Exclusive Bonus: our brand new research report on our top 32 e-commerce niches. Complete with our proprietary profitability analysis. Grab a FREE copy today. The first sale to a customer matters, but if you really want to make your a success, you need to focus on the 2nd, 3rd, 4th.you get the idea.
As the infographic shows, it is 6-7 times more expensive to acquire a new customer than it is to keep one. Your bottom line won’t love you for chasing new customers. Customer loyalty programs work, but most businesses get it wrong.
In our Beginner’s Guide you’ll learn:. What a customer loyalty program is and how it can impact your brand’s bottom line. The different types of customer loyalty programs. How to design a rewards program that attracts the right type of buyers. The best way to launch, promote and measure your loyalty program Click on the below for full size image, tweetable stats and sources.
Hopefully, you’ve taken great pains to make sure your is excellent. There’s more to keeping a customer than making them happy during their first sale, though.
You need to entice customers to return. That’s where customer loyalty programs come into the picture.
They’re easy to set up and enrolling customers isn’t that hard. What is a Customer Loyalty Program? A customer loyalty program is a relationship between a brand and customer. The company offers exclusive products, promotions, or pricing; in return the customer agrees to “go steady” with the business through repeat purchases or brand engagement. Before you get started, make sure your goals are clear and you’re doing it for the right reasons.
If you design a customer loyalty program around discounts, you’ll attract cheapskates and your program will more than likely fail. In fact, 77% of these transaction-based programs fail in the first 2 years. The goal should be to attract the right customers, and create profitable long-term relationships with them. But if you focus too much on the money and have no intent of understanding your customer and meeting their needs, you’ll fail.
Ready to get started designing a killer customer loyalty program? Ok, let’s dive in! Chapter 1 Points Programs Loyalty point programs let customers accumulate points that they can redeem for rewards or free products/services. They’re so easy to set up that 73% of loyalty programs are points based, making this the most popular type of loyalty program by far. A lot of ecommerce businesses struggle to get customers in the virtual door. If that’s a problem that’s keeping you up late at night, referral marketing can help. And you can take that to the max with points-based loyalty programs.
Not all points are tied to money transactions – some may be earned from social sharing, emails, or other actions customers take to drive traffic to your site. In fact, your loyalty program shouldn’t be purely transaction-based. Get your best customers to send you more business and reward them for helping you. 9WLOVES (Nine West) Nine West makes their point system clear.
$1 = 1 point. It doesn’t get any simpler than that. We love that they give surprises to customers on their birthdays. Who says only kids can get free stuff on their birthday? IHG Rewards Club IHG keeps their rewards site user-friendly and provides plenty of ways for members to earn and redeem points. Travel and hospitality companies have some of the best loyalty programs around. Study them to improve yours.
ToyZoo Rewards Talk about a user-friendly explainer page – ToyZoo has a well-designed, easy to understand rewards program. It’s success is no surprise. Bottom Line On Points Programs Points programs are the most popular loyalty programs. They’re easy to use and can encourage specific consumer behaviors. Pros.
Tangible value for the consumer. Flexible and customizable. Can drive desired consumer behavior. Easy to understand. Lots of loyalty program apps and software to choose from. Avoids price discounting Cons.
Point program operation can be confusing. Need to be clearly explained. Might require a catalog or separate redemption site. No “instant gratification” (gamification can fix this) Thanks to the ease of use and customizability of points programs, they’re perfect for most ecommerce business, regardless of size or target market. Chapter 2 Spend Programs In spend programs, customers get loyalty credit for the amount they spend at your business.
You can use similar discounts without an upfront email capture to keep customers coming back, but you’d lose out on a lot of valuable information (and a captive audience!). This kind of program is very easy to understand, create, and maintain. They’re an effective way to cut your churn rate and increase transaction amounts. Kohl’s Yes2You Rewards Kohl’s dominates cash-back rewards for brick and mortar, and they’ve carried the same strategy over to ecommerce beautifully with Yes2You Rewards with a simple to understand, mobile-friendly system that offers clear benefits. Shop.com Cashback Shop.com’s Cashback program is introduced beautifully with an opt-in popup that illustrates the programs benefit to the user and maximizes conversions. Fawn & Forest Rewards Although the page layout could be better, fawn&forest beautifully explains how their program works.
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Design can make a major difference, however. Don’t waste space like this on your explainer page. Make sure you’re optimized for mobile AND computer use. The Skinny On Spend Programs Spend programs are a great option for encouraging increased transaction values and reducing high churn rate.
The simplicity makes it easier to get customers to sign up. Pros. Tangible value. Intuitive rewards system. Encourage repeat business. Increase transaction amounts.
Easy to set up. Easy to maintain Cons. May not let you gather as much data as other types of loyalty programs. Can decrease perceived value of products/services.
