A New Generation of Loyalty

Almost 100 years later, loyalty and rewards programs have become commonplace for today’s retailers. The longevity of this customer retention strategy speaks to proven revenue increases and decreases in customer acquisition costs. Up to 84% of consumers are more likely to remain with a brand that offers a loyalty program, and 66% of consumers admit earning rewards changes their spending habits.

It’s a sweet spot in the retail marketing toolkit when done right, and it benefits consumer and retailer alike. Aside from simple revenue benefits, the retailer gets data on shopper preferences and purchases that inform future strategies, while the customer benefits from varying types of incentives in the form of early access, discounts, and other perks. Nonetheless, the secondhand nature doesn’t always reveal the complexity of developing a mutually beneficial agenda.With that in mind, let’s take a look at retailers who are inspiring a new generation of customer loyalty through lifestyle incentives and personalization.

LULULEMON

For an annual subscription of $128 (around $11 a month), members of Lululemon’s loyalty program will receive free shipping, a complimentary pair of pants or shorts, and access to exclusive events and workout classes offered throughout the year. The rate may be upward of an Amazon Prime membership, but Lululemon looks to foster a community around its loyalty members through class instructors, area teams, and brand ambassadors.

“Guests are seeing value in this curation of services and content beyond just our product and in buying into the program and driving value through the loyalty,” Calvin McDonald, CEO of Lululemon.

Lululemon was met with positive results after a conducting a trial run of the program in Edmonton, Ontario and plans to spend the first half of 2019 perfecting its offering. We interested in how far the initiative will expand and its overall impact on athleisure sales, and most importantly, which future initiatives it will drive based on the insights it gleans.

THE NORTH FACE

The North Face incentivizes its members using flexibility through its loyalty program, VIPeak, where shoppers can earn rewards with options tailored to match their lifestyle. For the traditional shopper, points may be earned with every purchase. For the active shopper, VIPeak offers unique events, location check-ins, and app downloads to be redeemed towards ultimate travel experiences like mountain climbing in Nepal.

The North Face deviates from generic product discounts or store credits (often referred to as cash). The company aligns directly with its target market and is curated to build a stronger consumer-brand relationship.

Sponsoring excursions to uncharted mountains may be out of your budget or branding. Still, establishing opportunities for customers to explore your brand while creating valuable memories will strengthen the loyalist bond.

DSW

DSW (Designer Shoe Warehouse) has a long-standing points program that rewards members based on tiers which can be unlocked. After the initial enrollment, DSW recognized customers by their name, phone number, or payment information.
Seamless, right? The program was so automated that loyalists began to forget their DSW ties, resulting in low engagement and spending. So much so, that in 2017 the shoe warehouse launched a personalized email campaign as a reminder to customers saying, “Hey, we’re still here!”
Using detailed customer data, the campaign highlighted how many points needed for the next $10 off certificate and deals customers were currently eligible for. The email also provided a snapshot of their interactions with the brand, including how long they’ve been a loyalty member, points earned, and how much they’ve saved in the past two years.
DSW is a prime example of how to revive customer interest in the midst of stiff competition for customer attention span and discretionary spending. If the shoe still fits, wear it!

IN CONCLUSION

As the experiential offerings continue to grow, brands like Tom's maintain their One for One program, which doesn't offer and brand loyalty at all, yet drives shoppers to spend through charitable donations. Starbucks centralizes customer transactions through its app using preference data, and American Express enables shoppers to redeem points across several industries. Your customers are eager to become loyalists - so how will you entice them in new and engaging ways?