The main reason for its success lies in the fact that it lets members choose how they want to spend their reward points. But what about smaller-scale businesses, how can they take advantage of customer loyalty programs?

This customer loyalty program enables Uber users to earn points that can be used to redeem a number of rewards, ranging from meals to miles.

For example, some of the rewards Uber offers include flexible cancellations, price protection, priority pickups and support, and so on. Hopefully, these customer loyalty program examples have taught you the value of customer retention and having a loyal customer base and inspired you to create such a program of your own.

Feel free to comment down below with your own ideas and experiences on how to come up with and implement a perfect customer loyalty program. Get Started. Join our team on Kiva. Features Case Studies Templates Quiz Templates Survey Templates Form Templates Pricing Blog Products Survey Maker Lead Generation Software.

Login Try It Free. The Importance and Benefits of Customer Loyalty Studies have shown that acquiring a new customer costs an average business around X more than re-selling to a current one. But what does customer loyalty exactly mean?

Here are some of the main benefits of having a loyal customer base: Better customer retention and less churn Customer referrals or word-of-mouth marketing Cost-efficiency Reviews, testimonials, and other user-generated content But how do you create a loyal customer base? What Are Customer Loyalty Programs?

Starbucks Rewards With the Starbucks Rewards program, each purchase brings a customer closer to free drinks and food. Virgin Atlantic Flying Club Okay, earning miles and using them for future flights is one of those customer loyalty programs every airline does.

Nothing Bundt Cakes has a popular punch card loyalty program that offers customers a free personal cake when they buy 12 of them. Opt-in email solicits the customer's email address for communication with your brand.

Once the customer opts in, your company can email them offers or promotions. Emails are cheap to compose and distribute and can be sent at almost any frequency. You can also use email automation tools to deliver emails efficiently. Free trials are typically thought of as incentives used to convert potential leads, but you can also utilize them in rewards programs too.

For example, say you have a new product or service that's about to launch. You can release a free trial to members of your loyalty program. This not only acts as a reward for customer loyalty but also works as a marketing tactic that primes your customers for a future sales call.

One way to add value is to look externally at businesses to partner with. By combining your resources, you can create an offer that benefits both you, your partner, and your shared customers.

Credit card companies like Visa and MasterCard do this all the time by offering cards sponsored by a specific brand. While having a credit giant on your side is nice, start by looking for local, non-competitive businesses you can partner with to add more to your offer.

You can incentivize loyal customers to become advocates by offering them an attractive reward for customer referrals. If your offer is good enough, customers will be happy to take the time to network your business with other potential leads.

Tracking points is a tried and true method of tracking customer loyalty. The two keys to making these programs successful are a worthwhile incentive and a reasonable timeline to earn the incentive. For example, if you sell workout gear, people might make purchases fairly often, and there are many different businesses to choose from.

Your incentive would need to be valuable — like a free t-shirt — and the buyer would need to be able to earn it quickly enough to keep them striving toward it, but not so quickly that the reward loses value.

Loyalty discounts come with a bonus to the traditional customer loyalty programs we've covered so far. These types of programs allow you to give back to the customer while also collecting data that can help you personalize their buying experience. Kroger's Community Rewards program is a great example of loyalty discounts in action.

To employ this type of program, you'd offer consistent, predictable discounts to customers every time they display an identification marker that associates them with the program.

This might be a QR code, a card, or a phone number. On the back end, your business captures data about what the customer purchased. Over time, you'll understand your customers' trends, patterns, and habits so you can improve their experience, making them even more brand loyal.

These types of programs are so strong because the incentive is consistent and predictable, which gives the customer a reason to come back again and again.

Giving back to the community is good for the world and business. A great way to foster customer loyalty is to offer added benefits for shopping with your company — like doing something for the greater good.

Baron Fig makes office materials, a broad market to sell in, but has a program dedicated to planting trees for every item sold.

Conscious consumers will think highly of your small business and spread the word about these programs because of their selfless nature. Community programs are highly effective for small businesses as they can attract customers in your area or from computer screens.

