This article is meant for everyone who struggles with launching a successful loyalty program as it offers many tools and tips on how to bring your loyalty campaign to the next level.
We all know that a dog is man’s best friends, but is it possible to be best friends with a company or a product? Ok, maybe friendship is too big of a word, but what about loyalty?
Customer loyalty is one of the crucial elements of running any successful business as it operates like a perpetuum mobile driving sales up and granting you free publicity as your customers begin to recommend your services and tell their friends about your products which hits this sweet spot for Social Proof and social influence of your services.
If you’re interested in learning more about customer loyalty, we highly recommend checking out this article to get you started.
It goes without saying that in order to maintain customers’ loyalty, your company has to continue to deliver the best quality products that meet the ever-changing needs of your customers and also provide excellent customer service that helps in making your clients feel protected and appreciated. However, there is yet another element that may prove decisive in maintaining your customers loyalty and that’s Customer Loyalty Programs. Why bother? Because data suggests that approximately 84% of consumers are more willing to stick to the company that offers some form of a loyalty program (Nielsen).
Let’s examine some top loyalty programs and see what makes them stand out.
Sephora Beauty Insider Program
Sephora is the leading brand in the global prestige retail. Established in France in 1970, the company launched its loyalty program in 2007 (available only in the US and Canada) and since then it has been deemed one of the best of its kind. It is a free rewards program which allows customers to collect points and redeem them for rewards (typically deluxe products samples or product bundles) which can be found on the Reward Bazaar where you may get personalized rewards and products that for instance match your skin tone or hair colour.
The premises are quite easy to follow and the program is available both online (also via app) and offline. Interestingly, customers may also receive special cards (white, black, and gold) to have tangible proof of participation in the program.
The most note-worthy elements of the Sephora program is gamification - program is divided into three tiers (Insider, Very Important Beauty Insider and Rouge). Each tier is based on how much money a customer spends each calendar year on Sephora merchandise, and so to reach VIB status a customer has to spend $350 and to attain Rouge status - $1000. Each tier offers special deals, rewards and incentives, e.g. Rouge status provides a free 2-day shipping. Each status also gives you more points for every dollar you spend:
- Beauty Insider - 1$ - 1 Beauty Point
- Very Important Beauty Insider - 1$ - 1.25 Beauty Point
- Rouge - 1$ - 1.5 Beauty Points
Sephora also keeps the program interesting by offering special, time-limited deals on certain products (e.g. granting 3 times more points) thus creating a sense of urgency.
In short, Sephora’s program is centered around the customer and it is heavily personalised which makes the customer feel special and appreciated. Sephora doesn’t just offer free, bad-quality stuff, but invests in the program to make it beneficial for the customers and so this program really feels like the brand is giving back to the customers.
We are sure that right now you’re thinking to yourself - can I replicate Sephora’s program using Voucherify platform? Of course, you can! Now we are going to show you how you may use Voucherify platform to recreate Sephora’s tier system:
- First, you need to create Customer Segments which can be already populated with your customers (if you already imported them with CSV or synced with your CRM using API) or empty (you may populate them later on) which makes it super convenient to first do the groundwork before uploading your customer data.
Make sure to create auto update segments so that the new customers who match the tier criteria may level up automatically without you manually updating your database.
- Next you should define the criteria for the given segment. Sephora divides its audience on the basis of the total amount of orders, so let’s do the same.
Repeat this process until you have created three neat customer segments that vary in the total amount of orders. Congrats and don’t forget to click SAVE each time you create a new segment.
- Now we can use these segments to create your new loyalty campaign.
You know the drill - first provide some general information on your campaign, such as: name and timeframe. Sephora does not establish any limits on the duration of the program, however if needed Voucherify has got you covered as you may make your campaign valid only on selected days of the week, e.g. on Fridays or make your loyalty cards time-sensitive, e.g. you may send an activation link to the card that may expire within 24 hours.
Our Creator offers you great flexibility not only in terms of scheduling proper timeframes, but you may also use the “Auto update” option which means that your campaign is going to be automatically extended if you exceed the limit of the loyalty cards set at the beginning.
You also have the possibility to customize the code pattern of the loyalty cards, such as code length, prefix or postfix. It is also possible to create personalised codes, such as “For-Jane”.
- Next, establish Earning Rules for your campaign. As the name suggests, these are the rules that regulate when your customers are awarded points in your loyalty program. In order to create them, you need to create customer segments and custom events which help to properly organize the campaign and make sure that only selected customers receive the loyalty cards and selected rewards. Check out the screen above and follow the instructions therein presented to proceed. As you can see our Earning Rules are basically Customer Segments that we’ve just created.
Great job! You are on your way to create a tiered campaign using customer segments and custom Earning Rules. Now all that’s left is adding rewards to your program and saving the campaign.
ClubBebe Loyalty Program
Bebe is a boutique chain established in 1976 which operates actively in the area of e-commerce. They also created their loyalty program - ClubBebe which on the surface resembles other such programs (clear conversion rates of 1 point per each $ spent, a reward each 250 points, and a 4-tier system). What makes ClubBebe stand out is that the program rewards not only purchases but also actions of its participants: 200 points for referring a friend, 20 points for social media connection and 15 points for an item review.
The diversification of your program is always a good idea as it enables your customers to interact with your brand in more ways than just one - on the basis of seller and buyer. In addition, you receive free publicity as your customers feel motivated to invite friends to your program, to review purchased items (Social Proof) and to share your company on social media.
Let’s replicate this program in Voucherify and you’ll see how easy it is:
First, we need to create custom events so that when they take place the program participants will be appropriately rewarded. In order to do so you have to enable tracking of a particular event on your website or app. You will find more information here.
