February 29, 2024

5 Most Successful Customer Loyalty Programs That Work

In the increasingly competitive e-commerce landscape, customer loyalty programs have proven to be quite a powerful tool for businesses. Research shows that acquiring a new customer costs businesses 5 times more than retaining an existing one. That’s one of the reasons why a well-functioning loyalty program is beneficial to both the customer and the business. 

84% of customers claim that they tend to stick with brands that reward them through a loyalty program. It’s not hard to guess why, as customers’ behaviors change even with the simplest discounts and promotions. Brands that implement smart loyalty programs are able to cut down on customer acquisition costs by providing existing customers with what they don’t get from anywhere else.

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Customer Loyalty Programs

Customer loyalty programs are not a new thing to the world of retail businesses, but their adoption in e-commerce has proven to be a key driver of success for numerous brands. Most of these programs are designed using customers’ data, such as loyalty points, and there are others that are paid programs, social media campaigns, and tiers. 

Regardless of the type, retailers looking to grow their e-commerce business today strive to implement innovative solutions to gain customer loyalty. Generally, customer loyalty programs are based on rewards that are offered to repeat purchasers. The rewards can vary depending on the type and scale of the business in question and may include unique offers, tickets to VIP events and tourist attractions, discounts on favorite products, and much more.

do yo know customer loyalty program impact

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What are Customer Loyalty Programs?

A customer loyalty program allows businesses to reward customers who are frequent buyers or stick with their brand over a long period of time. Considering the business point of view, these programs help encourage existing customers to keep making purchases, which contributes to higher revenue. Some of these programs are based on discounts offered to customers through refer-a-friend offers, where they send a given code to their friends and receive a reward once the new customer makes a purchase.

Customer loyalty programs are essential for both established retailers and growing businesses. Independent of the business model or scale, loyalty programs are designed to provide long-term customers with exclusive benefits to show them that they get something back for their loyalty. Some growing businesses struggle to find the right customer loyalty programs for their organization, and rightfully so because the right program can be a key differentiator between competitors.

That being said, customer loyalty programs are not only about special offers and promotions. Purchasing behaviors and preferences of customers help businesses design the right strategy to offer rewards at the right time with the right products. In some cases, this is done by throwing in an extra product for free with other items purchased by the customer. Aside from helping companies grow their customer base, loyalty programs also open doors for innovation and healthy partnerships with successful businesses.

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How Customer Loyalty Programs Work

Keeping customers around for future purchases is key for growth in any target industry. According to a report, 57% of customers abandon a brand because competitors provide a better experience. Building a brand’s credibility takes a lot more than just plain old marketing tactics. In today’s world, offering personalized services and interacting with customers is very important. With a well-planned loyalty program, businesses can fulfill their goal of motivating customers to keep buying their products, as well as building long-term trust relationships with them.

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Examples of Successful Customer Loyalty Programs   

1. AnthroPerks Loyalty Program

When it comes to developing an effective customer loyalty program, there are a handful of important aspects to consider. Chief among these is a great landing page and the right CTA (Call to Action). The whole purpose of a loyalty program is to motivate existing customers with something exclusive and exciting. This cannot be achieved unless the landing page of the rewards program displays the perks of customer loyalty and answers all possible queries. 

Anthropologie is one such brand that understands and implements these principles quite effectively. The AnthroPerks loyalty program has a landing page that welcomes customers with a “Sign up - it’s free” CTA. Before the customer even thinks about the pricing, they are told that registering for the program is free of cost. Once the free loyalty club membership hooks the customer, the page clarifies the perks of their loyalty program step by step.

The perks start from “inclusive” access to promotions and go all the way to exciting rewards such as free shipping annually. Various other e-commerce retailers offer similar perks, so Anthropologie goes one step ahead to include easiness-to-join as a benefit. Using this loyalty reward, customers can join AnthroPerks without having to go through long forms and verification measures.

2. Tarte Cosmetics Points-Based Loyalty Program

Tarte has a unique approach to offering rewards to its loyal customers. The points-based loyalty program is based on a step-wise process to earn rewards. Teamtarte is the loyalty club of the company which offers a different number of points according to the actions followed by the customer. After joining the loyalty program, the customer can start earning points and then simply redeem them.

For example, if a customer purchases a sample size, they get a different number of points as compared to when they buy a full product. In this way, the customer does not feel left out, and neither does the company lose anything.

Signing up for free on Teamtarte earns customers their first 100 points, creating a sense of achievement. As the program is based on points, the customers get an initial idea of getting more perks for each point. Not only that, Tarte offers its club members early access to upcoming products and encourages them to make purchases quickly through a countdown timer. Tarte’s loyalty program is not limited to sending promotional emails when a customer has registered - they also send a recap of the loyalty status and how many more purchases they have to make to reach the next tier of the program.

