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4 examples of effective customer loyalty rewards programs

4 examples of effective customer loyalty rewards programs

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While many businesses tend to focus on new customer acquisition, it’s the loyal, repeat customers who represent long-term profitability. One effective method of retaining customer loyalty is through comprehensive customer loyalty rewards programs. A study by Bond found that 79% of customers agreed that loyalty programs make them more likely to continue doing business with a brand. The study goes on to say that 73% of consumers are more likely to recommend brands with satisfactory loyalty programs, and 71% of consumers find loyalty programs to be a meaningful part of the customer-brand relationship. 

The best loyalty programs are those which help companies stay consistently engaged with their customers across multiple retail channels. That is why mobile loyalty programs have been found to be the most popular and effective way to interact with customers. Nearly 75% of shoppers say they would show more engagement with their loyalty programs if they could access them via their mobile devices. 

A smartphone app is accessible on-the-go, limits the number of physical cards or coupons a shopper has to carry, and offers a personalized experience. Relevant mobile data can be collected and analyzed by companies to gain valuable insight into buyer behavior, stored in a customer relationship management database, and later used to create highly optimized marketing campaigns.

Below are four key examples of today’s top brands and retailers effectively creating and managing profitable customer loyalty rewards programs. 

Sephora’s Beauty Insider Program

Sephora’s mobile app is widely considered one of retail’s best. Customers earn one point for every dollar spent, which can be exchanged for instant rewards or online items. Members can use their points to get immediate savings at checkout ($10 off for every 500 points), or they can browse the rewards bazaar and exchange their points for unique gifts.

Loyalty program members also receive exclusive early access to new products, free standard shipping, and VIP entry to members-only events. Members can attend a meet-and-greet with the brand founder, book consultations with skincare gurus, or win trips to see how their favorite products are made.

The app also features AI technology which enables users to give themselves virtual makeovers using selected products, as well as access customized recommendations that match each of their beauty types.

Kraft/Shopkick

Kraft® partnered with Shopkick, a popular third-party mobile rewards platform, to boost baking product sales at Walmart locations during the busy holiday season.

Their campaign started with pre-shop branded content that included recipes with the three featured products— Baker’s Chocolate, JET-PUFFED Marshmallows, and Jell-O Instant Chocolate Pudding. Introducing the products before consumers visited the store helped boost purchase consideration, and rewarding shoppers for their at-home engagement built a positive brand-affinity pre-shop. Once consumers were in-store, Shopkick guided them to Kraft’s featured products at-shelf, and provided reward points (“kicks”) for those who scanned the select items’ barcodes, or for making a purchase. They also offered bonus kicks for those who purchased all three products.

Rewarding shoppers for their engagement and purchases builds positive brand affinity, boosts future purchase intent and loyalty, and increases the likelihood of them purchasing from your brand over a competitor. 

The campaign resulted in:

  • Over 9 million in-store product engagements nationwide
  • More than 18 million total campaign impressions 
  • 27% of scanners converted to purchase
  • 55% of purchases were unplanned
  • Greater than 7:1 ROI

What Makes Shopkick Such an Effective Customer Loyalty Reward Program?

shopBeacon

For top retailers like Best Buy and TJ Maxx, shopBeacon technology is an innovative tool that allows large crowds of consumers to each have a personal shopping experience. Beacons welcome each shopper by name and reward them immediately upon entering a partnering retailer. This creates a positive brand affinity early on in the shopping journey, and inspires consumers to keep shopping for additional kicks in-store. This tool links in-store activity with at-home browsing data, filling gaps in the customer shopping journey for our partners.

By eliminating manual check-in, Shopkick makes it easy for consumers to participate in their loyalty program and earn points. Plus, the lack of GPS tracking data helps retailers avoid privacy issues.

Kicks

Brands and retailers who partner with Shopkick can offer rewards for customer loyalty that don’t involve discounts, coupons, or price cuts.