Some examples are family-owned gyms offering Zoom classes to make customers feel more included, or having bakeries pop up in local flea markets. These are all steps small businesses can take to build customer loyalty and social bonding as well.

To get started with building your customer loyalty program, you have to prioritize the customer experience. Editor's note: This post was originally published in July and has been updated for comprehensiveness. An actionable guide on building customer loyalty and retention. Service Hub provides everything you need to delight and retain customers while supporting the success of your whole front office.

The Beginner's Guide to Building a Customer Loyalty Program Sophia Bernazzani Barron. How to Build Customer Loyalty Adopt a multi-channel customer service system.

Provide exceptional service. Be consistent. Focus on the customer, not the competition. Build credibility through customer interactions.

Deliver added value. Share positive customer experiences. Reward customer loyalty. How to Create a Customer Loyalty Program Choose a great name.

Create deeper meaning. Reward a variety of customer actions. Offer a variety of rewards. Make your 'points' valuable. Structure non-monetary rewards around your customers' values. Provide multiple opportunities for customers to enroll.

Explore partnerships to provide even more compelling offers. Make it a game. Topics: Customer Loyalty. Don't forget to share this post! Customer Stickiness: What It Is and How You Can Build It.

Customer Loyalty: The Ultimate Guide. How a POS System Can Drive Your Customer Loyalty Program. Customer Loyalty Analytics: 6 Ways to Help Grow Your Business. What Is the Customer Loyalty Ladder?

We're committed to your privacy. HubSpot uses the information you provide to us to contact you about our relevant content, products, and services. It works because LEGO enjoys such a strong emotional connection with its customers. Building this kind of loyalty is incredibly valuable for a brand that sells high-ticket items, and for which increasing purchase frequency is essential.

The MoxieLash Insider program is another excellent example of a value-based loyalty program. Like Sephora, they understand the value of building a community of advocates, especially on social media , where a highly visual product like theirs plays particularly well.

They know that, in their case, the downside of giving product discounts for non-transactional activities is more than offset by the benefits of social media engagement. Tiered loyalty programs involve levels of membership that offer increasing rewards and benefits based on customer spending or engagement.

Tiered loyalty programs are particularly well-suited to high-end, luxurious products, where the feeling of exclusivity can heighten the sense of luxury. At the silver and gold tiers, customers get early access to sales and promotions.

At gold, they get £20 off on their birthday. Hospitality companies tend to use tiered loyalty programs, too. Hilton Honors is a notable example. Tiered loyalty programs are particularly effective in industries with fluctuating demand. Where purchases are frequent and consistent, and average order values low, exclusive tiered benefits can be less of an incentive to make repeat purchases.

With subscription-based loyalty programs, customers pay an ongoing fee to get access to perks, products or exclusive events. The benefits have to be significant.

Subscription-based loyalty programs are best suited to frequent, less-considered purchases — such as books. Similarly, Amazon Prime gives customers unlimited to extremely fast delivery for a set fee. Compare these industries to some of the luxury brands adopting tier-based loyalty programs.

When Amazon launched Prime Video, they had a ready-made audience of Prime customers ready to adopt it, and they could strengthen the loyalty program by adding it as an additional feature. The results can be huge. One notable example is TheCHIVE. To offer this superior experience, customer loyalty programs provide a great platform for brands.

And photo entertainment website TheCHIVE is doing exactly this. By rewarding their customers for photo uploads and social sharing, community is being put at the heart of their gamified blog. As a result, the brand has gained an active community of highly engaged customers.

By giving customers a reason to return to the site, they are more likely to shop again and again. The fashion and apparel ecommerce sector thrives on the allure of exclusivity and the joy of personal expression.

Loyalty programs in this space are uniquely positioned to tap into these consumer sentiments. Fashion brand Lively is an example of a loyalty program that makes its most loyal customers feel special.

It rewards members with points on their birthday, when they refer a friend and if they follow Lively on social media. Not only is it an effective loyalty strategy for a fashion brand, but customers also see the value of joining straight away.

