3 Outstanding Customer Loyalty Programs & What You Can Learn From Them

Best Practices

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29 Jan

2021

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Introduction

Loyalty.

It’s a small word with a lot of weight to its meaning.

But when juxtaposed against the eCommerce marketing world and your customers, loyalty takes on a different but still vital connotation.

The importance of having a loyal customer base comes down to one, ever-important thing that can make or break a business:

Customer retention.

Keeping a loyal customer base filled with repeat buyers has always been the name of the game in business. Repeat buyers cost 5X less than gaining new customers, and they spend 67% more in their overall lifetime value (LTV.)

There are a lot of tactics for turning people into repeat buyers. But there’s one thing that the big shots like Starbucks, Amazon, and Sephora, to name a few; all do to keep customers coming back.

It’s a customer loyalty program designed to increase customer retention and LTV for your eCommerce store.

There are many examples of brands, like the ones mentioned above, that are successfully executing a customer loyalty brand.

Today, we’re going to cover a few of those examples.

In this article, you will learn:

Three effective customer loyalty program examples
Why these programs are effective in increasing customer retention
Tips for implementing these strategies into your loyalty program

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3 Effective Customer Loyalty Program Examples You Can Learn From

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1. REI Co-Op

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REI has been around since 1938, and they’ve always had a way of doing things they’re way. Since their beginning, they’ve been a co-op with both feet firmly planted in everything that is that #outdoorlife.

True to their nature, they have a customer reward program but with a unique flair.

You see, REI is a member-owned co-operative that anyone can buy into, but it also plays the part of their rewards program.

The way it works is that for $20, you can become a lifetime member. Once you’re a member, you can access various perks like member-only deals and 10% back based on your purchases as part of your membership dividend.

Their efforts in customer loyalty and rewards have paid off in a big way. In 2018, REI added more than a million new members to their co-op, which helped them grow 6%. It may not sound like a huge increase, but they made a record $2.78 billion that year.

As you peel back the layers of their membership, you can find some hidden gems and insights.

What REI’s Rewards Program Does Well

One of the unique factors of REI’s customer loyalty program is the outdoor community.

They offer various classes, events, and member specific emails around these things to help connect you to outdoor enthusiasts like yourself.

Want to go snowshoeing with other people? You can sign up for that. Want to go rock climbing but don’t want to do it alone? There’s a group for that.

Their emails around member-exclusive are often personalized to your location and interests, making them highly appealing for the outdoor lover.

While not every event is exclusive to members, many things are and are often discounted.

Speaking of discounts, REI members are sure to get more than their fair share of offers and discounts.

And the best part?

Many offers are for members only.

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Everyone loves to feel like they’ve got an in with the “in-crowd,” and REI nails the inclusivity aspect that many brands tend to overlook.

Takeaways from REI’s Customer Rewards Program

If your brand is built around a common and shared passion, dig into your community. People like to connect with like-minded people who share similar passions and interests. If a large part of your audience shares an interest as a common thread, see if there’s a way you can use that to your advantage as part of them becoming a member of your rewards program.
If you’re going to offer member-only deals, make sure they are. Many brands say they’ll offer member-only discounts and send the same offer to everyone on their list. Sure, that’s easier than going the first route, but it’s disingenuous and eventually starts to work against you at one point or another. Members like to feel like they’re getting something special for being a loyal customer and being shown that gratitude.
Consider a landing page for your customer loyalty program. REI has a great landing page that highlights all the benefits of being a member, which is a great idea because it gives you one hub to link your marketing and social media promotions.

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2. PetSmart

Like many long time retailers, PetSmart didn’t start out being an online store. But as time changed, they jumped into the eCommerce world and haven’t looked back since.

As part of their on-going customer retention strategy, they added a rewards program to their marketing efforts, which got a nice update in 2018 as PetSmart Treats that streamlined a better omnichannel experience by including a mobile-centric design for their online store and a smartphone app.

What PetSmart’s Customer Loyalty Program Does Well

Every rewards program should come with its very own welcome series, and PetSmart answers the call.

After the initial sign up to the program, they send this welcome email saying thank you and a list of the benefits of their type of program.

Getting people to sign up for a membership is one thing, but getting them to fill it out with more information is just as important.

For PetSmart, that other information includes things like your animal’s birthday, the type of animal you have, where you live, and so on. Collecting this extra information allows you to create more personalized emails that are important for bringing customers back for more.