An email that includes the customer’s full name, loyalty status, and points adds the perfect personalized touch to make them feel relevant. These loyalty rewards and progress updates encourage customers to keep earning points and benefits in the upcoming levels. Even for customers who do not make a purchase for a long time, Tarte sends emails as reminders with the subject line “Don’t let your rewards points expire!”

3. Sephora Beauty Insider Rewards

Sephora offers its loyal customers a time-tested and renowned point-based loyalty program. The Beauty Insider reward program allows members to earn one point for every dollar spent at the store. As a customer gains points, they go from “insider” to “VIB” and to “rouge” levels. Sephora also offers some of its loyalty rewards to customers who don’t purchase anything - all because they joined the program with their email and are an insider.

These members are targeted in “member-exclusive” promotions and special deals by Sephora. The rewards program is not limited to rewards based on spending. It also includes birthday gifts, access to exclusive events, product launches, and giveaways. The brand’s loyal customers are allowed to redeem points in the form of discounts, store their credits, and get giveaway entries. Sephora’s “Rewards Bazaar” is a platform that invites shoppers to buy their favorite products using loyalty points. 

Sephore includes features items to buy in the announcement email when a new customer becomes a member. Loyalty program members get a chance to redeem their points and win up to $50,000. To put it simply, Sephora wins the customer loyalty rewards game by offering its customers a variety of options to earn and redeem points. This method boosts customer engagement and keeps customers thinking about the brand even when they are not planning to make a purchase.

4. The Sill Green Rewards

Retailers dealing in beauty products and the fashion industry are not the only ones that offer rewards for customer loyalty. The Sill is an online retail platform that sells houseplants and has one of the best customer loyalty programs in the e-commerce world. The program called Green Rewards offers The Sill’s customers a 15% welcome discount as soon as they become members.

The program does follow a level-based approach to earn points and reach new levels by spending more but offers some unique benefits at the end of the year. Customers’ loyalty status in the Green Rewards program is calculated based on their annual spending and goes up to VIP level, at which they consider the customer a Very Important Plant Person.

Just like other reward programs, The Sill’s Green Rewards offer birthday gifts to personalise customers’ experiences. In addition to that, VIP loyalty members also get priority customer support. To date, no other e-commerce loyalty program offers this kind of a reward. The Sill’s reward program awards points to customers based on a unique process. For instance, one way of earning points is purchasing products, but the Green Rewards program adds to customers’ points even when they do something as simple as sharing their birthday, following the company on social media platforms, and signing up for the newsletter. 

If that wasn’t enough, The Sill goes one step further by combining referral points and loyalty rewards in the smartest way. Customers get 500 points for referring a friend, which is an offer no one would refuse. Following this approach, the brand can ensure that buyers stay loyal and also help the company in customer acquisition. To top it all, The Sill also provides customers with a choice to redeem their points through free products or by getting a discount on their next purchase.

5. The North Face XPLR Pass

The North Face is a widely popular outdoor apparel and gear brand that offers services in the online retail sector. The brand rewards its loyal customers with a flexible approach to redeem points based on their specific lifestyle.

The XPLR Pass program offers customers loyalty points with every purchase. Although that is something every customer loyalty program offers, The North Face has more to offer. Customers get to attend exclusive events held by The North Face and can check in at different locations using The North Face app. Moreover, customers can use their loyalty points to get early access to limited edition products, or go on unique tours, like a mountain climbing adventure in Nepal. By offering access to upcoming products, the company also gets to test their new collection.

Instead of asking customers to spend more, The North Face’s loyalty program interacts with the customer. Unlike other brands, The North Face does not offer generic discounts using a one-for-all pattern. The rewards are designed in a way that helps build trust among customers and makes them feel special. Understanding what a buyer really wants helps brands capture their attention and convert them into loyal customers.

benefits of implementing a customer loyalty program

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Start Your own Customer Loyalty Program with XStak 

For small and growing businesses, this is an even more important aspect to consider. Such businesses cannot afford to spend on acquiring new customers every now and then, so retaining the existing ones is their only ideal strategy. Developing a loyalty program is one of the most effective ways to keep existing customers hooked and convert them into a brand’s advocates. 

The initial step to designing a customer loyalty program is understanding the type of customers your business is targeting, and the type of rewards those customers will appreciate. XStak’s LMS is a solution that provides retailers with insights into buyer behaviours, trends, and buying habits to help determine the ideal rewards for loyal customers. With XStak’s LMS, you can get all the information you need about your customers under one dashboard, and optimize your loyalty program in the best way possible.

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Customer Loyalty Program FAQs

What are the best customer loyalty programs?

  • Tarte Cosmetics Points-Based Loyalty Program
  • AnthroPerks Loyalty Program
  • Sephora Beauty Insider Rewards
  • The Sill Green Rewards  
  • The North Face XPLR Pass

What is the purpose of a customer loyalty program?

Customer loyalty programs enable businesses to establish trust relationships with their customers and benefit from reduced acquisition costs. These programs offer rewards to customers for their loyalty after a given period of time or a given number of purchases depending on the brand.

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