Higher cost to your business Spend programs are a great option for retailers in fast fashion or other, similar industries that rely on high numbers of transactions and retail products with high markup. Chapter 3 Tiered Programs An improved version of points programs, tiered loyalty programs give customers rewards based on different levels of spending or points. They are growing quickly in popularity because they can be highly targeted and customized easily, and customer segments can be target pre and post-payment In some tiered programs, customers are offered gifts, free products/services, privileges, or exclusive products. GILT Insider To introduce their Insider program, the GILT Group posted a press release. Smart move, and a great way to let existing customers know about the program, especially if you link to it on your homepage. Sephora Sephora clearly illustrates the benefits of each tier in a fun and easy to understand way. Scroll down the page for each tier, and you’re presented with beautifully illustrated reasons to signup – the most attractive level is, obviously, the VIB Rouge.
Best Buy Best Buy provides an easy to understand chart for potential rewards members, complete with details on how to qualify for each level. Bulletproof Coffee Bulletproof coffee makes their program tiers easy to understand, although the point quantities might be a big daunting for some customers. Tier Program Takeaways Need to cut your churn rate, save on your loyalty program expenses, and target specific segments or actions? Spend loyalty programs might be the right solution – especially if you’re in the luxury market.
Pros. Decreases churn rate for most valuable customers. You don’t invest in low-end customers (saves you cash!). Uses gamification to motivate customers to higher levels Cons.
Unlikely to draw new site visitors into joining on the first visit. Not universally appealing (great for targeted campaigns, but not as a general, stand-alone strategy). More complicated to set up Tiered programs are great choices for e-commerce service providers, luxury retailers, and companies in the travel and hospitality industry. Chapter 4 Paid Programs Paid loyalty programs provide an exclusive feel by incorporating a monthly or yearly fee that members pay for access to special services, discounts, or unique opportunities. Although the customers these programs draw may require more coddling, the increased transaction value is substantial. The program’s barrier to entry draws prospects further into your marketing funnel, and provides an incentive to continue making purchases on your site. Amazon Prime To overcome the barrier to entry, Amazon Prime offers a 30-day free trial for new members.
They’ve also found ingenious ways to market the program as part of the checkout process, on pop-ups, and even incorporating “try prime” into the Amazon logo on every page. Newegg Premier Newegg has largely copied Amazon’s placement techniques for program enrollment, but they’ve mastered the visual approach to benefits with an attractive, flat design and intuitive images.
Are Paid Programs Worth The Money? A fee to join is the hallmark of this loyalty program, and it’s a two-edged sword.
It gives you the chance to cultivate an extra revenue stream, higher transaction values, and highly-targeted campaigns, but the value may not be apparent to all customers. Pros. Higher spend per customer. Easy to understand.
Provides additional (ancillary) revenue stream. Highly-targeted. Value is obvious to subscribers Cons. First-time visitors most likely won’t see value. Barrier to entry may dissuade some customers. May require increased customer service efforts Paid programs are perfect for larger retailers, and also make a smart pick for luxury product and service sites.
Information businesses can also make good use of this loyalty program model. Chapter 5 Punch Programs One of the simplest and oldest loyalty program designs, punch programs are extremely popular in brick and mortar businesses, but their adoption in e-commerce isn’t as prevalent. The idea behind punch cards is that customers are rewarded for purchasing a particular product or service with “punches.” One punch is given per purchase. After a set number of punches are collected, they receive a product or service of equal or lesser value free of charge.
Hotels.com Rewards Simplicity in action. This is easily one of the best punch card rewards programs in e-commerce, with a beautiful explainer page. L’Oreal Gold Rewards Another beautifully simple program, but one problem – if L’Oreal weren’t such a household name, that sign-up form would send customers running. It’s asking for way too much. What Are Punch Programs Good For Punch programs are intuitive, easy to use and track, and low cost. Unfortunately, they tend to be targets for fraud, though. If you can track your customers, they make a great option for a very basic loyalty program.
Pros. Easy to track online (potential advantage over brick and mortar punchcards). Familiar program model for customers. Can be highly targeted or appeal to mass customer base. Low implementation cost Cons. May decrease perceived product/service value. Common target of loyalty program fraud A great choice for new loyalty programs, but tracking data and preventing fraud can be an issue.
Ideal for experience-based industries like travel, although they work well with consumer goods that are high value and high consumption, too. Chapter 6 10 Tips For Launching A Reward Program Launching a reward program is an important step in growing your business, and one you don’t want to mess up. Keep in mind these basic guidelines for your loyalty program from our: 1. Keep it simple If your program is a hassle to use or difficult to understand, it won’t be used. Simplicity and predictability is key to creating a.
Start with your existing mailing list You already have loyal customers. They like you enough to join your mailing list. Use that to your advantage and make them feel special at the same time by offering them a chance to be the first members of your loyalty program.
