Editor’s Note: This post was originally published in November 2014 and was updated for accuracy and comprehensiveness on October 13, 2017.
A loyalty program presents an amazing opportunity for your business to create repeat customers and increase customer lifetime value. Nonetheless, is a loyalty program enough to stick out from the crowd? The reality is that people don’t simply buy the product — they buy the brand.
In a world where numerous businesses sell similar or identical products, brand distinction is crucial to succeed. You need a loyalty program that stands out and breaks through the noise.
When starting a loyalty program, many businesses make the mistake of the “build it and they will come” mindset. While loyalty programs are effective marketing and customer retention tools, they must be designed around a clear purpose in order to be successful. Right from the start, take on the snowflake mindset — focus on building a loyalty program that stands out from the crowd. The snowflake mindset will allow you to accomplish loyalty goals and stay on track for growth.
Goals of a Loyalty Program
1. Create Desire
Your customers should feel good about participating in your loyalty program. Make earning points and reaching the next VIP tier an exciting experience for customers. When customers seek out the action rather than the reward, you have created an effective loyalty program.
2. Spark Conversation
A simple loyalty program isn’t something to brag about to your friends — but a loyalty program that offers access to A-List Hollywood events is a whole other story. Word-of-mouth marketing delivers tremendous growth to loyalty programs.
3. Align Branding
Your loyalty program should become an extension of your brand, not just an extension of your website. For example, a luxury retailer would have an exclusive loyalty program, while a toy company should make it fun and light hearted. Align your loyalty program’s theme with your brand objectives for increased effectiveness.
How to Make a Creative Loyalty Program
Now that we have explained the importance of creative loyalty programs, let’s look at some of the best tactics out there. No one knows your brand and site like you do, so make sure you incorporate your brand’s attitude and feel into these creative loyalty program techniques.
1. Be Creative With Your Points
Reward points programs are among the most effective loyalty programs out there. There are two creative ways to incorporate points into your program. The first is the currency name, and the second is the visual representation of the points.
I have seen many creative point names, but one of my favorites is from Frostbeard Studio, a book-themed candle manufacturer. Instead of points in their loyalty program, Frostbeard rewards customers with Pages. This is a great example because it’s aligned with their playful branding and ties back to their product offering.
The second way to use points to make creative loyalty programs is to have a visual component. Create a look for your currency so that it becomes more than just a number. When a customer can see what the points look like, the points become much more interactive.
Once again, it is important to keep the look of your points consistent with your brand and site theme. A great example of a currency look that fits with the brand is Bathorium. The site sells natural and organic beauty products, and rewards their customers with “Bath Bucks,” another creative points name. The bath tub image is fitting for both their merchandise and points design, creating a clear link between their products and rewards.
2. Be Creative With the Ways Customers Earn
Notable loyalty programs reward customers when they least expect it. While rewarding a customer after a purchase is effective at creating positive reinforcement, it doesn’t create a memorable customer experience.
Rewarding points on a customer’s birthday is an easy way to enhance the customer experience. Set up your program to celebrate customer birthdays by automatically sending them bonus points along with a birthday email. This is an effective technique because it surpasses customer expectations, and creates a personalized experience.
Even better than birthday rewards are surprise rewards! Try sending your customers an email that delivers some words of encouragement: simple message such as “we think you’re awesome” followed by the bonus points is a great way to get your customers talking.
Finally, find ways to reward points that are related to your brand and are tailored to your target market. If you are a company that sells board games, create a monthly challenge where customers play chess or checkers to win points. Challenges create incentives for customers to engage with your brand, and thus increases program engagement.
3. Be Creative With the Ways Customers Are Rewarded
While discounts are the standard customer reward in loyalty programs, your program needs more to stick out from the crowd. In fact, 44% of loyalty program members believe the rewards they are offered are irrelevant to their interests.
A fantastic example of taking rewards to the next level comes from Sephora’s Beauty Insider program. This world-class rewards program has it all: mobile experiences, VIP tiers, and exclusive rewards. Customers who manage to reach VIB Rouge, the top tier of Sephora’s program, are given exclusive access to new products. This creates a memorable customer experience and gives customers greater incentive to become members and spend at Sephora.
Experiential rewards are another great way to engage customers and strengthen loyalty, because they go beyond transactional rewards to create a one-of-a-kind experience. Sony Rewards does an excellent job delivering out-of-this-world experiential rewards. Through the ShowStoppers portion of the program, members are invited to bid points on access to incredible events, such as movie premieres, concert tickets, and vacations.
Since this method is out of the ordinary and stands out it can easily get your customers talking to others about your program.
4. Support a Charity With Points
According to Cone Communications, 83% of Americans want more products and retailers to support causes. This is a trend you can capitalize on to create a creative loyalty program by allowing customers to donate points to a charitable cause.
For example, the Canadian Red Cross allows members to donate using AIR MILES and Aeroplan miles. Similarly, Shoppers Drug Mart, allows Optimum members customers to donate rewards to a long list of local and international charities.
You can do something similar on your site by allowing members to donate your sites points to a cause that is related to your products and services. Supporting a charity with points is a creative and socially responsible way to make your program different.
5. Give Your Customers a Status
This is one of my favorite ways to differentiate a program. With this tactic, you show your customers exactly where they stand within your loyalty program. Give them something to strive towards and create an exclusive club of only your best loyalty program members. People love to share when they belong to something that is seen as rare or important.
The best way to start is by introducing some type of VIP program. Many hotel chains – like Marriott – do this extremely well. You can set a point threshold that a customer must reach in order to be included in the VIP program. This could be dollars spent, number of orders, or number of customer referrals.
One of the simplest but most effective VIP programs out there comes from Starbucks. Despite offering only two tiers (Green and Gold), Starbucks Rewards creates an exclusive experience that’s worth talking about. Although the Gold tier is easy to reach for everyday coffee drinkers, Starbucks still elevates the experience with the personalized Gold Card and access to free beverages. The Gold Card is effective because it’s personalized, tangible and symbolizes the customer’s commitment to the brand. Now that is something worth talking about!
6. Customer of the Month
Similar to customer status, a customer of the month gets people striving towards a goal. At the end of every month you can showcase the customer who earned the most points that month. Obviously this idea works better for some industries than others, but can be very effective for any brands with higher purchase frequency and average order value.
Recognition for status is something people crave. If a customer has the opportunity to showcase themselves to a business’ audience, it will add value to the customer’s experience and inspire them to seek that opportunity. For example, a fashion retailer could advertise that the customer of the month will be showcased in their newsletter or blog. The customer will be given the chance to to show off their personal style and talk about their favourite products in exchange for a reward.
These perks encourage customers to share your program in their networks and encourages other similar customers (also known as your best ones) to strive for customer of the month.
Be Creative - Not Generic
I hope the above examples and recommendations have provided you with the inspiration you needed to build a truly creative loyalty program.
Remember, you need to think of ideas that work for your brand, product, and industry to have the most creative program possible.