Simply put, customer loyalty is a customer’s commitment to your brand. A loyal customer will always choose your brand over the others not only because of excellent customer service or unbeatable product selection but also owing to the emotional connection they have with your brand. Now, how you create this point of differentiation and achieve this connection is the key.
Many companies have loyalty programs- membership programs that grant customers exclusive benefits for purchase or other actions. At the core of any loyalty program lies the earn and burn aspect where customers get rewarded for every dollar spent.
Now you would wonder what sort of exclusivity a tiered loyalty program brings to the table. A tiered loyalty program goes a step further and offers increasingly lucrative benefits at higher levels of spending, brand engagement or a combination of the two. It not only gives the customer preferential treatment based on the tier they are at but also serves as an incentive to continue spending and remain loyal to the brand.
In this article we will look at various ways through which one can create brand loyalty using a tiered reward program.
1. Create Distinction: Every tier should have value with rewards that are unique and that align with the customers’ needs. However, there should also be a clear distinction between tiers. For example, a brand can offer points for money spent at every level, but only the top-tier customers often have access to certain special services such as private beauty advisor hotlines, early-bird offers etc.
2. Brand Your Tiers: One of the other important things to keep in mind is to appropriately brand the different levels of tiers that you create. One of the most successful loyalty program examples is that of Lancome, where customers move up the levels from Rose Gold, Gold, or Platinum — members can receive early access to products, a ShopRunner™ membership, and invitations to Lancôme parties and events.
3. Experiential Rewards: More often than not, a memorable experience has a more profound impact on the customer as opposed to a coupon or a percentage off on their next purchase. Including experiential rewards and embedding them into different tiers gives the customer a reason to try elevating to the next level. Experiential rewards can build loyalty, while the prospect of receiving them can encourage customers to work toward higher tiers. Experiential rewards could include free movie tickets for two, invites to product launches and other private, exclusive events etc.
4. Gamify the experience: Everyone loves games and competition and the brands can utilize these dopamine driven activities to not only engage the customers but also provide them points on such interaction based activities. This will get your customers interacting with your brand more frequently and understand the mechanisms they need to undertake to upgrade to the next tier.
5. Promote your Loyalty Program: Once you’ve launched your customer loyalty program, make sure you are constantly promoting it, making the customers aware of the benefits of joining it and upgrading to the higher tiers. Ways to do this include promoting the program on social media channels and adding on-site push notifications when customers complete an activity that earns them points.
6. Diversify your Reward Structure: Discounts shouldn’t be the only way you are rewarding your customers. Go beyond this and reward those who spend at a certain threshold or more and earn enough loyalty points differently. For instance, free tickets to events and entertainment, free subscriptions to additional products and services, or even giving them options to select from a couple of alternatives.
7. Tap into the “why”: Try to create a deeper meaning for your tiered loyalty programs and dwell into the “why” behind your product or service to make your customer loyalty program as compelling as possible. The right example would be Briogeo. The customer needs to answer a quiz and based on that, have a shampoo and conditioner crafted just for their hair on their doorstep. Its rewards program is just as customer-centric as its product where for every dollar spent, the customer earns three points toward a savings discount on their next purchase. In this way, customers know that there is a deeper meaning to their loyalty program which brings them closer to affordable haircare.
8. Make your program easily accessible: It is only normal for the customer to have questions around your loyalty program and you should strive your best to answer them. The program should be easily accessible and convenient to the customers. Customers should be made aware as to how it works, how they can earn points, and how the benefits will be applied.
9. Create personalized offers: Offers that are customized and targeted appeal to the customers the most. Therefore, it is imperative for brands to make sure that they maximize engagement and conversions by tailoring a customer’s experience based on their past purchases and other data.
10. Using the right technology: Last but not the least, is using the right technology to implement a tier based loyalty program. As a brand, you should look for a program that provides deep insights into what drives customer decision-making, customer behaviors and gives your brand a competitive edge.
The best loyalty programs create win-win opportunities for customers and brands alike. With a tiered program, brands have better opportunities to increase loyalty, engagement and spending with customers who have already proved themselves to be loyal customers and are willing to spend substantial amounts. These tiered loyalty programs not only drive engagement but also retention among the most desirable customers and is something that the brands should start adopting more vigorously.
To create a tiered loyalty program for your brand, reach out to growth@unifynd.com
