Meet the customer loyalty programmes that really work
What makes a successful rewards programme? We asked brands that know
They’re designed to reward customers for spending more, and to convince shoppers to keep coming back. But what makes a successful customer loyalty programme? And should you create one?
Studies show that 90 per cent of brands have some form of customer loyalty programme, and most fall into three main categories (or a mix of the three):
Points programmes: where customers receive points for every dollar they spend. These can then be redeemed for vouchers, discounts or products.
Tiered programmes: where shoppers are categorised into different tiers or groups – such as gold, silver and bronze – according to how much they spend. Each tier receives different perks.
Value programmes: where shoppers can ‘earn’ points and redistribute them to a charity of their choice.
We spoke to two brands offering some of Australia’s best-loved loyalty programmes.
Case study 1: Rewards by Country Road
With a membership that stretches into the millions, it’s fair to say that fashion and homeware retailer Country Road offers one of Australia’s largest and most successful loyalty programmes.
In fact, says Paul Conti, Country Road’s digital manager, 70-80 per cent of total sales are derived from rewards programme members “making the rewards programme one of our most valuable assets”.
We spend a lot of time thinking about how to improve recognition, service, access and experience for our rewards members.”- Paul Conti, Country Road’s digital manager
Conti says that all metrics that relate to the loyalty programme – from tier movement to member value – are constantly tracked, so Country Road can monitor the success of the programme. “We also track brand equity every quarter, so we can keep an eye on how our members feel about the brand and the rewards program.”
How it works: Customers earn points every time they shop, and are then categorised into five tiers – member, bronze, silver, VIP gold and VIP platinum – depending on how much they spend every year. Each tier unlocks more benefits. In addition, Country Road offers ‘Spend & Earn’ vouchers every time customers spend $100 or more in one day, access to Spend and Save sales, and rewards for their birthday, for example.
Why it works: One of the secrets to the success of Country Road’s rewards programme? A single view. Customers earn points whether they spend in-store or online, and Conti says this ‘single view’ has been critical to the programme’s success.
“A single view of a customer is incredibly important. We know from our research that up to 70 per cent of Country Road shopping journeys include both an in-store and online touchpoint. We don’t have ‘in-store customers’ and ‘online customers’. Our members typically use both to discover, research and shop our collections, and our rewards programme reflects that.
The main benefit is that our members are rewarded for every shop, irrespective of the point of purchase.”- Paul Conti, Country Road’s digital manager
Exclusivity is another important factor, says Conti, with rewards members offered special benefits like Spend & Save, as well as invitations to in-store and partner events as well as elevated service both in-store and online.
As a result of the rewards programme, Country Road has been able to offer more targeted discounting and reduce overall reliance on public promotions, says Conti. “We don’t plan to offer a single public storewide promotion this calendar year, outside of Black Friday,” says Conti.
Country Road closely tracks all transaction metrics – from acquisition to churn, win-back, member value and tier movements – in its monitoring of the rewards programme, which is overseen by staff across the business.
Considering a rewards programme?
Conti says that offering a single view of your customer should be the number one priority. “You need to know who they are, and what they’re doing, so nail that first.
Then it’s about working out what loyalty means for your business, and what your customers want from you. If you can offer them real value through recognition, service, access and/or experience, then I think you’re on the right path.”- Paul Conti, Country Road’s digital manager
Case study 2: Nourished Life Rewards Club
As one of Australia’s first natural skincare and beauty e-tailers, Nourished Life was also one of the first rewards programmes for environmentally conscious online shoppers.
Today, the programme has 326,000 members, and one of its key objectives is to make earning points fun and form an emotional connection with customers.
How it works: Customers earn points as they shop, with up to 5 points per $1 spent – and 100 points equating to a $1 Nourished Life voucher.
Shoppers are divided into three tiers – bronze, silver and platinum – and customers can earn more points by referring a friend or leaving reviews for products they’ve bought.
As well as financial rewards, Nourished Life club members can also earn gifts and experiences. “It’s not just a discounting programme,” says Lani Barmakov, Nourished Life’s e-commerce director. “Instead, there’s a big focus on enticing rewards as you level up – from birthday and anniversary gifts to exclusive access to offers, naturopath consultations and gift hampers.”
It’s not just a discounting programme. Instead, there’s a big focus on enticing rewards.”- Lani Barmakov, Nourished Life’s e-commerce director
Why it works:
Full integration means personalisation
Nourished Life’s loyalty programme is fully integrated into its marketing technology, with members’ information synced across all of its platforms, from its customer relationship marketing (CRM) tool to its support desk and email service provider (ESP).
This offers both personalisation and opportunities for segmentation, says Barmakov. “As we learn more about our customers and think beyond transactions, we can personalise their user experiences – and their rewards – according to individual interests and personal journeys, creating a sense of community and connection with the brand.”
Multiple sign-up points
Shoppers are encouraged to sign up to Nourished Life’s rewards programme in a range of ways – from on-site pop-ups and prominent sign-up modules to paid social media advertising.
Incentives, such as competitions, discount codes and free gifts with purchase, are also employed to convince customers to sign up.
Considering a rewards programme?
Barmakov recommends thoroughly researching your customer to determine which rewards they value most. Next, come up with a rewards programme that stands out “by choosing unique rewards or elements of gamification”.
Want more loyalty programme inspiration? Check out these programmes from top retailers:
Sephora’s rewards Beauty Pass rewards programme is known as one of the best in the business – and for good reason. Members earn points for every dollar they spend, and these can be redeemed in Sephora’s ‘Rewards Boutique’ where customers can select from a range of deluxe beauty samples. Members can earn extra points by writing product reviews and filling out a beauty profile.
One of Australia’s most established loyalty programmes, Priceline’s Sister Club allows members to earn points as they spend, and rewards them with free twice-annual beauty boxes. Sister Club members can also score discounts at affiliated brands, while members in the top tier receive exclusive gifts.
Anna Saunders is a journalist who has worked for a range of magazines and newspapers, and is the founder of PRIMER
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