Shopkickers earn kicks (points) by actively engaging with partners in a variety of ways:

  • Walking into select retail locations
  • Scanning the barcodes of select items in-store
  • Going on “treasure hunts” for featured items in-store
  • Watching branded videos
  • Browsing curated lookbooks
  • Purchasing promoted products
  • Linking a credit card and shopping online or in-store
  • Inviting friends to use the app

App users accrue kicks toward gift cards of their choosing. Many Shopkickers earn one or more gift cards every month simply for shopping and engaging with Shopkick partners. Retailers and brands that offer gift cards in the Shopkick rewards store find very profitable returns, as most people typically spend more than the gift cards are worth.

Videos

Videos have been one of the main driving forces behind Shopkick partners’ success. Shopkick’s Discover Tab features short, campaign-exclusive promotional spots, allowing partners to make a quick yet memorable impact with video. Plus, time-strapped shoppers appreciate these visual, to-the-point clips.

Video marketing dominates in 2020, and is expected to continue to reign:

  • 92% of firms deem video important
  • Viewers watch approximately 100 min. of video daily
  • 95% of video budgets will increase

Consumers largely prefer video to text marketing, with 72% of shoppers saying video is a “convenient and effective” way to learn about products of interest.

Most of Shopkick’s campaigns see viewing completion rates of 99% or higher!

Nike+

Nike loyalty program members are treated to exceptional perks like free expedited shipping, reward redemption for in-store merchandise, birthday discounts, surprise gifts at checkout, and exclusive product access.

Nike+ members also receive rewards for staying active. Partnerships with Apple, Headspace, and ClassPass—offering the added value of music, guided meditation, and guided workouts—make it easier to reach fitness goals. 

  • Nike+ boasts 185 million members
  • Loyalty app users spend 3x as much as non-members
  • Digital business has grown 38% in the past few years
  • ECommerce surpassed $10 billion in Q3 2019

Sprint/Amazon Moments

Amazon ventured into the B2C mobile rewards sphere in 2019 with a new program called Amazon Moments, an intuitive, cross-platform applications programming interface (API).

With a Moments marketing campaign, companies set desired actions for consumers to perform that generate specific rewards. Amazon then tracks user engagement and completed actions, and automatically fulfills the rewards. Business partners pay a cost per action (CPA) fee.

Sprint partnered with Amazon Moments for a five-week campaign during the 2019 Concacaf Gold Cup. Customers downloaded the Fútbol Mode Rewards Wallet Pass to complete challenges during each of the five stages of the tournament and accumulated Amazon credits that could be redeemed for over 500,000 choice items. Additional points could be earned by referring friends to the app and uploading videos of themselves engaging with Sprint. Rewards included TAG Heuer watches, Samsung electronics, and Nike soccer gear. 

Throughout the different stages of the campaign, Sprint saw:

  • A 3x increase in engagement
  • 74% challenge completion and reward redemption rate 
  • 26K influx in website visitors

Whether instant or earned, rewards make customers feel valued and reinforce positive brand associations. However, rewards aren’t the only reason shoppers gravitate toward loyalty apps. A well-orchestrated program personalizes the shopping experience, makes thoughtful product recommendations, and reduces the amount of irrelevant advertising. It will also provide pertinent data that allows brands to track previous purchases, analyze purchase context, and tailor future product attributes based on customer feedback—all of which are effective tactics in building brand equity and driving future loyalty. Brands and retailers can develop their own loyalty apps in-house, rely upon a partnership with an existing third-party shopping app, or strategically make use of a combination of the two. Omnichannel shopping is a key marketing tool that is critical to long-term success in the retail marketplace. 

Partner with Shopkick to create an effective customer loyalty rewards program that will deliver an increase in brand awareness and ROI, as well as long-term trust and brand affinity. Read how leading brands like Claritin, Tyson, and Purina benefitted from a partnership with Shopkick or get started on your very own campaign by contacting us today!