract from your brand image. You’ve spent a great time of time cultivating an image of quality and prestige, so it’s imperative that your rewards program offers the same premium feel! You can protect your brand reputation by making your program an immersive element of your brand experience, designing it to fit with the rest of your website.

A great way to do this is by customizing your program launcher and customer panel. Creating custom icons, using on-brand colors, and creative tier names are all amazing ways to convey the concept of being a premium brand. Your customers care a lot about the appearance of your products, and building a beautiful rewards program plays into that same expectation. Give them an experience that is impressive!

Build Rewards Premium Products House of Flynn Panel

A great example of this is The House of Flynn, whose line of premium backpacks, wallets, and bags are supported by a beautifully branded rewards program. I especially like the custom mermaid-kitten icons for their rewards tiers. With these elements, their rewards program gives a similar vibe to the rest of their website: friendly, fun, and high quality.

4. Offer social sharing benefits

One of the greatest benefits of selling premium products is that your customers are proud to share their association with your brand! There’s a reason you see people sharing their Starbucks coffee on Instagram but not their Dunkin’ Donuts. Your customers want to show off that they’ve made a purchase from you, so it makes sense for you to encourage this behavior!

By rewarding actions such as sharing on Instagram, Twitter, or Facebook, you can take advantage of your customers’ social networks. Your customers are already willing to publicly vouch for your brand, and by rewarding sharing actions you increase the likelihood that they will become brand advocates who regularly share your products with their friends.

Build Rewards Premium Product Buda Juice Referrals

You can ramp this up by combining a referral program with your points strategy. These two programs create a powerful community building loop that not only engage and reward your existing customers but also attract new, valuable customers to your brand.

Buda Juice is an excellent example of this at work. Their line of premium organic juices are the kind of product that customers want their friends to know they use. With their referral reward program, customers who share their love of juice with friends using Facebook, Twitter, or email will receive 500 points (equivalent to $5) every time a friend signs up! This incentive, combined with the points they earn for following Buda Juice on social media, make the program a fantastic excuse to brag about their latest purchase and deepen their connection to the brand as a result.

5. Create exclusivity with VIP tiers

Your customers are motivated to shop on your website because of the high status and high quality associated with your brand. You can take this need for elevated status one step further by building VIP tiers into your rewards program!

VIP tiers take advantage of gamification, which turns your customers love and commitment for your brand into a game. By offering unique and valuable rewards to your best customers, you build a desire to reach the top tier to take advantage of those benefits. This inspires increased engagement from all of your customers, bringing them back to shop at your store more often.

Build Rewards Premium Product Country Club Prep

A premium brand with an awesome VIP structure is Country Club Prep. Every time you enter a new tier they give you an exclusive gift. These gifts serve as a powerful incentive for customers to increase their orders to reach more prestigious tiers, especially since they’re kept secret! The key to these items is their exclusivity -- these items are only available to the most committed customers, encouraging less engaged customers to pick up the pace.

Premium brands can benefit from rewards programs

With the competition for business higher than ever, you need to make sure your premium brand is an attractive option for consumers. You might not be the cheapest option, but by offering an awesome product and creating a valuable rewards experience you can ensure that customers realize the true value of your brand!