In the first few months of 2019 alone, Nike, Starbucks, Reebok, The Vitamin Shoppe and Tim Hortons all made headlines around new or revamped loyalty programs. Zoom out to the last year, and the list expands to include Macy's, Nordstrom, Kohl's, DSW, Lululemon and more.
Across industries, brands are launching first-ever loyalty programs and revamps of old ones. The one thing that’s consistent? A steady need to keep customers coming back.
So, why the increased focus?
Aside from the obvious reasons -- like an older program simply needing a revamp -- why are top brands focusing on loyalty right now? Here are a few explanations, thanks again to recent news coverage:
1. The empowered consumer.
RetailDive wrote a great article on the rise of loyalty program revamps in retail, in which one of its editors, Cara Salpini, described the state of the market right now: “In a retail landscape where customers are overwhelmed by choices -- where to shop, how to shop, which brands to shop -- loyalty is more important than ever.”
She’s right. And her statement can extend to other industries. It's no secret that customer expectations as a whole continue to rise.
2. The increase in competition.
Salpini also pointed to widening competition as a reason for so many recent loyalty revamps.
Yes, there's lots of competition in retail right now. But again, Salpini’s suggestion can extend to other industries.
Tim Hortons and Starbucks are among those with new programs, so let’s look at the coffee industry as one example. Dunkin’ Brands, McDonald’s and Burger King have all been investing in their coffee offerings, and that’s not to name all of the smaller coffee shops that continue to build their own audiences. Competition is thick.
Same goes for QSRs. At the end of 2018, a study by Publishers Clearing House said: “The competition between quick serve restaurant (QSR) brands to keep their base intact and to attract new customers is fierce and only increasing.” As for loyalty? The study also revealed that “...customer loyalty often extends only as far as the next incentive or reward.”
Then there’ s retail, where the rise of social media and digital channels has empowered smaller shops to start competing with bigger brands who couldn’t be touched before.
The right loyalty program idea might just be the thing that makes a brand stick out within any of these industries -- or at least, that's how many of the brands releasing new loyalty programs are looking at it.
3. The chance for greater customer acquisition in new markets.
Although loyalty talk often revolves around how to keep customers coming back, a strong program can also help with acquisition.
According to Skift Table, this is one of the reasons Tim Hortons, which "may serve upwards of seven out of every ten cups of coffee sold in Canada," just launched its new loyalty program: to build up its American consumer base.
At a time when customer acquisition is at the forefront of many marketers’ minds, pairing loyalty program goals with terms like “new market” just makes sense.
In addition to empowered consumers, increased competition and improved acquisition, there's something else that's helping to keep this loyalty trend alive: The pressure that comes from seeing so many other brands launch new programs. Between all of these reasons, it’s not hard to see why loyalty is a centerpiece of many conversations at the moment.
20 loyalty program ideas
Whether you can relate to the three reasons just listed, or it’s simply time to revisit your existing (or non-existing) loyalty program, we’ve got you covered. We scoured as many articles and press releases as we could find that announced loyalty revamps. Then we looked at specifically what they’re doing to their programs. We found 20+ answers. Hopefully they can help to inspire, or validate, ideas for your own loyalty program.
1. Increasing personalization
Personalization is a hot topic for marketers right now. And it’s getting some attention in relation to loyalty programs.
Nike, for example, is making large investments in its technology to offer consumers personalized service. So is Nordstrom with its new loyalty program. In fact, as Digiday reports: “The centerpiece of the new program is the “Nordy Portrait,” a unique user profile each customer can create through the loyalty mobile app. There, customers can customize their style profiles, and see their accumulated points, how much they need to spend to reach the next level and more.”
With the way that personalization is being talked about right now, this one will likely become less of a perk and more of an expectation of loyalty programs over time.
2. Letting points accumulate across banners / family brands
Foot Locker Inc.’s new loyalty program is creating a more connected experience across Foot Locker, Kids Foot Locker, Lady Foot Locker, Footaction, Champs and Eastbay.
Ascena Retail Group launched a new loyalty program in early April that enables members to earn and redeem perks across: AnnTaylor, LOFT, Lou & Grey, Ann Taylor Factory and LOFT Outlet.
Traditionally, each of these brands would have its own loyalty program. Combining them will give shoppers more choices and should encourage cross-promotion.
3. Getting experiential with benefits
Experiential is right up there with personalization in terms of hot topics right now. And lots of top brands are bringing it into their loyalty programs.
Here are some examples:
- Participants in the Foot Locker program will get experiential benefits, including chances to enter sweepstakes and early access to events.
- The Vitamin Shoppe’s new program gives access to in-store wellness coaches and consultations with certified nutritionists.
- Barneys New York will roll out a program that includes private designer events, complimentary beauty treatments and other special experiences.
- Nordstrom will offer personalized experiences like having their in-home stylists make a house call.
Whether inside or outside of a loyalty program, building a memorable experience for your customers has the power to cultivate some serious brand advocacy.
4. Making programs more generous
Many of the brands who are changing up their loyalty programs are doing so by adding more points.
Starbucks is one of them. It’s offering a greater range of options that are meant to appeal to a wider spectrum of customers.
Wayback Burger also increased its rewards, with a program that gives double the dollar amount back (from $5-10) once shoppers reach 100 points.
Nordstrom, too, is being more generous with points.