You can iron out the kinks and make sure your program is perfect with the help of an audience you know will be receptive. Make it easy to join Ask only for the information you really need. Loyalty programs can be great lead capture incentives, but no one wants to share their life story with an ecommerce retailer. An email capture, and maybe your customer’s name and birthday (if you offer something special to help them celebrate, like a discount), are all you really need at this point.
Make earning rules simple If no one understands how to earn in your program, they may ignore it. The simpler the rules are, the more likely your customers are to actively try to earn. Make spending rules simple Once again, simplicity is huge. If customers have to jump through hoops to spend, they may feel that your loyalty program isn’t such a great deal, after all. Even if they loved the simplicity of earning, and your company. Launch in digestible chunks Noticing a theme here? Don’t overwhelm your program members.
Launch the program in easy-to-understand chunks so that each part of it feels like a natural progression from the previous step. Don’t overwhelm customers with options Keep your rewards transparent, worthwhile for your customer, and easy to use or acquire. Have your end goal in mind You started your business with a solid foundation – a business plan that helped you see the viability of your vision and a clear path to your goals.
The loyalty program deserves equal attention. It’s the path to keeping your customers, and your bottom line profitable.
Use automation You focused on simplicity for the customer. Don’t forget simplicity for you, too.
Automation can reduce the workload on your end, while. That personal touch is important. Speaking of which 10. Make it about your customer, not about money From the rewards you offer to the way your program feels to the customer, make it about them.
If you’re only thinking about earning on your end, you’ll miss the mark and you might destroy your credibility with the customer in the process. People crave a personal connection, even (or perhaps more so) in e-commerce. Chapter 7 Why Online Rewards Programs Fail Reward and loyalty programs sound like the key to instant success so far, but most fail spectacularly. According to Cap Gemini, 89% of social media sentiment regarding loyalty programs was negative. Sure, people are more likely to talk about things they don’t like, but that’s a startlingly high statistic. Cap Gemini reported that the key reasons for negative social media sentiment about loyalty programs were:.
a lack of reward relevance, flexibility & value (44%). a lack of a seamless multi-channel experience (33%). customer service issues (17%). That gives you a few places to strengthen your loyalty program before you launch it, but there are more steps you can take to make sure it’s a hit, too. How much do you like colonoscopies? Yeah.not many people could call them enjoyable. Make sure your sign-up form doesn’t feel like one to your customers.
Asking for too much information is something that 38% of people feel loyalty programs do, according to Bond Brand Loyalty. Coupled with the lack of personalization and dynamic loyalty program content that plagues many loyalty programs, you’ve got a recipe for failure. Customer Loyalty Is Bigger Than Discounts Reward programs are a great opportunity to cultivate relationships with customers, but they fail almost as often as they succeed. Make sure yours works by providing great customer service, focusing on the relationship with your customers, and not being too intrusive, but still listening to what they want and providing it. Be sure to avoid these. Another common cause of loyalty or reward program failure is focusing too much on just the transactions that bring you revenue.
Sure, you need to keep your bottom line in mind, but a loyalty program can be so much more – if you do it right, it’s a powerful tool for referral marketing, too. Focus on building a relationship with your loyalty program members. Listen to your customers and act on their comments.
To get the highest ROI possible from your loyalty program, help them love you so much that they become volunteer brand ambassadors. Part of helping your customers to market you is making sure you provide opportunities for engagement outside of sales transactions. Gamification models help with this, and keeping active social media profiles and informative, interesting content on your site will help, too. Spread The Word If no one knows about your rewards program, it’s not going to work. Promote heavily and intelligently to your own email list first, and then via social media and on your website.
Marketing Your Customer Loyalty Program To Your Email List Earlier in this guide, I mentioned that you should start with your own mailing list. Don’t forget to do it. At the same time, actively work to grow your mailing list and encourage new members to join your loyalty program, too. Consider offering a special perk or benefit to your email subscribers who join the rewards program. When they joined your mailing list, chances are high that you ‘paid’ for their subscription with an incentive offer. This is the same kind of transaction, and deserves just as much investment on your part. Publicizing Your Online Store’s Rewards Program on Social Media Once you have the kinks worked out and are confident that your program will be a hit, start advertising it on social media.
Focus on platforms that your demographic gravitates towards (for example, Pinterest tends to be dominated by women, while Reddit is predominantly a men’s platform). Check out to master social media loyalty program launches. Make sure your campaigns are carefully targeted, and get the right content to the right potential members at the right time. Using Your Website to Promote Your Rewards Program On your website, you’ve got a relatively captive audience.
The people on your site are already interested in your company. Don’t get lazy, though. Offer an opt-in freebie, discount, extra points, or some other incentive to entice site visitors to join your membership program. Lightboxes and pop-ups work well for advertising your program, as do reminders in the checkout process. In some cases, they can!
Customer Relationship Metrics Track vital loyalty metrics to judge how your loyalty program is performing and how much your customers love your company. Stats like churn, response, and retention rate can keep you on the right track to a strong customer relationship.