But filling that out can take more time than people want to give, which is why they incentivized taking that action step.

In the email above, you can see that they offer extra points towards rewards if someone takes the time to fill out the profile.

It’s a subtle but essential step to make sure they get the most of their member sign-ups.

Their emails for member-only exclusive deals do well in the branding department and do an excellent job of letting customers know when the promotion is valid, and offers easy ways to sign in to take advantage of the offers.

Takeaways from PetSmart’s Customer Loyalty Program

Have a separate welcome email series for your rewards program. If and when you decide to add a customer rewards program to your online store, you should make sure to have one welcome series for non-rewards members and one for those who become rewards members. After all, you’re welcoming them to different things, and each funnel will have different goals, so it’s good to start planning this out before launching a loyalty program.
Fill in the gaps in your signup process. People are usually quick to jump into a free rewards program, but if they don’t give enough data for you to work with, it will hinder your efforts to provide them with a great, personalized experience. So if you’re offering a simple sign-up process, make the effort to fill in the gap the way PetSmart does and ask for a bit more info. In return, incentivize that ask and test various offers to see which one works the best.

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3. Chipotle

With Chipotle Mexican Grill, you either love the food, or ya hate it. But no matter which side of the fence you’re on, there’s no denying that they’ve designed one heck of a rewards program.

It may seem strange to have a restaurant listed as an example for eCommerce brands to look at, but really, their setup isn’t all that different from a store like Target, TOMS, or even your brand.

With features like Online Order and an omnichannel focus that includes a smartphone app with fast ordering and pick-up options, Chipotle has made online commerce work to their advantage.

If you haven’t already, let’s explore 5 Ways Data Feed Management Unlocks Omnichannel Success.

What Chipotle’s Customer Loyalty Program Does Well

True to its brand, Chipotle adds a flare of fun and likeability to their copy and design. That all carries through in their customer rewards program too.

The email above throws out a fun “Cha-ching” when a rewards member earns more rewards due to a recent purchase. It’s fun, and it catches the eye.

Speaking of rewards, sending an email like this is a great way to remind members that their purchases stack up to their benefit, which is pretty gratifying.

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Just like Starbucks Rewards will give a free drink on someone’s birthday, Chipotle will give a free menu item to someone who enters that info into their profile. Sending that sort of offer is a great way to boost the customer experience and make customers feel all warm and fuzzy inside. Check out this article to learn more about Starbucks' email marketing campaign and how they use it to gain customer loyalty.

Takeaways from Chipotle’s Customer Loyalty Program

Send emails about how their purchase grows their rewards. It’s a pretty unique feature that Chipotle has as part of its rewards program. It’s smart because it reminds people that, “oh yeah, if I go there again, I can earn free food!”, from there, they likely plan on future purchases. You can set up and automate these types of emails for your rewards programs.
Don’t ignore the ability to make people feel valued and appreciated. Birthday emails are one standout way that Chipotle does this for their VIP members. It’s nice to have someone you didn’t expect to remember your birthday, and there’s something endearing about it. If you can trigger that sort of endearment in the hearts of your customers, you’re walking a path of gold. So when building a loyalty program, consider adding triggered emails like these.

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Start Getting Repeat Purchases from Customers with Your Loyalty Programs

Making the jump to having a rewards program can feel daunting, but many third-party options can integrate with your desired store platform and your ESP.

Getting it started and launched is better than having another day pass without one, so don’t let the options paralyze you. Pick something that seems like the best option for you today and up to a year from now, then go for it.

Building good customer relationships is an essential part of eCommerce marketing. A good loyalty program meshed with automated emails is a great way to continually strengthen customer relations and start working your way towards future purchases from them.

If you’re looking for an email marketing platform that can help get you there, click here to give Sendlane a try for Free for 60 days. ‍

Written by

Caitlin Hutchinson

Head of Marketing

As someone consistently recognized for her talent in writing, storytelling, art, and technology, it’s not shocking that Caitlin realized her passion for marketing exceptionally early in her career. As the Sr. Director of Marketing, Caitlin leads, develops, and accelerates Sendlane’s strategy and brand recognition. Known as Sendlane’s “Brand Warrior'', Caitlin is credited for the bold, disruptive, and innovative branding behind the pink envelope. Joining Sendlane as the 6th employee and the 1st marketing hire, Caitlin has since worked diligently alongside the CEO to nurture the department into the high-performing and creative powerhouse it is today.

@caitlinkhutch