You have probably heard of a customer loyalty program and have likely been a part of a loyalty program at least once before. If you have ever gotten a punch card at your local coffee shop where once you buy 8 coffees you get your 9th coffee free with a cookie, that is an example of a type of loyalty program.
Of course, there are many more kinds, but the type above is the type of program that most customers are familiar with. Loyalty programs are so popular because customers love to get free things, but it is equally as beneficial for the company as well. Loyalty programs are proven to be one of the best ways to create customer loyalty to a brand and increase revenue to the business.
In this post, we will explore some of the best and most unique customer loyalty programs companies are currently using today that are successful and entice loyal customers to purchase more and more from a brand to hit their reward.
Reward points are nothing new to the customer loyalty program world. Essentially, when a customer who is a member of the loyalty program makes a purchase, they will earn a certain amount of points depending on the item and how much it costs. Once they get to a certain number of points, they can then use those points for some type of reward. Often times, the company has an already laid out plan for the earned points, such as a certain mascara.
However, Sephora does things a little bit differently. Instead of choosing how the customer uses their points, they allow the customer to choose how they use them. People like to have choices and to feel like they are in control of their accounts and their money. Therefore, choice plays a powerful role in retaining customers, creating loyalty, and increasing revenue for the company.
While many loyalty programs are designed for the sole purpose of making customer buy more so the company can make more money, that is not always the case, and TOMS proves just that. Instead of using a loyalty program to get discounts on shoes and so TOMS can increase their profit margin, they use their program to help people in need.
TOMS typically has a certain type of customer and they are more inclined to help create good and change in the world. For every pair of shoes TOMS sells, they donate a pair of shoes to someone in need that does not have access to shoes. Customers can also use their rewards to help support a wide variety of organizations such as the Wildlife Conservation Society.
Customers are more inclined to purchase from companies they feel are not taking advantage of them and are just as committed to helping people and making a positive change on a global scale. While TOMS may not be directly profiting from customer rewards program, more people are likely to buy from TOMS and repeat buy, increasing their profits while doing good.
Loyalty programs are a great and effective way to create loyal customers, make them spend more than they usually would, and increase profit margins. People like to be rewarded with free items or feel like they are making a positive change in the world by purchasing through different brands with the same values. Rewards and loyalty programs and mutually beneficial for companies and customers and figuring out the best way to use a program in your business can revamp and change the way customers purchase from you.