How To Level Up Your Loyalty Program (And Measure Success)
Aside from building a moat against rising production and advertising costs, there are many benefits to building customer loyalty.
When Yotpo surveyed thousands of online shoppers for its State of Customer Loyalty & Retention 2023 report, this is what they said:
- Almost 38% would buy directly from the brand’s website instead of Amazon
- Almost 38% would recommend the brand to others
- Just over 36% would wait to purchase until products were back in stock instead of shopping somewhere else
- 35% would purchase multiple times from the brand
- Just over 29% would leave the brand a positive review
😍 Clearly, loyalty leads to many positive outcomes for brands, and luckily, the barrier to building loyalty has gotten a lot lower thanks to technology.
Loyalty programs used to be exclusive to major chains like Sephora, Starbucks, and DSW, but out-of-the-box software platforms have made it possible for DTC brands to offer and track customer rewards in a matter of days (and sometimes hours). ⏱️
Here are a few popular approaches that ecommerce brands take to increase customer engagement and incentivize repeat purchases:
👉Giving VIPs early access to sales and products
👉Granting points for actions taken (ex: social media follows, signing up for a newsletter, quiz completion, referring a friend, dollars spent) and encouraging point redemption for cashback, products, or merch
👉Participation in gated community forums
👉Offering free shipping or add-ons with purchase
👉Sending birthday gifts or birthday gift codes
But if your average loyalty program begins to feel, well, average… there are creative ways to make customers feel special within a standard framework.
Here are four examples of DTC brands that are going the next mile:
- Aura Bora (Limited Edition Access)
Sparkling water slingers Aura Bora recently launched a redesign to make every website touchpoint (pre- to post-purchase) as quirky and fun as the brand itself.
Through their points-based loyalty program, customers who reached the mid-tier status or above gained access to a secret menu of experimental flavors like persimmon clove and banana bergamot that sold out quickly.
- Princess Polly (Surprise & Delight)
Fashionista brand Princess Polly has a standard tier-based loyalty program, but the perks are next-level; members who make it to the top tier (“Backstage Pass”) get entered in a music festival drawing.
And in late February, two Backstage Pass Rewards Members were surprised with tickets, accommodations, and outfits to attend a Harry Styles concert with their best friends and a tour of Princess Polly HQ. That’s a program we want to be part of!
- Simply Be (Exclusive Community Events)
Size-inclusive fashion brand Simply Be offers a Rewards Program without points or levels that customers can opt into to receive free gifts and discounts; however, only top-spending customers are granted access to in-person events.
The Simply Be team is extremely active on social media, and these invite-only get-togethers are a great way to create FOMO.
- Love, Bonito (Private Consultations)
Singapore-based apparel brand Love, Bonito also has a tier-based rewards program, with a fun twist. Members who achieve the highest status (“Gold”) can book a free 1:1 session with a Style Ambassador who provides customized recommendations and fashion tips.
The end result? VIP customers feel pampered and rewarded; the brand increases foot traffic in its retail stores and encourages additional purchases. Win-win!
🤔Parting thoughts:
If you’re considering revamping (or launching) your loyalty program, ensure you have a clear way to evaluate its effectiveness so you know the time and money investment is worth it to your brand.
Here are a few metrics of comparison that will help you paint a picture of success:
- Redeeming members spend X percent or Xx more than non-members
- Drop-off rates for first to second purchases are lower for loyalty program members compared to non-members
- X% of VIPs subscribe to SMS, leave a review, refer a friend, etc., compared to non-members
- Return customer rate increase of Xx since program launch or revamp
Do you have a loyalty program? What have the results been so far? Reply to this email and let us know! 📧
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