To replicate ClubBebe program we need to create 3 events (Refer a Friend, Post a Review, Connect to Social Media).These are custom events and as such they ought to be created manually and you should enable tracking of these events on your website or app in order for them to work properly. After creating each event, hit SAVE. From now on, every time a customer refers a friend, posts a review or connects your brand to their social media, he/she will trigger the event and earn points.
To create custom events, go to your Project Settings and Event schema:
Now we can go to Campaign tab and create a new loyalty campaign. After naming your campaign and filling in some general information (timeframe, number of loyalty cards) go to the second step and create event-based earning rules.
Follow the instructions above and create 3 rules in total. Congratulations! You’ve just established the rules guiding your Campaign. Now, each time a customer refers a friend they are going to be awarded 200 points, when he/she posts a review - 15 and connects to social media - 20 points. To finish creating the campaign, choose redeemable rewards and save it.
TOMS One for One® Program
Sephora and many other brands offer monetary rewards or tangible incentives to customers taking part in loyalty programs. Yet this is not the only way of doing business. TOMS is a US based company designing shoes, eyewear and other apparel. Blake Mycoskie, the founder of TOMS, after traveling to Argentina and encountering poverty-stricken children with no proper footwear nor eyewear, decided to establish a company that is guided by principles not profits and so campaigns aimed at providing footwear, eyewear, water were born. As of today, TOMS is also engaged in safe birth and anti-bullying campaigns.
TOMS customer loyalty is not rooted in the classic 1$-1 point model. It is based on the customers’ emotional attachment to the company and the sense of doing good by purchasing their products. With every purchase, a customer is given a chance to help someone. This non-monetary incentive works as a great business model, especially in the case of millennial customers who by and large are more engaged in the issues of social justice and equality than previous generations. However, it is important to notice that millenials are less interested in being labeled activists and actively taking part in marches and demonstrations. What suits them better is being a sort of everyday changemakers and changing the reality through personal choices and spending habits which is easily provided by TOMS initiatives.
If you are interested in creating similar campaigns, you can do it without breaking a sweat with Voucherify.
The main goal of TOMS program is to allow customers to help those in need by making a purchase. Voucherify can support this kind of program by creating special charity gift cards and allowing the customers to decide which initiative they would like to donate money to.
The first step is to set up rules governing the campaign, such as earning 1 point per each dollar spent which was already presented in the analysis of Sephora Beauty Insider Program. Next we are going to set up a reward for our loyalty program - a charity gift card. We are feeling pretty generous today so we’re going to add 50 points to the cards already so that the customers won’t feel let down by seeing the big round “0” on their account.
After creating new gift card vouchers, we may move on and create a loyalty campaign with gift cards as rewards. This way you will give your customers more freedom as later on in the customer’s cockpit, your clients will be able to choose charity projects that they’d like to support with points collected on their loyalty cards.
Follow the steps presented in the picture and voila! You just set up your own loyalty program inspired by TOMS and began an amazing charity project at the same time.Now you may add Metadata to your campaign - it is optional and it will allow you to for instance add custom attributes to your customers, and segment them in accordance with attributes unique for your business model. When you’re done, go to the Summary, hit SAVE and the campaign is ready.
How to build a successful Customer Loyalty Program?
As we’ve just seen there are many elements to building a successful Customer Loyalty Program or any campaign aimed at garnering customer loyalty. That’s why we’ve prepared a list of features that most successful loyalty campaigns possess:
- Clear rules and conversion factors, e.g. one dollar spent in your store gives the customer one point, which later on can be redeemed to earn special rewards. Here, a great idea is to have a well-written explainer page with all the benefits that your program offers.
- Make it a challenge - levels and tiers could encourage your customers to spend more and remain a part of the program for longer. Most people have this primal urge to compete and win so make use of it and introduce elements of the game into your program.
- Make it effortless and public or VIP-only - there are two ways to go about this issue. Knowing your audience you have to choose between making a public program for free that anyone can join (e.g. giving your customers cards which they can use to collect points) or perhaps making it more exclusive and paid (Amazon Prime).
- Create a sense of urgency - you can make your program last for a limited period of time or make it semi-permanent, but here you need to make sure to often update it so that it doesn’t become repetitive and simply boring.
- Avoid any kind of confusion - we don’t recommend creating several loyalty programs at once as you’re running the risk of confusing your customers.
- Get personal (but positively!) - many customers appreciate and seek possibilities to customize rewards they might get. Here, the more options the better. If it’s not possible to customize your products, just make sure to offer a big variety of products to make up for it.
- Diversify your rewards - talking about rewards, remember that not all of them have to be material or monetary. You could also offer vouchers, gift cards or even charity donations (like TOMS). By doing so, you will increase the emotional attachment that your customers have to your company which reinforces the bond between you and the customer.
- The more the merrier - you may think about running a coalition program with another company and have its services listed as possible rewards. For instance, if you’re running a loyalty program for a hairdresser’s, perhaps a good idea would be to partner up with a producer of hair products.
- Go mobile - do we have to add more? Paying via your company’s app makes it ridiculously easy for your customers to collect points and for you to analyze their preferences and behaviour. Luckily, Voucherify also offers a mobile app!
- Provide both online and offline versions of your loyalty program to make sure that it’s inclusive (e.g. both an app and a card).
- Reward not only purchases but also the actions of your customers, such as signing up, referring a friend, etc. This way it feels less like a transaction and more like a meaningful exchange.
All of these features can be successfully applied in your campaign via Voucherify platform.
Click here to get in touch with one of our experts who in no time will put you on the right track to creating a kickass loyalty program.
As you can see there are many elements that play a role in launching and running a successful loyalty campaign. At first you may feel overwhelmed, however trust us, it’s not rocket science and it gets even easier with the help of Voucherify.
Can’t wait to launch your customer loyalty program?