When competition for customers is fierce, it is more important than ever to attract repeat customers.According to Sarah Robinson, author of Fiercely Loyal, it is “7 times lessexpensive to keep a customer than to acquire one.So naturally, brands turn to rewards programs that deliver value to their customers, and provide actionable data for future marketing efforts and product optimization. However, figuring out how to implement these programs can be difficult. So take a look at how some well-known brands created and optimized customer loyalty card programs that actually work.

Starbucks

The Starbucks rewards card is free to sign up for, and gives customers two “stars” for each dollar spent. This rewards system is tiered – the green level is given once a gift card is registered online, and gold-card status is achieved after accumulating 300 stars. For every 125 points accrued, the customer gets a free drink. Starbucks reinforces scarcity principles by requiring gold card customers to earn 300 points per year, among other terms and conditions. This rewards system also relies on gamification principles, which encourages customers to make certain purchases, or purchase on consecutive days. Most importantly, the Starbucks rewards card is available as an app where customers can pay for items, reload their card, and view deals.

Implementing a rewards program like the Starbucks Rewards program doesn’t have to be a terribly intricate process. To retain customers, be willing to reward frequent purchasing – and make the reward one worth pursuing. Further, leverage your email lists to give your customers a means to reach a reward more quickly. If you don’t have an email list, give your customers a good reason to opt-in. People get enough advertisement emails, but emailed deals are far more alluring.

 

Sephora

Sephora’s free rewards card – the “Beauty Insider” works similarly to Starbucks in that each purchase helps you accumulate points. When you hit point milestones, you level up to receive benefits like free online shipping and unlimited free beauty studio makeovers. But regardless of your membership level, every cardholder gets a gift on their birthday. Offer free, continuous benefits once customers meet certain levels. Perks like free shipping or a birthday gift epitomize the “frugal wow” –- and these benefits pay for themselves with loyalty. Think about what you can do that will impress your customers and won’t break the bank. And although the concept of a birthday gift isn’t revolutionary, it does reinforce the relationship and gives you an excuse to get contact information.

 

Barnes & Noble

For $25 a year, Barnes & Noble members receive 40% off hardcover bestsellers and 10% off anything else in the store – plus free shipping for online orders. Barnes and Noble doesn’t give anything away, but they reward loyal customers handsomely.

Some loyalty programs don’t need to engage customers constantly to pay off. But while Barnes and Noble encourages sale of loyalty cards for increased revenue, your paid loyalty program should give serious benefits to serious customers.

 

REI

REI uses the membership platform beyond what Barnes & Noble does – an REI membership is your ticket to shop. The catch is that not just anyone can shop here – REI requires a simple, one-time $20 membership fee for access to their retail and online stores. REI membership entails a 10% dividend returned to members, and quarterly “garage sales” where members can purchase returned merchandise.

REI is members-only. They offer a steep enough yearly dividend for customers to view large purchases with a built-in 10% discount. While it may be difficult to build a successful brand using a members-only mentality, giving dividends for membership gives customers a subconscious incentive to spend more – because they will get more money back later.

 

Conclusion

Membership cards for retailers and brands alike serve to accomplish a key objective: Keep your customers engaged and hungry for more. By giving your customers incentive to stay loyal, you can spend more time and effort on other pursuits, and less time trying to retain customers. While you’re at it, optimize your merchandising efforts with Simplifield – and give your customers a truly exceptional retail experience.