Keeping track of your relationship with your customers isn’t an option. It’s a requirement. Track your customer relationship’s pulse with these metrics: Customer Lifetime Value Many ecommerce entrepreneurs slowly leak profitability by spending more per customer than they are worth. Once you figure your product profit margin, add in, fulfillment, shipping, and staffing costs your bottom line can get away fast. CLV = customer value. by the average lifespan of a customer To calculate customer value you need to know two things:. Average Order Value (Total Revenue/Total Number Of Orders). Purchase Frequency (Total Orders/Unique Customers) Customer Value = Average Order Value.
Purchase Frequency To calculate average customer lifespan, look at the average time between purchases. For more on CLV, I recommend you check out this from SweetTooth. Adoption and Redemption Rate It’s relatively easy to calculate program adoption rate.
You just have to look at the number of people enrolled divided by total number of customers. So if you have 1,000 with reward points and 10,000 customers your adoption rate is 1%. More importantly, though is your customers are spending those points and giving you more business. Here is how to calculate your redemption rate. Redemption Rate=Number of Points Spent/Total Points Issues Churn Rate Although it seems pretty straightforward as a measure of how many customers you lose vs.
Dealer Rewards Loyalty Programs
Gain in a given period, you can calculate churn rate in many ways. According to: “you can measure client churn in one or more of the following ways:. Total number of customers lost during a specific period. Percentage of customers lost during a specific period.
Recurring business value lost. Percentage of recurring value lost” The lower your churn rate is, the better your business is doing. Keep that number as close to zero as possible! Retention Rate Wait.hold up. I bet you’re wondering about what the difference between churn and retention rate is. They’re opposites. Customer Retention Rate doesn’t take new customers into account, while churn rate does.: There are three pieces of information you need to calculate customer retention:.
Number of customer at the end of a period – E. Number of new customers acquired during that period – N. Number of customers at the start of that period – S CRR customer retention rate = ((E-N)/S).100) does an excellent job of listing some other metrics that can help you track your customer loyalty, with and without loyalty programs.
Check out for more numbers to track. Chapter 10 Customer Loyalty Tools and Apps Now that you’ve mastered the basics of loyalty programs, it’s time to find a loyalty app or software program to make creating your program that much easier. Keep your eyes on our blog for more. Keep in mind that not every loyalty program app works for.
Before you get your heart set on one, check to make sure it’s compatible with your e-commerce site. Do You Really Need A Customer Loyalty Program? Loyalty programs, as you can see from this guide, are a huge help in e-commerce. They increase customer retention and transaction value while cutting your costs. If you’re really serious about making the most out of your e-commerce website, sign up for our newsletter today.
You’ll get great content like this, as well as tips and tricks from industry pros. Loved this guide? Somewhere out there is an e-commerce store owner like you who is hunting for the secret to loyalty program success.
Spread some good karma by sharing it now. Hi Darren, It’s a super content that you shared! I would complete your detailed list with one thought: e-Commerce companies can decide which kind of loyalty program can work for them based on their: – brand’s emotions, – pricing, – frequency of their products’ purchases. For example, a loyalty program coalition can work for those brands, which couldn’t raise much emotions in their customers, whose products’ are quite expensive, and they offer products with lower re-purchasing frequency. Timi recently posted.
I really appreciate you all breaking everything down. You have a broken link though for Spark Base. Also after reading this post I was really compelled to set up a tiered VIP style rewards system and looked through all of your resources and found they were all super expensive for a small business to do tiered plans ($200+).
So I went to Shopify and looked and I’m testing a program called loyalty which is only $99 for a tiered plan. It’s pretty great. Only played with the backend so far but thought I’d pass it along as it’s a great option for that. I’m in no way affiliated.
Best perk: 5 percent off in-store and online purchases How it works: Just shop and pay with your card. Why join: In addition to 5 percent discounts on just about everything, you get free shipping on online purchases, plus 30 extra days for returns. The debit card gives you all the perks and none of the interest payments that come with the credit options.
And Target donates up to 1 percent of your spending total to an eligible school of your choice. Enroll in Target Pharmacy Rewards and get a 5 percent off coupon for every five prescriptions filled. The fine print: Credit cards carry a 22.9 percent APR. Also, gift cards, online-gift wrapping services, prescriptions, and some medical services are excluded from the 5 percent discount. How to sign up: Apply in store, using a mail-in form, or at for a Target Debit Card, Target Credit Card, or Target Visa Credit Card.
Best perk: Monthly discounts How it works: You earn a $10 reward any time you spend $100 in a calendar month at JCPenney stores or jcp.com. Why join: There’s no pressure to shop frequently, but when you do spend, you get a discount on a future purchase. You also get access to exclusive sales. Sign up for a store credit card to enjoy the most perks: up to $100 in rewards per month, fraud protection, a birthday gift, and special financing for some purchases, including decorating services, furniture, jewelry, and window treatments. The fine print: Your point total resets to zero each month, and you get a maximum of one reward a month regardless of your purchase amount, unless you’re a JCP credit-card holder.
