In today’s fast-paced business world, keeping loyal customers is super important. With lots of competition and high customer expectations, having a great loyalty program can really make a big difference for your brand.
In this article, we’ll see how famous brands have used loyalty programs to achieve all sorts of business goals.
You’ll discover how different brands use loyalty programs to get new customers, get existing customers to start buying, make each purchase worth more, get customers to buy more often, get customers to buy more stuff in one go, understand customers better, sell more of different products, make more money from each sale, sell products faster, and learn what customers think about products and get valuable insights.
How popular brands use loyalty programs?
Professionally designed loyalty programs are strategic tools for renowned brands to achieve their business goals with precision and finesse. These carefully crafted programs go beyond retaining existing customers; they’re sophisticated instruments for attracting new clients while nurturing long-lasting and profitable relationships.
Let’s delve into various case studies to see how brands achieve different business results with their loyalty programs.
#1 Customer Acquisition
Customer acquisition is becoming increasingly costly due to rising marketing expenses and competition. Loyalty programs, like Airbnb’s referral program, offer an effective alternative for acquiring new customers.
Airbnb, a well-known online marketplace for short-term lodging accommodations, acts as a bridge between hosts and travelers, facilitating seamless transactions and reservations.
Research from Wharton’s School of Business indicates that customers referred to a brand are 18% more likely to remain loyal over time. Additionally, a study by Nielsen found that an impressive 92% of customers are willing to try a recommendation from someone they trust.
Airbnb’s referral program provides a perfect illustration of this phenomenon. By offering $25 off the first booking to referred members, Airbnb saw a remarkable 25% increase in new bookings in certain markets.
#2 Customer Activation
Customer activation is a key goal achievable through loyalty programs. A standout example of this strategy in action comes from Starbucks.
As a globally renowned coffeehouse chain, Starbucks offers a wide array of specialty coffee beverages, snacks, and more across thousands of locations worldwide. Its reputation as a leader in the coffee and café sector is undeniable.
To activate their customers, Starbucks introduced their rewards app, allowing members to conveniently place orders and earn rewards right from their smartphones. As part of their strategy to boost engagement and drive repeat purchases, the app sends push notifications with enticing promotional offers to users, encouraging them to keep coming back for more.
#3 Improved customer segmentation
Improved customer segmentation is a key aspect of effective marketing strategy, involving the division of a company’s customer base into distinct groups based on shared characteristics, behaviors, or preferences. This segmentation allows businesses to better understand and target different customer groups with tailored marketing efforts, products, and services.
Through customer segmentation, businesses can not only divide clients into tiers and offer rewards but also track their progression within these tiers, providing valuable insights for refining marketing strategies. A notable example of this approach is observed with Swarovski Club and Swarovski Crystal Society.
Unlike many brands, Swarovski offers multiple loyalty programs, including the Swarovski Club (comprising free and paid tiers) and the Swarovski Crystal Society (with an annual fee). These programs eschew points-based rewards in favor of discounts and vouchers based on spending goals upon sign-up.
By joining these programs, members gain access to exclusive rewards unavailable to non-members. The clubs maintain an air of exclusivity, enticing members with special benefits such as exclusive gifts and discounts, in exchange for their willingness to pay extra for membership.
#4 Increasing transaction value
Loyalty programs play a crucial role in boosting transaction value by encouraging customers to spend more with each purchase. Brands often use tiered rewards or special promotions to incentivize higher-value transactions, motivating customers to upgrade their purchases. Best Buy’s loyalty program is a prime example of this strategy in action.
Best Buy, a global retail giant renowned for its wide selection of consumer electronics, has a strong presence both in physical stores and online. To increase transaction value, brands like Best Buy may encourage customers to buy additional products to earn discounts or other rewards. Since implementing their loyalty program, Best Buy has achieved impressive results:
- Loyalty program members generate 12-18% more revenue compared to non-members.
- On average, loyalty program members spend $300-$390 more annually than non-members.
- Best Buy sees $90 million in incremental revenue per year from 1 million My Best Buy members.
Successful loyalty programs create a strong bond between customers and businesses by offering rewards, discounts, or exclusive perks. This fosters customer retention, ensuring a steady stream of transactions over time as loyal customers continue to make purchases and engage with the brand.
#5 Boost Cross-selling
In addition to fostering customer loyalty, loyalty programs can also be instrumental in accelerating cross-selling efforts. Cross-selling entails offering customers complementary or additional products or services to what they originally intended to purchase. A prime example of successful cross-selling can be observed through the Marriott Bonvoy loyalty program, implemented by Marriott International.
As one of the largest and most renowned multinational hospitality companies globally, Marriott International operates a vast network of hotels, resorts, and lodging facilities under various brands worldwide. Within the framework of the Marriott Bonvoy program, cross-selling involves promoting additional products, services, or experiences to program members beyond their initial hotel bookings.
Since the introduction of Marriott Bonvoy, Marriott International has achieved remarkable outcomes, including:
- A 66% increase in program members making specific purchasing decisions to maximize program benefits.
- Growth in members motivated to book additional stays to reach the next loyalty tier and unlock associated benefits, resulting in increased spending.
Wrapping Up
As loyalty programs continue to play a pivotal role in achieving various business objectives, it’s essential to highlight the significance of leveraging the right tools and platforms. Among the plethora of options available, one standout loyalty app that deserves recognition is GAWAPP.
GAWAPP stands out as an exemplary loyalty app, offering robust features and functionalities designed to elevate customer engagement, retention, and overall satisfaction. With its user-friendly interface and customizable options, GAWAPP empowers businesses to create tailored loyalty programs that resonate with their target audience.
So, level up your loyalty game with GAWAPP!
