Eight Industries Where Loyalty Programs Are Extremely Effective
June 21, 2018
Although there might always be a handful of people who are skeptical of the effectiveness of loyalty rewards, I can confidently tell you that loyalty programs can be effective in every industry. To prove it, I’ve made a master list of eight of the biggest eCommerce industries — a list that not only tells you why rewards work but also gives you examples of brands that have found great success with rewards.
Ready to change your way of thinking? Let’s see what makes loyalty programs so successful in eCommerce.
With changing seasons and ever-evolving trends, apparel brands are releasing new products every 3 months or so. Loyalty programs give your brand the edge it needs to bring customers back to your store first to explore new seasonal products.
With rewards like free shipping or order discounts, customers are encouraged to shop with you instead of checking out a competitor, keeping that high customer lifetime value invested in your business.
The fashion industry is also extremely visual. Platforms like Instagram and YouTube have made closet walkthroughs and lookbooks an extremely popular way to explore new products and brands. Rewarding customers for engaging on social media can make your products feel more valuable than they would otherwise, encouraging shoppers to return in the future.
Example: Cents of Style
Cents of Style rewards their most valuable customers for making purchases, engaging on social media, and referring friends to their store. These program features ensure their customers keep their closets full and engagement high all year round.
Much like the fashion industry, jewelry is incredibly visual. Not only are the products absolutely beautiful, but there’s also a certain sense of elegance and luxury associated with sharing a recent jewelry purchase with others. Customers are always eager to show off their jewelry to their networks, increasing their engagement on Facebook and Instagram.
With this much enthusiasm built into the social experience, a loyalty program is an easy way to create more brand touchpoints and engagement opportunities. When customers know they’ll be rewarded for sharing their jewelry online, they’ll be more likely to make more purchases in an effort to not only early more valuable rewards but also experience that adrenaline rush that only receiving more likes can give.
Introducing a VIP program helps establish the value of not only your products but also your entire brand. Offering exclusive perks to your best customers will elevate the way they feel about your brand as a whole and bring that valuable business back to your store time and time again.
With three equally fabulous VIP tiers, Kristalize Jewelry’s loyalty program makes every customer feel like a member of an elite club. This structure creates a positive experience that pushes customers to earn more points in order to earn the honor of being called Glamorous.
3. eCigs & Vapes
e-Cigarettes and vaping are one of the industries with the highest purchase frequencies. Since customers use the products multiple times a day they tend to run through refills semi-regularly, opening huge opportunities for repeat purchases. Combine that with other peripheral products available and customers need to be making repeat purchases regularly.
This industry is also prone to referrals. For anyone just getting started with eCigs, it can be intimidating to know which brand to shop with or how to start choosing the types of products you need.
Since referrals are the most trusted form of advertising, rewarding customers for making them would ensure that your existing customers are always helping you bring in new ones. These rewards are extremely valuable for new customers looking to explore your industry without spending too much money and make your brand way more appealing than any of your other dime-a-dozen competitors.
Smokea has made their Smokea Rewards program a key part of their customer experience that endears shoppers to their brand. By cleverly naming their rewards currency “tokins,” they’ve seamlessly integrated their program into the rest of their store and made it a natural extension of their overall brand experience.
Cosmetics is one of the most community-based industries. From makeup tutorials to product unboxings, cosmetics customers get a lot of joy and value from knowing what others use and enjoy. That means there’s a very high likelihood of them sharing their experiences with their friends and creating a buzz around your brand.
When you combine these tendencies with the positive power makeup has to transform the way they feel about themselves, you get the perfect environment for building a thriving loyalty program. With VIP tiers and customer referrals, you can harness the social power of your cosmetics community and get your most loyal customers excited about building relationships with your brand and prospective customers. Rewarding for reviews can also play into this strategy, giving new customers further proof that your products are the best ones available.
These loyalty features help build a strong brand community that’s built on your customers’ genuine feelings for your brand. These positive associations will not only turn your store into their favorite brand but also have them coming back to replace their makeup supplies more regularly, increasing every customer’s lifetime value.
Example: e.l.f. Cosmetics
By offering “pretty perks for every point you earn,” e.l.f.’s Beauty Squad rewards program uses its three luxurious tiers to create lasting relationships with their faithful customers. They’ve also done an incredible job of branding the experience from top to bottom, ensuring that their program looks as good as their products.