Transactions made through PayPal don’t count toward your monthly spending. How to sign up: Enroll in JCPenney stores. All JCP credit-card holders are automatically enrolled. Best perks: Early access to sales How it works: Early access and other perks cost you points. You get one point every time you go to the site, five points for every dollar you spend, 25 points for referring friends, 35 points for “liking” the brand on Facebook, and 100 points if you sign in five weekdays in a row.
Why join: The benefits are always changing, but they’re good ones. Early sale access—a huge advantage at a flash-sale site—starts at 250 points, free shipping at 3,500 points, and discounts up to 30 percent require 20,000 points. Members start out at the General tier.
Collect 5,000 points to become a Select member, 10,000 to become a Premier member, and 25,000 to gain Noir status. Premier members get a 1-hour sale preview window; Noir folks get waitlist priority and access to a VIP customer-service line.
The fine print: You can redeem only one reward per order. How to sign up: Go online. Best perk: 10 percent off every Tuesday in stores and on Gap.com, OldNavy.com, and Piperlime.com How it works: Spend $1 in stores or online and get five points. Earn at Gap and all its sister companies: Athleta.com, Banana Republic, Old Navy, and Piperlime.com. For Gap and Banana Republic cards, earn a $10 reward certificate every time you accumulate 1,000 points.
For Old Navy cards, earn $5 in rewards when you rack up 500 points. Why join: This is a great program for folks who shop at any—or all—of this family of retailers. Points aren’t shared if you open multiple cards, but all you need is one, which lets you collect points across all stores and sites. Take advantage of 15 percent off your first card purchase and get 2,000 points just for signing up for e-mail and text alerts—and an additional 500 if you opt for paperless statements. Members get advance notice for sales, exclusive offers, and birthday discounts.
Spend $800 in a calendar year and you attain Gap Silver/Banana Republic Luxe status, with extra benefits including free shipping on all orders, 15 percent off personal sale days, free basic alterations at Banana Republic, access to a priority customer-service line, and triple points days. The fine print: The APR is 23.99 or 24.99 percent, depending on the card. Points expire 24 months after last card activity; $250 reward limit per 30-day billing cycle. How to sign up: Apply for Gap Visa Card or GapCard credit card at or at Gap, Old Navy, or Banana Republic stores.
Best perk: Free product setup helpline for Premier Silver members of the program How it works: One dollar spent in stores or online equals one point. Open a store credit card and earn 2.5 points per dollar, one point per dollar for dining and grocery spending, and one point per $2 on all other spending. Join the free Reward Zone Gamers Club to score two points per dollar for gaming purchases and trade-ins (250 points earns a $5 reward certificate). Why join: If you make some big purchases, the perks are a big incentive to shop at Best Buy—especially with its new price-match guarantee, which includes online retailers such as Amazon.com.
Members receive exclusive offers, promotions, and access to special events. Drop $2,500 in a calendar year for Premier Silver status and earn 1.25 points for every dollar spent, plus get access to a free helpline, expedited shipping, one Geek Squad visit per year, and other nice extras. The fine print: Certificates expire after 90 days. How to sign up: Enroll in stores or online. Best perk: Exclusive store coupons How it works: All Macy’s cardholders automatically receive coupons in the mail. Get a Macy’s American Express card and spend $500 to $999 a year at Macy’s and Macys.com to earn 1.5 percent rewards on all your Macy’s purchases and 1 percent on purchases made elsewhere.
Rewards certificates start at $10. Enroll in the Thanks for Sharing program to earn 10 percent rewards for most purchases made with your card Sept. 11 though Dec. 31 ($25 fee, $10 of which goes to charity). Why join: You get 15 percent off purchases made in your first two days after enrolling (up to $100 off), plus choose-your-own sale days. Make returns for up to two years without a receipt. Preferred American Express members also get exclusive travel offers.
Bonus: Rewards never expire. The fine print: Macy’s store card carries a 24.5 percent APR.
Points aren’t earned on gift card purchases. How to sign up: Apply in stores or at for a Macy’s store card. Call 877-493-9207 or live chat online to upgrade to Macy’s American Express Card. Best perk: Free shipping for online orders of $35 or more How it works: Score 10 points per dollar for regularly priced items, and 5 points for clearance buys.
Get a $10 reward certificate each time you collect 1,500 points. Double-point days twice a year. Why join: Perks include early sale notifications, $5 off birthday gift certificates, and other free promos. The more you spend, the more you earn.
Members with Premier status (those who earn 6,000 points in a calendar year) get free next-day shipping, priority customer-service assistance, 15 points per dollar spent on regular merchandise and 7.5 points for clearance, and triple points shopping days twice a year. Premier members can also bank points to use on larger purchases rather than have them automatically rolled into $10 rewards certificates.
