While loyalty programs have often been a go-to plan for
retailers seeking to retain consumers and influence repeat purchases, the
programs have become less impactful over time. Despite memberships continuing
to rise, less than half (45%) of brand consumers remained loyal to their
favorite brand after a yearlong stretch, according to data from Catalina.
The RTP team discusses
which retail loyalty programs have stood out to them, and highlights the steps
retailers need to take to incentivize consumers to actively participate in
loyalty program
Debbie Hauss,
Editor-in-Chief: Travel and hospitality companies have done a good job
drawing in and keeping loyal members. The compelling concept “If I buy 10
I’ll get one free” keeps people coming back to sites like Hotels.com. It’s
also comforting to know that all necessary personal information is included and
secure on sites like Expedia. And OpenTable has done an effective job of
keeping people coming back to build up points (which I’ve never used but I
continue to go back to OpenTable anyway). I do think that these companies could
do a better job of re-targeting and personalization to further cement the
long-term relationship.
Adam Blair, Executive
Editor: Sometimes the best lesson is learned by seeing what NOT to do. I
recently changed health insurance providers and, while this isn’t strictly
speaking a loyalty program, it shares similar goals of keeping me engaged with,
and in a positive frame of mind about, the company. After a recent interaction
with the provider I received a hand-written, snail-mailed note from a service
representative saying that “It was a pleasure speaking with you.”
Normally this would have warmed even my cynical journalist’s heart, except for one
little thing. In that same day’s mail was another hand-written note. It was,
word for word, the same as the first, and was “signed” by the same
person. However, each note was written in its own distinctly different
handwriting style, clearly written by two different people writing the same
message and signing the same name. My provider’s attempt at
“personal” care was revealed to be little more than a gimmick. I’m
not switching providers, but I will certainly be wary about the sincerity of
such communications in the future. The moral? Even the best idea can be ruined
by sloppy execution.
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Alicia Fiorletta,
Content Strategist: Sephora does a stellar job of balancing rewards,
coupons and really incredible experiences with its Beauty Insider Program.
There are three different tiers that members can fall into based on how much
money they spend each year. The more consumers spend, the higher their tier and
the more exclusive rewards and opportunities they receive. That in and of
itself is great incentive to get people to spend! But it gets better: Sephora
also offers free 15-minute makeovers and makeup classes to Beauty Insider members.
So not only is Sephora giving shoppers access to coveted products, samples and
coupons, but its stellar sales associates are also teach shoppers how to use
products successfully. Talk about keeping your customers engaged!
David DeZuzio, Managing
Editor: I will remain loyal to any program that offers a high percentage
off with limited exclusions. I don’t need overly personalized service or a
“like” or a new follower or a pat on the back for buying stuff.
I need money off. My wife has a Kohl’s credit card and receives plenty of
offers. But, when she gets the extra 30% off, you can bet that she will be
going to the store and/or online at some point during the week. Since it’s also
valid for clearance items, it’s even better; feels like you’re really getting
some good deals. Of course, we also have Amazon Prime and it’s always our go-to
place for last minute shopping thanks to the free shipping. So, it’s safe to
say if you give us 30% off of almost every item and free shipping, you’ve got
yourself a loyal bunch of customers.
Klaudia Tirico,
Associate Editor: My idea of a great loyalty program is one that provides a
good amount of incentives, but doesn’t require the customer to pay for it at
sign-up. Amazon is an exception, since it provides free shipping and music,
movie and TV streaming to its Prime customers for just $100 a year. But having
to pay for a loyalty program at a retailer where you’re already spending money
is a bit excessive. Beauty retailers do loyalty the best, in my opinion. Alicia
nailed it when describing Sephora’s Beauty Insider Program. To add to it, they
offer a very exclusive gift for the member’s birthday from brands like Marc
Jacobs Beauty and Nars — two very high-end makeup brands. Ulta’s loyalty
program is great, too. With every purchase, the member earns points towards up
to $125 off. Ulta also offers birthday gifts and coupons, as well as access to
trends, tips and special event invites. The truth is, people like free stuff,
especially if they’re spending money at your store.