5. Food and Beverage
While food and beverage are definitely one of the less conventional eCommerce industries, it just so happens to be one of the most effective for running a loyalty program. That’s because this industry puts the most emphasis on customer experience. From the way the products look to how they’re packaged when they arrive, nothing is left to chance, and these little details help customers feel good about their decision to purchase food online.
Loyalty programs operate in a similar way. By offering customers rewards for making a purchase, a program treats them to something a little extra they couldn’t get otherwise. This increases their comfort with shopping at your store and improves the odds of them shopping with you again. Since many food and beverage products are sold at a lower price-point, these small wins can turn into huge dividends whenever customers choose to replenish their supply with your brand.
Drinkfinity chose to focus on generating more customer referrals with their rewards program. Their beautiful explainer page makes the process easy to understand and sets their members up to make more referrals in the future.
The biggest reason subscription boxes are so popular is their convenience. Customers are always looking for ways to make shopping easier, and subscription services do just that. This means that customers who like your subscription product or service are more likely to stick with you after making their first purchase, but the trick is getting that first purchase.
When you offer a loyalty program, you’re able to pack even more value into the first subscription box your customer receives. Now, instead of simply getting their box customers are also being treated to discounts and experiences that aren’t offered by another service. These perks act as differentiators that entice customers to try your brand the first time, and once they’re hooked they’re yours for life.
You can ramp up this process with social engagement rewards. Subscription boxes inspired the unboxing video trend and have prompted many people to share their latest haul through photos and status updates. Rewards encourage these ongoing behaviors and improve the chances of your store acquiring new traffic in the process. The more people your customers reach with their posts, the more traffic you’ll get.
With their Stash Points loyalty program, Knitcrate makes their subscription service even more valuable by rewarding customers for a number of different actions including referrals, purchases, and reviews.
Electronics is another industry that causes a lot of debate around whether loyalty programs can work in any industry. The reality is that electronics brands are very well set up to succeed with loyalty programs.
For one thing, customers have extremely high lifetime values. Tech shoppers are always looking for the newest thing, and are constantly reading customer reviews to figure out what they’re going to buy next. Rewarding for customer reviews will encourage more customers to share their opinions online, which will ease the fears new customers might have. With those hesitations out of the way, new customers will quickly become repeat purchasers that are actively engaged in your brand.
This passion for new technology also means they’re happy to buy more peripheral products that amplify their experience with big-ticket items. Offering points and rewards for each additional purchase increases the likelihood that they’ll actually try all of the other products you have to offer, increase your store’s purchase frequency and repeat purchase rate.
SUBPAC puts the emphasis on value with their SUBPAC points program that rewards customers with free products and gift cards that amplify their brand experience.
Like food and beverage products, supplements are a key component of many customers’ lifestyles. As a part of their daily routines, customers need to replace them quite often, giving them an extremely high purchase frequency.
Supplements customers are also always looking for the most bang for their buck, which means average order values are quite high. Customers are happy to add more products to their cart if it means they get the best value, which puts you in a fantastic position to secure their loyalty with a rewards program.. Given the opportunity to try new products, your customers will jump at the chance to join and engage with your program on an ongoing basis.
In an industry that’s intensely competitive, a loyalty program sets you apart from other brands selling similar products. By leveraging your house products and branded swag as rewards, you’re able to create a unique brand experience for customers that translate into long-lasting emotional relationships.
Example: RSP Nutrition
RSP Nutrition takes advantage of their amazing products by using them as premium swag in their rewards program. By highlighting these rewards on their explainer page, they make the value of their program easy to see and understand for both new and returning customers.
Don’t see your industry here?
The industries listed here are only eight where the team at Smile.io have seen rewards be most effective. No matter what you sell, rewards are a highly effective tool to motivate customers to engage and build relationships with your brand. Rewarding them for everyday actions like referrals and recognizing their engagement with VIP tiers keeps your brand experience interactive, exciting, and motivating for all types of customers.
About the Author:
Kirsten Burkard is a Marketing Specialist and lead editor of the Smile.io blog. She’s passionate about books, bows and anything Disney.
Source: Eight Industries Where Loyalty Programs Are Extremely Effective