The fine print: Earn up to 50 certificates a year, use up to three certificates on one transaction. Points expire after two years; certificates expire after 180 days. How to join: Enroll in stores. Best perk: A $50 gift card just for signing up How it works: Rack up a generous three points for every dollar you charge at Amazon.com, including downloads, gift cards, and subscriptions. Also earn points at partner sites. One hundred points equals $1 you can spend at Amazon. Why join: If you already shop Amazon frequently—we’re looking at you, Prime members—this card is definitely worth it, especially if you’re in the market for a new credit card.
In addition to earning on Amazon.com, you get two points for every dollar spent at drugstores, gas stations, office-supply stores, and restaurants, and one point per dollar for all other purchases. Points never expire.
Hayden sunday morning. You can also trade points for cash back, gift cards, and travel through. The fine print: APR ranges from 14.24 to 22.24 percent, based on creditworthiness. You can’t redeem reward points for some gift certificates and digital items, Kindle downloads, Subscribe and Save, or AmazonFresh orders. How to join: Apply. Best perk: Free alterations How it works: Tally two points for every dollar spent at Nordstrom, Nordstrom Rack, and Nordstrom.com using a Nordstrom card, and one point per dollar for purchases made elsewhere with the Nordstrom Visa card. Get a $20 rewards certificate for every 2,000 points earned.
Why join: The more you spend in a year, the more perks you get. Spend $2,000 to become a Level 2 member, $5,000 for Level 3, and $10,000 for Level 4. All members receive early access to the store’s big anniversary sale. Starting with Level 2, members are rewarded with increasingly exclusive perks, all the way up to private shopping parties in stores.
The fine print: The credit cards’ APRs range from 10.9 to 22.9 percent, based on creditworthiness. Points expire three years after the end of the year in which they are earned; rewards certificates expire after one year. How to join: Apply in stores or at for a Nordstrom debit card or credit card, or in stores for a Nordstrom Visa Signature card.
. Vivek Seth. Consultant, Cognizant As far as I see it, there are 3 major challenges facing the retailers, wrt Customer Loyalty programs.
Making sense of the data that comes from totally diverse sources, for example the POS data, Customer loyalty data, demographics, syndicated sources etc. Having the analytical capabilities to juxtapose these different sources and derive some insights from these 3. Making these relevant to the times, with the advent of new digital/mobile media, social networking sites, collaboration technologies. Kapil Kumar Sopory.
Company Secretary, SMEC(India) Private Limited In these days of cut-throat competition, customer loyalty programmes would take the gullible for a ride. In my view, a customer pays for quality and value. With so many alternatives available, repeatedly rushing to the one with whom loyalty may be psychologically attached may not be prudent for the customer as such a seller can even dupe by showing something which has better alternatives elsewhere simply via the lure of rewards which may not have matching benefits. Hence, one has to be careful and not be straightway attracted by the rewards only.
Each outlet needs to be examined on its overall merits. David McKnight. Doug, you're right about price inflation; no marketing program is free. The same is true for coupons. If you aren't using them, you are underwriting the cost for the person who does - and when my wife makes it through the check out after saving 50% on the grocery bill, I'm pleased she cuts coupons.
The reality is that price negotiation (through coupons or loyalty programs) is part of that conversation between customer and retail operator. You get the discount (something you want) in exchange for providing something the retailer or product manufacturer wants (sales of specific items or repeat visits).
And the retailer attempts to make membership in the loyalty program something really worth your while. Of course, there is an option to carrying a pocketful of cards (which I also refuse to do - especially to places I seldom personally frequent, even as my wife does). Most of these systems allow you to key in your phone number to accomplish the same thing.
The balancing act is the retailer must make sure they provide a solid benefit, making you want to be a part of the program. If they don't, they push you away to another store that gives you the experience you want (assuming you can find one). ron randolph-wall. CEO, Quantum Loyalty Solutions I created and built the world's first co-brand credit card program for General Motors in 1985, the world's largest coalition program for Garanti Bank in Turkey and about 50 other loyalty programs so I am very familar with almost all types of solutions that are out there.
Most companies fail in their loyalty efforts because they cost more to run than the measurable incremental revenue generated (usually there is a high degree of existing customer subsidization involved). An example would be all of the airlines, hotel and car companies.
They are locked into a rewards scheme (because everyone in their catagories are doing them) and with zip chance of attracting a new customer. Consumers are smart and they belong to all of the programs in the market place. Hence, these loyalty programs became a big way for companies to spend money against an exisiting user. Coalition programs at least offer particpants a chance of bringing in new customers. Dheeraj.