It also creates a strong and lasting emotional bond with the customer early on. This customer loyalty program is called Pulse Perks. It aims to encourage customer engagement on social media.

At the same time though, it also helps increase user-generated content UGC , customer reviews and photo submissions. Meanwhile, people are four times more likely to buy a product if a friend or family member recommends it.

These programs work because fashion is a highly visual and shareable industry. The key for fashion ecommerce brands is to tailor loyalty programs that not only reward purchases but also encourage brand interaction and social sharing.

1. Sephora's “Beauty Insider Program” · 2. “LEGO Insiders” · 3. Barnes & Noble · 4. TheCHIVE · 5. Astrid & Miyu's “Astrid & 1. Marriott. Marriott's rewards program, Marriott Bonvoy Benefits, allows members to redeem points for free hotel nights, dining, and other 1. Offer First-Time Purchase Discounts to New Customers; 2. Present Special Offers in Exchange for Reward Points; 3

Sample program rewards - Successful customer loyalty program examples ; Admirer: Entry-level tier, which is free to join. Believer: ; Insider: $1– 1. Sephora's “Beauty Insider Program” · 2. “LEGO Insiders” · 3. Barnes & Noble · 4. TheCHIVE · 5. Astrid & Miyu's “Astrid & 1. Marriott. Marriott's rewards program, Marriott Bonvoy Benefits, allows members to redeem points for free hotel nights, dining, and other 1. Offer First-Time Purchase Discounts to New Customers; 2. Present Special Offers in Exchange for Reward Points; 3

Based on their needs and chances, they can make their own choices. Subscription programs create a bond by aligning with customer preferences, offering personalized services, and often including exclusive perks or discounts for subscribers.

It both ensures regular engagement and provides customers with a convenient and predictable experience. This is a way that businesses use to establish consistent relationships with their customer base.

For creating advantages of loyalty programs that include subscriptions, there may be some need to do more because, as the example suggests, people have great expectations when they subscribe. Compared to other loyalty programs, gamified loyalty programs create a more memorable and positive connection between your brand and your audience.

To apply this idea, you should, of course, check the availability of your brand and act accordingly. Duolingo is a language-learning platform, and it uses a loyalty program for engagement.

Users earn badges as they progress in their language-learning journey, achieving milestones and completing various challenges. The brand displays visual markers of achievement so that people pay attention to complete the levels of learning. This is one of the easiest and most likely to achieve program ideas because most users are generally eager to engage with gamification elements.

You can include them effectively to get the most out of it. Membership loyalty programs encourage people to take a step toward following the brand. To create a membership system for your brand, you can use membership website builders , which allows you to follow the members.

By using this system, you can curate a private space where members enjoy unique privileges, personalized content, and special offerings. Amazon pushes the limits with its Amazon Prime customer loyalty program idea and goes out of the box, unlike conventional models.

The cornerstone of its success lies in the fast, free, and efficient delivery service, elevating the brand's identity.

That is how its customers automatically contemplate the fact that Amazon Prime can provide exclusive discounts for them due to their membership ideas.

What Amazon achieves here is that it offers more than customers expect with a simple membership, including Prime Video, Amazon Music, Prime Reading, Amazon Photos, and more. To use this loyalty program, you might need a good strategy because Amazon has been through a lot to succeed in this plan.

Social media contests are also visual elements that activate customers. People love user-generated content and different types of user-generated content. With social media contests, you need to aim to include new people and lead them to participate in your loyalty program.

You should both incentivize your potential users and show them your appreciation at the same time. Plus, the best part of creating a loyalty program with social media is that it will contribute to your engagement and visibility at the highest level. The loyalty program of Lively represents a good way of guiding customers.

Within ways to earn rewards and points, there are social media platforms to engage and ways you can obtain benefits.

The more platforms you have to engage, the better. Since the center of this loyalty program depends on engagement on social media, you should directly share the social media campaigns that you run. The first thing that VIP loyalty programs create is the sense of exclusivity and personalization that they provide for their members.

