Loyalty programs aren’t new. They’ve been around for a while and have done a good job of making members stick around, stay engaged, and help keep the money flowing in.
Now, with loads of these programs out there, picking the right one for your group while keeping your members happy is a bit tricky. Should you go for one with different levels, one where you get points, or maybe one that relies on referrals?
Let’s check out some of the best loyalty programs for members, see what’s good about them, and what’s not so great, and figure out where they work the best.
But before we get into that, let’s start by looking at what loyalty programs are all about.
What Exactly is a Member Loyalty Program, and How Does It Work?
A member loyalty program is a scheme designed to encourage and reward the continued support and engagement of individuals who are part of a particular group or organisation.
The basic idea is to give members incentives to stay loyal and involved. These programs are commonly used in various sectors, including retail, hospitality, and online services.
The workings of a member loyalty program typically involve a system where members earn rewards or benefits based on their ongoing participation, purchases, or contributions to the group.
The rewards can take various forms, such as points-based loyalty programs, discounts, exclusive access, or tangible items. Members accumulate these benefits over time, creating a sense of value and appreciation for their loyalty.
Also, a Forbes article said that having a loyalty scheme can really make customers happy and bring in more money. For example, a study by McKinsey found that people in a loyalty programme are 59% more likely to pick one brand over another and 43% more likely to buy something every week.
The mechanics may vary, but the general process often includes the following steps:
- Enrollment: Individuals become members of the loyalty program by signing up or joining the organisation.
- Earning Points or Benefits: Members accrue points or benefits through specific actions, such as making purchases, participating in activities, or referring others to join.
- Redemption: Accumulated points or benefits can be redeemed for rewards, which may include discounts on future purchases, free items, or special privileges.
- Communication: Regular communication is key to keeping members informed about their progress, upcoming rewards, and any special offers or events related to the loyalty program.
- Feedback and Improvement: Successful loyalty programs often include mechanisms for collecting feedback from members. This feedback helps in refining and improving the program to better meet the needs and preferences of the members.
5 Best Creative Member Loyalty Programs
Here are innovative member loyalty program ideas to boost retention:
1. Exclusive Access Tiers
Create an engaging loyalty programme by introducing exclusive access tiers. Members progress through different levels, unlocking a range of escalating benefits and privileges.
This tiered structure not only encourages long-term commitment but also instils a sense of exclusivity among members.
As individuals climb the loyalty ladder, they are rewarded with increasingly valuable perks, fostering a deeper connection with the programme and the brand.
- Pros: Encourages long-term commitment, fosters a sense of exclusivity, and rewards loyalty with escalating privileges.
- Cons: May require careful communication to avoid tier envy among members in lower tiers.
2. Personalised Rewards System
Enhance member engagement in loyalty programs by implementing a personalised rewards system. Tailor incentives based on individual preferences and behaviours, leveraging data analytics to understand member choices.
This approach not only increases the perceived value of the loyalty programme but also demonstrates a genuine understanding of each member’s unique interests.
However, careful attention must be paid to data privacy concerns to ensure the seamless operation of this tailored rewards system.
- Pros: Enhances member engagement by offering rewards aligned with individual interests, and increases the perceived value of the programme.
- Cons: Requires robust data management and privacy safeguards; potential challenges in obtaining accurate member preferences.
3. Community Challenges and Rewards
Foster a sense of community and collaboration through challenges that require collective effort from members. By encouraging teamwork, this loyalty programme not only strengthens the bond among members but also adds an element of shared achievement. Rewards are distributed based on the community’s overall success, creating a collaborative and supportive atmosphere within the membership.
- Pros: Builds a sense of community, encourages collaboration, and strengthens the bond among members.
- Cons: Monitoring and fair distribution of rewards may pose logistical challenges; and may not appeal to individualistic members.
4. Milestone Celebrations
Recognise and celebrate significant milestones in members’ journeys. This could include anniversaries, noteworthy contributions, or the achievement of specific goals.
By acknowledging these milestones, the loyalty programme creates memorable moments and reinforces positive relationships with members.
However, a system must be in place to accurately track and acknowledge individual achievements.
- Pros: Celebrates member achievements, creates memorable moments and reinforces a positive relationship.
- Cons: Requires a system to track and acknowledge member milestones; may not cater to those who prefer low-key recognition.
5. Surprise Rewards and Events
Inject excitement and unpredictability into the loyalty experience with surprise rewards and impromptu events.
By offering unexpected perks exclusively for loyalty programme members, this approach keeps members engaged and delighted.
Careful planning is essential to ensure that surprises align with member preferences and contribute to a positive and unexpected experience.
- Pros: Creates excitement, enhances the element of surprise, and keeps members engaged.
- Cons: Requires careful planning to ensure surprises align with member preferences; may not suit those who prefer predictable rewards.
Customer Loyalty Program Examples
1. Sephora – Beauty Insider
Back in 2007, when Beauty Insider started, it was a cool loyalty program idea. Sephora did things differently by letting customers pick their own presents and bonuses, unlike other brands.
Now, the Beauty Insider programme has three levels (Insider, VIB, and Rouge) based on how much you spend. This way, Sephora thanks and rewards customers depending on how much they shop.
The Beauty Insider program keeps changing and staying clever, showing that Sephora cares about what customers like and want.
Image by Sephora Beauty Insider
2. Famous Footwear – Famously You
“Famously You” earned a spot in America’s Best Loyalty Programs 2021. Famous Footwear does things differently from other businesses – they want their loyal customers to feel happy right away. They give something called “cash back.”
Cashback is the second most liked way to get money as a reward because customers can decide how they want to use it.
That’s exactly what Famously You does. When customers buy things, they get cashback rewards. Then, they can use this money to make their next purchases cheaper. It’s a clever way to make customers feel good about shopping with them.
What’s more?
With this loyalty programme, members enjoy free delivery, exclusive coupons, birthday presents, and early alerts about sales. If you spend more than $200 a year, you move up to the next level called Superstar, unlocking even greater rewards.
Wrapping Up
Creating loyalty schemes is really important to keep customers happy and show them you appreciate them. These schemes can be different, but they all aim to keep customers, say thanks, and make them feel good about buying from you.
Think about which loyalty program is best for your business. Points can make customers buy more, and different levels can make them feel special. Cashback and discounts work well, especially for online shops. For ethical or eco-friendly stores, non-money rewards attract customers who want to support a good cause.
Ready to make your customers even happier? See what Membership.Ninja has for you today!