Founder, Director, Marketspade The key phrase here is 'customer engagement'. This is where most businesses / retailers ought to direct their focus. Does a bookstore sales person engage you in a discussion about the kind of books or magazines you like to read? If she does so, how effectively is this information communicated to the supply side of her business? How much weight do you attach to her suggestions? Customers would be loyal if they are helped while purchasing an item that makes them feel better off or that really saves them money.
Inter alia, this calls for knowledgeable sales personnel who have honed the gift of connecting with most customers. A perspective on the hospitality industry, specialty stores (sports goods, interior design, art and craft, gourmet foods etc.), jewels and fashion accessories, luxury cars and a few more should add an interesting dimension to this article and Prof. Alvarez's research. Herveline Denis. Communication Manager, Loyalty Expert Hello, I totally agree with your article and most of the comments.
A loyalty program shouldn't only confine to a simple communication tool, aimed at animating a database of client. As you correctly point out, those programs are doomed to failure. A loyalty program should really be considered as a sales generator and therefore, it deserves to be thought and driven strategically. One other point I totally agree with is the importance of data.
It's not only important, it's a prerequisite. At Loyalty Expert, the French marketing agency I work for, we don't only have marketing experts. We also have 25 data experts working daily together with our marketers. This synergy of different skills, combined with One-to-Me communication technologies, enables us to decline our clients sales and marketing policy in a unique and scientific fashion, for each client. It's no more a matter of level because each and every client of the loyalty program is being targeted personally.
Each campaign (print or web) is designed for him/her: the graphic design varies from a person to another and most of all, products and promotions totally match to each person need. No one can get the same campaign, each client is unique. As you can gess, we get really high return on investment and our clients are really satisfied! Since the creation of Loyalty Expert back in 2004, we have quickly grown to 70 people today. Making us the French leader in the BtoB market!. Anonymous. I work in a company that provides internet services.
We face significant churn of users (lets say 10% annually), and it is really hard to come up with a loyalty program that would make sense financially. If we gave discounts to all, i.e. Including these 90% of customers that remain with the company anyways, that would erode the margins and it is questionable what effect to the churn prevention this measure would have. Raising speeds is not possible with the network we have. It is almost impossible to predict who intends to drop the service for a selective approach. Sometimes it is really hard to find an appropriate loyalty program.
But they are important for sure. Oscar Olmedo. Estudiante, Universidad de Guadalajara Apply a loyalty program is essential for the conservation of customers and these customers serve as a backup for any situation possible. I believe that implementing a loyalty program, not just give something back to stay, but to offer something more than the question material, must support any type, one-way process of communication, in a matter of financial support, provide quality products, prices remain stable and if the price changes justify and inform the cause of increased ect. This series of practices succeed in obtaining a consistent remained more customers because they will feel part of the organization. Dave Gee. Adjunct Professor of Marketing, University of Wisconsin-Madison As an Adjunct Professor of Marketing and CEO of Bungee Loyalty Programs I would like to comment.
Loyalty Programs Strategies have evolved significantly since inception as has the rationale for implementing and maintaining loyalty programs. We have seen Loyalty Program Implementation Rationale and Maintenance has evolved as follows: 1) Brand differentiator 2) Churn (customer turnover) reduction system 3) Customer Lifecycle Management 4) Data Mining and Marketing ROI Dave Gee Adjunct Professor of Marketing - UW-Madison CEO - Bungee Loyalty Programs http://www.bungeeloyaltyprograms.com.
CVS ExtraCare Rewards The CVS ExtraCare rewards program provides members with ExtraSavings and ExtraBucks Rewards, allowing them to save money with coupons that are generated based on their shopping history and earn money back in rewards. Members get 2 percent back in ExtraBucks Rewards on everyday purchases.
And if you join the CVS ExtraCare Pharmacy & Health Rewards program, you can get $5 in ExtraBucks Rewards after filling 10 prescriptions. In terms of accessibility, CVS offers an app and an ExtraCare card, which you can use online as well. And the next time you go to CVS, visit the drugstore's ExtraCare Coupon Center where you can scan your card to see coupons and special offers. Bloomingdale’s Loyallist Rewards Program Bloomingdale's Loyallist rewards program members enjoy multiple perks, including but not limited to:.
Free shipping with no minimum purchase required. Points for every dollar spent. Double points for shoes, cosmetics and fragrances. A $25 Reward Card for every 5,000 points earned Signing up is free, and points can be collected via in-store shopping and online shopping.
But, you can also accumulate points out of the Bloomingdale's store if you shop with a Bloomingdale's card. Neiman Marcus InCircle Become a member of Neiman Marcus' InCircle, and start earning points today. InCircle is a seven-tiered program with different benefit levels. The more money you spend annually, the more benefits you can get. All InCircle members earn two points for every dollar charged on purchases — except for President's Circle members, who earn five points. Once 10,000 InCircle points are reached, members receive a $100 Point Card to use toward future purchases.