The brand should lead customers to spend more time, discover new activities on the website, and earn more premium perks. By launching a VIP loyalty program for your customers, you offer incentives for them and strengthen your connection with them.

Designer Shoe Warehouse, or DSW, runs a traditional VIP loyalty program that rewards its customers with points for each purchase as well as ties of rewards that unlock as customers spend more. Instead, its online system recognizes customers by name, phone number, or payment info.

The challenge with such a program is that customers may forget it altogether. Additionally, the brand launched an email marketing campaign in to remind them about the program.

This campaign was successful because of its level of personalization. Such a loyalty program brings access to loads of customer data.

DSW turned the data collection into a marketing tactic by building hyper-personalized emails rather than generic emails that rot in inboxes. Because you promote your goodwill, you can leave a positive impact and provide opportunities to your customers.

To be distinguished from other brands for your customer loyalty program, you should include an element to reflect the charitable side of your brand. All non-profit actions can be included in your program. Paid customer loyalty programs should be the ones that encourage the most.

The effectiveness of a program like this depends on how well you market it to your existing customer base. If your brand is not recognizable, new customers may not be interested in it, so you need to concentrate on the current customer base. Another important thing is that paid loyalty programs must include exclusive benefits to the members.

Make use of social proof popups if you want to draw attention to the loyalty program on your site. If you have a brand that you can form easily, then it is the right choice to apply for this program.

For this program, you need to arrange your benefits based on the payment system. Downloading mobile apps should be a part of the loyalty program to support sustainability. For this customer loyalty program, the mobile app should have more benefits than using the brand on its website.

Since the use of a mobile app is practical, users find mobile apps more accessible and convenient to start with.

Your brand should have an app to apply this customer loyalty program idea. Hence, your app should contain exclusive opportunities for the users.

There are also types of customer loyalty programs that you can consider for the continuation of the process. To improve your application of customer loyalty program ideas, there might be questions that need to be answered. Depending on your customer loyalty program idea, there are different metrics that you should pay attention to, such as customer retention rate, repeat purchase rate, average transaction value, redemption rate, customer satisfaction, Net Promoter Score NPS , Customer Lifetime Value CLV , engagement metrics, referral rate, churn rate, cost of acquisition vs.

program costs, and social media metrics. Most industries can use customer loyalty program ideas. The types of businesses that benefit from them are retailers, restaurants and cafes, e-commerce businesses, travel, subscription services, automotive services, beauty services, financial services, telecommunications, pet care services, and entertainment parks.

Regarding your customer loyalty programs, there are important legal considerations, such as data protection, privacy laws, terms and conditions, fair advertising, antitrust laws, mobile regulations, and international compliance.

As we suggest, there may be some factors that affect the situation of your customer loyalty program, its needs, and expectations.

Offering customer loyalty programs is beneficial to get more loyal customers and keep your brand in mind. What you need to remember is you need to provide value to your customers in order to keep them coming back.

No matter what your customer loyalty program idea is, you need to choose the one that fits best to your business. Points-based Customer Loyalty Program: Customers earn points for purchases that can be redeemed for discounts or rewards. Tiered Customer Loyalty Program: Loyalty program with multiple tiers, offering increasing benefits as customers progress through levels.

Paid Customer Loyalty Program: Customers pay a fee for exclusive access to premium loyalty rewards and benefits. Value Customer Loyalty Program: Your loyalty program may include charitable contributions with each customer transaction.

Referral Customer Loyalty Program: Customers earn rewards for referring new customers to the business. They let customers accumulate points with their purchases which they can redeem for free products and other perks. Some points programs even allow customers to earn points through other ways like leaving reviews, sharing posts on social media, having a birthday, and so on.

A tier-based loyalty program is where a customer will get different benefits depending on their rank. The higher a customer is ranked, the better their rewards will be. To get to a higher tier and earn exclusive rewards, customers need to buy and engage more with a brand.

