3 Keys To Optimizing Your Premium Loyalty Program

0aaaTom Caporaso ClarusCommerce2019

It’s tougher for retailers to earn customer loyalty than ever before. With virtually limitless choices right at their fingertips, customers aren’t afraid to jump between brand loyalty programs in order to get the best price or discount. In fact, nearly 80% of U.S. consumers report switching their loyalty more often than they have in the past.

Set yourself apart from the competition by adding premium loyalty. Unlike their traditional counterparts, premium loyalty programs allow customers to pay a monthly or annual membership fee in exchange for valuable rewards they can use right away. Considering how easy it is for customers to shift their loyalty, it’s crucial that your premium loyalty program offers a combination of 24/7 exclusive benefits and personalized experiences customers can’t find anywhere else.

What Does Premium Loyalty Look Like?

Created in 2005, Amazon Prime recently surpassed 100 million U.S. subscribers despite a steadily rising annual membership fee. Among the most prominent reasons for this surge in membership is the value Amazon brings to the table. Instead of waiting weeks or months to earn meaningful rewards, members can enjoy free two-day shipping and Prime exclusive items every time they shop.


Eager to experience the same increase in customer engagement and brand advocacy, retailers like Restoration Hardware are also getting in on premium loyalty. The American home furnishings company launched its own premium loyalty program in 2016 and quickly experienced an uptick in business. Within a year after the program was founded, membership grew to more than 375,000 members while driving 95% of the organization’s business. Better yet, Restoration Hardware continues to surpass earnings estimates.

But achieving similar results takes more than simply announcing the launch of a premium loyalty program for your brand. From striking a balance between transactional and experiential benefits to teaching employees the ins and outs of the program, there are several variables you’ll need to consider to ensure the success of your premium loyalty program.

Identify The Right Mix Of Benefits

Much is being made of the customer experience. While it’s clear customers place plenty of importance on memorable experiences, both transactional and experiential benefits have a place in a premium loyalty program. Transactional benefits — such as a discount with every purchase or free shipping — are often the first touch point of a loyalty program and can get customers excited about earning even more benefits later on. Make transactional benefits a point of emphasis in your premium loyalty program to not only keep customers coming back for more, but also leave them feeling like they got a great deal.

Once you’ve piqued the interest of premium loyalty program members, take the customer relationship to the next level with experiential rewards they can’t find anywhere else. REI is a prime example of how you can continue to differentiate your brand from the competition and ultimately build stronger connections with your customers. The sporting goods company caters to the unique preferences of its most loyal customers with a premium loyalty program that includes exclusive gatherings and new-member hikes.

Similarly, your premium loyalty program needs to help members feel both smart and special. Combining transactional benefits that help customers save money with unique, tailored experiences can help develop emotional connections with customers and boost engagement to cultivate true brand advocates moving forward.

Make It Personal

When it comes to loyalty, a one-size-fits-all approach isn’t going to cut it. Set the stage for more relevant, personalized offerings by analyzing purchasing data. The more information you can consider when evaluating the success of specific benefits, the easier it will be to make improvements and create an engaging, valuable loyalty program.

If customers aren’t engaging with a few experiential rewards, try to get a sense of what might be more beneficial. By reaching out to your strongest brand advocates through surveys or focus groups, you can capture important insights about experiential benefits you haven’t yet considered. Customers who feel like their needs and interests are recognized may also develop even greater loyalty to your brand. Rather than working with the first competitor that offers a lower price, customers may be more inclined to stick around for the long haul.

Empower In-Store Employees

You can pave the way for greater enrollment in your premium loyalty program by equipping in-store employees with the knowledge they need to tout potential benefits. Front line employees have a unique opportunity to promote premium loyalty based on the frequency of their interactions with customers. Training programs can equip these employees with the tools and information they need to welcome new members and proactively describe program benefits to prospects.

As customer awareness of potential benefits increases, so will program membership. Consider running employees through scenarios in which they’re required to mention program rewards at checkout. By scheduling periodic training sessions and identifying areas for improvement, you can help ensure employees are doing their best to drive program participation.

Traditional Loyalty Is No Longer Enough

A growing number of customers are willing to pay for better, more immediate benefits. Adapt to the new age of loyalty with a premium program that offers the speed, exclusivity and personalization your best consumers expect. For most organizations, the key to premium loyalty success involves putting your best customers at the center by offering the right mix of valuable benefits and improving the effectiveness of your program through continued optimization.


Tom Caporaso is the CEO of Clarus Commerce, a leader in retail customer loyalty solutions. He has over 20 years of experience in the loyalty and subscription space.

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