5. Creating more convenience
How can you make your loyalty program one that connects your brand with convenience? This is a question that many brands are asking right now -- especially when retailers like Amazon are raising the bar in this category.
It could be as small (yet significant!) as allowing customers to save favorites on your app, so they can make online orders faster. This is what Panera does as part of their loyalty program, which is known for its success.
6. Improving shipping options
By 2020, 40 percent of consumers expect to access Amazon Prime-style memberships. Only 25 percent of retailers plan to introduce these services in the same period. This data came from a survey taken in June of 2017 that measured expectations over the following 36 months. At that point, there was one main takeaway: Consumers and buyers had differed shipping expectations.
Maybe those expectations are starting to align, because some top brands are announcing new loyalty programs with better shipping options.
According to CNBC, “...as Starbucks prepares to launch delivery to a quarter of its stores by the spring with UberEats, it’s working to add delivery orders as another capability of the Rewards app.”
Famous Footwear is offering free shipping for online orders to all of its loyalty members.
And Barneys New York is offering expedited shipping, too.
7. Eliminating expiration dates for points
Some brands are being more forgiving with expiration dates, making their loyalty programs more flexible.
Starbucks used to have rules where points at a certain level expired six months after they were earned; starting in mid-April, the rule will be changed so that these points no longer expire.
The Vitamin Shoppe also has a new program where points don’t expire.
8. Opening up redemption options
Another way brands are adding more flexibility to their programs is by opening up options when it comes time to redeem points.
Chipotle told QSR Magazine how this sets their program apart: “Offering a free entrée of choice allows customers to choose their favorite menu item without restrictions like other loyalty programs.”
9. Getting creative in giving stuff away
Many loyalty programs give away free stuff. Some are getting creative with it.
One of Nike’s stores is testing vending machines that reward loyal customers with free gifts every two weeks.
10. Making loyalty members feel like VIPs
Who doesn’t love to feel like a VIP?
Nike offers early access to new products, free shipping and VIP treatment in stores (including a separate entrance to the Manhattan store!), according to Multichannel Merchant.
Amazon Prime makes people feel like their status is elevated, according to RetailDive.
11. Simplifying programs
Just because the market is more complicated today doesn’t mean your loyalty program has to be. Keep it simple for your consumers, like Tim Hortons is doing with theirs.
Through the Tim Hortons program, diners will be able to redeem a reward for a free coffee, hot tea or select baked goods once every seven visits.
12. Connecting loyalty members to one another through social media
On top of rewarding your most loyal customers, why not bring them together?
13. Encouraging social sharing.
The social ideas don't end with creating connections. Top brands are encouraging social sharing that reaches beyond loyalty members, too.
A recent Forbes piece offers one great example: “...Domino's ‘Piece of the Pie Rewards’ promotion makes it easy for members to use the Domino’s app to take a picture of any pizza (it doesn’t have to be Domino’s) and earn points. Using the hashtag #PointsForPies, customers are sharing their photos and pizza experiences with friends.”
14. Adding tiers
Tiers are very popular today, with brands like Chick-Fil-A, Barneys New York and Sephora using them. Barneys New York bases their program on annual spend; more spend means greater tiers with more benefits. And Sephora is taking a similar approach, with higher-tier members getting additional perks.
15. Considering non-mobile access
Even in the digital age, not everyone is comfortable with apps and mobile. That’s why, even with Tim Hortons’ new program, they’re still offering traditional rewards cards.
As Sally Burnett, a loyalty consultant, wrote in Forbes: “Most consumers have smartphones, but there should also be alternatives for customers who do not or who are more comfortable with email or text than apps.”
16. Tying in purpose
Some brands are integrating purpose into their loyalty programs, letting members give back.
Target's loyalty program offers shoppers the chance to choose which local nonprofits Target should donate toward.
Famous Footwear is also tying purpose into its program. It’s awarding members with double points for all purchases that include a donation to its long-time partner, March of Dimes, during an upcoming fundraising campaign.
17. Rewarding online or in-app purchases
You can also use your loyalty rewards to motivate key actions you’d like customers to take. Famous Footwear is using theirs to incentivize cross-channel purchases. Members get bonus points when they purchase online or engage in the app.
18. Providing instant gratification
Instant gratification can be a powerful thing. Chipotle recognizes this and lets customers in pilot markets earn free chips and guacamole after their first purchase using Chipotle Rewards.
19. Starting with what you want to reward
Maybe none of these resonate. That’s a bummer, but it’s okay: Just focus on what you want to reward. Start from there.
For some inspiration, take a look at what Reebok’s global head of digital Matt Blonder said in a statement about their new program, Unlocked: “With Unlocked, we wanted something truly unique. We’ll be rewarding customers for their loyalty and consistent brand interaction, with experiences that we know resonate with them and speak to their passions.”
20. Staying close to customer feedback
Chick-Fil-A revamped its program based on customer feedback, according to Forbes. And Famous Footwear just updated theirs based on insights from “extensive customer research,” according to a press release they put out that announced the new program.
If you’re letting your customers help build the program that’s meant to reward them, it’ll be hard to go wrong.
As you consider next steps, don’t let this list overwhelm you. We recommend picking a few ideas that really resonate and seeing what you can build from there. And if things don’t work out with the build, you’ll have 20 something other ideas to return to and explore.