Businesses will then rank their customers based on sales metrics and engagement. A paid loyalty program is when a customer receives immediate and continuous benefits once they pay a recurring or one-time fee. If a company can convince consumers of the value of their program, it can build higher customer value.

A value-based loyalty program is when a business donates a percentage of their sales profits to a charity or organization rather than offering the customer a reward. This is a great way for brands to embrace advocacy for various social, environmental, and economic issues.

The reward for the customer is knowing that their contribution of buying from the brand is going to something that benefits society. Brands are not limited to using one program type. Combining different strategies can be an innovative way to earn customer loyalty and make the loyalty program unique and effective.

While loyalty programs are a great way to retain loyal customers, they are also a great way to acquire new ones. The Starbucks Rewards program does just that by bringing customers closer to free drinks and food with every purchase.

They can then redeem those stars to get free drinks, food, and even Starbucks merchandise. Not only does this make it easy and convenient for customers to use regularly, it also allows Starbucks to gain valuable insight into behavioral analytics.

From go-to drink orders to seasonal favorites, Starbucks can gather information on all of these habits, allowing them to offer more relevant rewards to their customers. When it comes to redeeming their points, customers can use their points towards unique travel experiences such as a mountain climbing trip in Nepal.

Rather than offering basic discounts, The North Face curates experiences that help build a stronger connection between consumer and brand which speaks directly to their target market.

While earning points in exchange for discounts and free products is effective, adding in a tier program helps gamify the experience by allowing customers to unlock new levels of higher-value benefits for spending more on the brand.

By spending more, customers access higher tiers that offer exclusivity to different products and services. This motivates their customers in lower tiers to spend more so that they can attain these higher tiers of exclusivity.

Not only do members get to choose their own rewards, but they also receive access to the Beauty Insider Community, where beauty lovers can share tips, advice, and all the new products that they love.

With its tier structure, customers can earn better and better rewards for their loyalty, even gaining access to exclusive events at the highest tier. Plus, higher-tiered customers receive bigger discounts during sales events. This makes the entire experience more valuable to its customers and thus more successful.

Although the ridesharing industry is fairly new, Uber has gone above and beyond taking over the industry. When you become an Uber Rewards member, you earn points with every eligible dollar spent on rides and UberEats orders.

These points can then add up to Uber Cash Rewards and other benefits like priority pickup and flexible cancellation. The more points that are ranked up, the higher the membership level, which unlocks even more rewards and benefits. Their program is designed to provide users with various benefits that allow them extra time, flexibility, and control — leading to a better customer experience.

From two free checked bags to priority seating, Alaska Airlines makes it fast and easy for their customers to gain exclusive benefits while traveling. From flights to hotel rooms, Expedia offers a way to save money while traveling.

The more you travel, the more points and rewards you get with their three-tier program. A big part of their success can be attributed to their loyalty program, Chick-fil-A One, which boasts 13 million active users.

Chick-fil-A also uses their app to gain insights on customer data and feedback so they can offer an experience that is worthwhile to their customers.

A well-known paid membership program that completely changed the game is Amazon Prime. By paying an annual fee, Prime members get access to free two-day shipping on millions of products as well as access to their video streaming service.

While big retailers like Walmart and Target are main competitors, Prime memberships are how Amazon differentiates themselves from other similar brands.

Online shopping offers the convenience of shopping directly from your device in the comfort of home.

Free shipping makes it just as affordable as traditional in-store shopping. An upfront investment also encourages customers to validate their purchase by spending more on the brand. Although the main point of a customer loyalty program is to convince customers to spend more money on a brand, the best customer loyalty programs drive real value to their customers.

This is a great customer loyalty program example that demonstrates a financially viable way to be generous to their valued customers. The convenience of getting food delivered straight to your door is unmatched, but the delivery fees tend to add up pretty quickly if done too often.

They even offer a donation match program where customers can opt to donate their change to charity and GrubHub will match every cent. For customers who love the convenience of takeout, the value of the program outweighs the cost of the monthly subscription.

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