Higher-tiered rewards members can also receive complimentary gift packaging, free two-day online shipping, double points and an InCircle concierge, among other benefits. Gilt Insider Program Gilt connects users with dramatic sales on tons of items — from designer clothing, accessories and kids' items to furniture, home art and even travel — helping shoppers save as much as 70 percent, according to its site. By joining the Gilt Insider loyalty program, members can earn points by shopping or referring friends. For example, you can get 5 points per $1 spent and 25 points per referral. These points can then be redeemed for exclusive sales, early access to sales, a free gift on your birthday, VIP customer service, wait list priority and more. My Best Buy You can if you join My Best Buy, which offers points to members for Best Buy purchases, free shipping on purchases of $35 and up, access to special sales and the ability to track rewards with the Best Buy mobile app. By joining My Best Buy, you can get one point for every $1 spent.
And once you get 250 points, you'll get a $5 reward certificate. And if you're elite member, you can get a 10 percent point bonus on top of the rewards; Elite Plus member get a 25 percent bonus. The program is free to join. But the more money you spend, the more points and rewards you'll qualify for.
In fact, in order to become an Elite member, you must spend at least $1,500 annually online or in-store. Become an Elite Plus member by spending at least $3,500 annually. Nordstrom Rewards Earn and redeem points for spending money with Nordstrom Rewards. Members get two points for every dollar spent at Nordstrom, Nordstrom Rack and HauteLook. Every 2,000 points collected will get you a $20 Nordstrom Note. But with four different levels of rewards, the benefits increase with the amount spent. If you spend at least $10,000 per year, for example, you can get VIP access to in-store events, such as a private fall-fashion shopping event with drinks, appetizers and more.
Sephora Beauty Insider Program You can if you sign up for its Beauty Insider Program. This loyalty rewards program is simple: You earn points on all purchases you make at Sephora retail stores, Sephora online and in Sephora locations in JCPenney stores. You receive one Beauty Insider point of every dollar spent when you provide your registered email address at checkout. Once you accumulate enough points for Beauty Rewards — which are usually deluxe product samples — you can add the reward to your online shopping basket or at the Sephora register if you're shopping in-store. Home Depot Pro Xtra Loyalty Program Pro Xtra, the Home Depot Pro loyalty program, is ideal for contractors and DIY-ers. Members will save on paints, stains and primers, and have access to online-only offers, bulk pricing on numerous items and more.
And, like with many loyalty rewards programs, Home Depot's Pro Xtra Paint Rewards program has a tiered system that rewards you based on how much money you spend:. Spend $2,000 and save 10 percent. Spend $4,000 and save 15 percent. Spend $7,500 and save 20 percent. JCPenney Rewards With the free JCPenney Rewards program, purchases turn into points for future savings. You can earn one JCPenney Rewards point for every $1 spent on qualifying purchases — just make sure you use a JCPenney credit card. If you don't have a JCPenney credit card, you can still get one point for every $2 spent with a different payment method.
Once you reach a total of 200 points, JCPenney will send you a $10 Reward certificate. In addition, members can earn Perk Rewards for shoe and bra purchases. DSW Rewards Join the DSW Rewards program for free, and earn points for every dollar spent. Once enough points are earned, members receive a $10 certificate to use on their next shopping trip.
DSW Rewards members also receive special birthday offers, access to Double Points events and more. You can earn even more benefits if you join DSW Rewards Premier, which requires members to spend at least $600 per year. But as a Premier member, you have access to free, next-day shipping. Plus, you can even earn five more points per dollar spent at the shoe retailer, among other benefits.
Safeway Reward Points Safeway's Reward Points loyalty program allows you to earn points by shopping at the supermarket chain with your Safeway Club Card and using the points for discounts on gas at designated stations. Earn 100 points to save 10 cents per gallon, earn 200 points to save 20 cents per gallon, earn500 points to earn 50 cents per gallon, and earn 1,000 to save $1 per gallon. Here's how you can earn points at Safeway:. You can get 1 point for every $1 spent on groceries.
You can get 1 point for $1 spent on pharmacy items. You can get 2 points for every $1 spent on qualifying gift cards. National Car Rental Emerald Club Join the Emerald Club at National Car Rental, and receive exclusive benefits to improve your car rental experience. With an Emerald Club membership, customers bypass the rental counter, as well as choose their own car and their own rewards. Other benefits include but are not limited to:.
No second-driver fees. Free rental days: For every qualified car rental, receive one rental credit until you reach seven credits. Priority service in Europe, Latin America and the Caribbean. Target RedCard And finally, the Target REDcard: a vital credit card rewards program for those who shop at Target regularly.
It's free to join, and cardholders will save 5 percent on everyday purchases. In addition to instant savings, cardholders will also receive free shipping and 30 extra days for returns. Simply link your to a Target debit card — all purchases will simply be taken out of your bank account, without any fees or hidden catches. You'll also be able to withdraw up to $40 from your bank account at checkout. Keep Reading.