Great companies know that great rewards programs grow sales and foster customer loyalty. It’s hard to find a successful brand that doesn’t have an excellent rewards program that keeps profitable customers coming back (and increasing the frequency at which they come back). The world’s best companies know that making customers feel appreciated with rewards is one of the most profitable and inexpensive programs they can offer.
From cashback, additional services, or “store credit,”, here are seven companies that have created impressive (and ROI-driving) customer reward programs.
The Gap
Offering a program to credit card and non-credit cardholders, The Gap grows its sales with an excellent in-store rewards program called Gap Good Rewards.
Regular members receive 2% back on purchases and credit card members get 5% back. These are pretty significant percentages!
Program points are automatically converted into discounts. The discounts are $5 at a time, so you receive a $5 coupon when you incur enough points. If you choose to continue saving up points, the coupons increase by $5 increments, and the points don’t expire so long as you make another purchase any time within two years. Having so much flexibility contributes to brand value and brand trust, which keeps GAP customers loyal and happy.
Gap Loyalty Program ROI
Since the relaunch of this program in 2020, GAP has enrolled more than 19 million new customers in under 12 months.
Sephora
Sephora is a beauty products retailer that brings in over 10 billion dollars annually. Part of their success? An incredible loyalty rewards program that rewards repeat purchases. Their Beauty Insider Program has more than 25 million members who make up 80% of their annual sales.
As Allegra Stanley, Sephora’s vice president and general manager of loyalty, shared with Forbes, “Research has found that almost 75% of what drives customer engagement and loyalty are emotional perks. Now more than ever customers, especially the younger generations, decide to engage with brands based on emotional loyalty drivers.” These emotional perks include feelings of surprise and delight and general happiness from engagement with a brand.
The Beauty Insider Program has three tiers: Insider, VIB, and Rogue. It’s free to be an Insider. You become a VIB after you’ve spent $350 and you become a Rogue member once you’ve spent $1000. You earn more rewards and benefits the higher tier you are.
Here are some of the perks that Sephora offers for their loyalty members:
- “Beauty Cash” – good for $10 off
- Seasonal savings events
- Free birthday gift
- Free shipping
- Free samples
- Exclusive access to events and meet & greets
- Exclusive early access to products
For companies like Sephora who want to encourage repeat purchases as well as trying new or different products, a loyalty program like this makes sense. Giving free samples or free products to your loyal customers allows them to try something new while also feeling incredibly valued.
Sephora Loyalty Program ROI
As of 2020, Beauty Insider had 25 million members. And while membership level details aren’t public, Stanley shared that significant sales and growth comes from Sephora’s top tier $1,000+ Rouge members.
Kohl’s
Kohl’s “Kohl’s Rewards” certainly wins for the value it offers customers. This rewards program offers a whopping 5% back for anyone, as long as they’ve signed up for the free loyalty program. One drawback is that Kohl’s only gives customers 30 days to spend their earned Kohl’s Cash. The customers have to use them right away which likely fuels a lot of repeat purchasing.
If you know a Kohl’s shopper, you know that they are dedicated to shopping at Kohl’s and likely shop there frequently. Even the 30-day cut-off probably doesn’t matter to them. Kohl’s Rewards has fostered brand value and incredibly loyal customers.
Criterion
If you haven’t heard of Criterion, no worries – it just means that you don’t spend your free time watching classic, foreign, or arthouse cinema. For the very niche audience it serves, however, Criterion is the best of the best and the films that it chooses to restore and offer definitive physical releases have a stamp of high quality. Criterion customers are incredibly loyal – not just because of their love of film, but also because of Criterion’s loyalty program.
What makes the Criterion loyalty program unique is that you have to sign up for the account to make any purchase. Everyone is a member and everyone starts earning points right away. For every dollar spent, you earn a point. And once you earn 500 points, you’ll receive a reward of a $50 credit. Earning 500 points – or spending $500 – may seem steep, but the loyal Criterion customers will definitely reach that level. A $50 credit is incredibly valuable to a Criterion loyalty member because that translates to a free movie or two. That delayed reward is more beneficial to this audience than $5 back every now and then.
REI Co-op
REI is known for the highest quality outdoor sporting equipment and for its rewards program. Customers pay $30 to become a lifetime REI Co-op member.
Members receive:
- 10% back on all purchases.
- Steeply discounted “garage sales”
- Discounts on adventure classes
- Free shipping for online orders
- Access to member-exclusive gear
- And more
REI is revered by its members and they’re fiercely loyal to the brand. This is an example of a company with an impeccable reputation and deeply loyal customers. The REI Co-op program is a paid rewards program that has been incredibly effective at building customer loyalty and creating brand value far beyond other retailers.
REI Loyalty Program ROI
REI’s Co-op boasts a whopping 20 million members, which it hopes to expand to 50 million by 2030.
Barnes and Noble
Like REI, Barnes and Noble Loyalty Members pay a fee to be a member. Unlike REI, the Barnes and Noble fee is annual – $25 for a year.
In return, members get:
- 40% off hardcover bestselling books in store
- Free shipping
- Early access to purchase books
- Special discounts
- Special birthday offers
Similar to Criterion, Barnes and Noble has a very dedicated customer base. These customers will be purchasing enough books that Barnes and Noble knows that it’s worth offering them these great discounts. And for the customers, a $25 annual fee more than pays off due to how many purchases they’re making – as well as the money they’re saving on shipping if they can’t find a book in-store.
Starbucks
Starbucks is likely more responsible for the growth of loyalty programs to prompt customer engagement than any other company. Starbucks was the first to launch rewards through an app which made using their program easy and efficient for customers. The Starbucks Rewards program has fostered a devout customer base, massively increased brand value, and continues to engage and delight customers.
Loyalty points are called “stars” in the program and customers must order or pay with the app. Like all rewards programs, a tremendous amount of data is acquired by Starbucks and they use every bit of it to grow the company. Some of the data tell them what locations customers frequent, what drinks are seasonal favorites, and which foods perform best for specific demographics. Each customer is assigned a lifetime value based on their habits, spending, buying, and how often they frequent Starbucks. Knowing all of this, Starbucks is empowered to offer new and more relevant perks.
Starbucks Loyalty Program ROI
As of October 2020, the Starbucks Rewards program had over 19.3 million members. At that time, their rewards program generated nearly 50% of their revenue. So we can only imagine just how profitable the program is now.
These are just seven brands that offer innovative and established rewards programs, but there are so many more that reward customer loyalty. If you know a member of any of these reward programs, ask them what they think about the company. They are likely devoted fans that spend far more than other customers. A Starbucks member will tell you their favorite daily drink. An REI member will tell you they won’t shop anywhere else for their outdoor needs. A GAP member will tell you the best basics to buy from the store.
Rewards programs provide crucial data, foster loyalty, grow brand value, and keep customers returning and spending more. Great stores and restaurants know the value of having customer loyalty programs and now it’s easier and more inexpensive to implement than ever. You don’t have to be the size of Starbucks or Barnes and Noble to have an incredible customer rewards program. If your company is considering the benefits of instituting a rewards program, get started with Juice Banking.
