Five of the Best Loyalty Programs and Why They are a Success

Date Published
06/15/2020
Author
Hannah Smith

It’s no secret that loyalty programs were born in a retail environment. The idea was to create repeat customers by offering incentives for purchases made. The more engaged you are with the brand, the more reward. This same principle applies to nonprofit loyalty. The key difference though, is the motivation behind the support. I might buy my coffee from the same shop each week because I like to support local, and of course it doesn’t hurt that I get a neat little punch in my paper card for each cold brew I buy. Twenty punches later and I’ve scored myself a free beverage. But, this is no comparison to the money and heart I put into supporting my favorite nonprofit organizations. Throw in an incentive and that organization has just gotten my attention and held it.

While Nonprofit and retail loyalty programs often have many noticeable differences, I want to examine some of the best loyalty programs out there and what makes them work. These programs vary from points systems, to punch cards, to paid programs. Here we break down five of the most successful and noteworthy:

  1. Marriott
    The Marriott Bonvoy program is one of the largest hotel rewards programs in the world and encompasses 30 brands. With this program, there are five levels of status: Silver, Gold, Platinum, Titanium and Ambassador. Each level is achieved by racking up your number of stays, and comes with various rewards like high speed wifi, late checkout, and premium room selections. It’s free to join and those points can be redeemed for future stays.

    This program is easy, which makes it appealing for travelers  and offers a ton of potential for earning points.

  2. Barnes and Noble
    For $25 a year, Barnes and Noble members can get 40% off on hardcover bestsellers, 10% off in-store purchases, and free express shipping on all online purchases.

    This model of loyalty program is a great example of how a paid membership can keep consumers making return trips. Barnes and Noble hooks booklovers by showing them that the benefits and savings greatly outweigh the annual cost, using language like “for $25 a year, receive $60 worth of coupons just for joining.”

  3. Starbucks
    Remember that punch card we talked about? Forget it when it comes to Starbucks Rewards. Customers must download and pay with the app to earn rewards or “Stars” in this case. Stars can be used towards future purchases and simply being a rewards member can score you extras like free refills and a birthday treat. 

    The big takeaway for the Starbucks Rewards? The ability to capture data on customer behaviors and preferences. Because members need to download and use an app in order to accumulate rewards, they’re able to secure data to make this program relevant and personal.

  4. Sephora
    Sephora’s Beauty Insider rewards program is hugely popular and has more than 20 million members. They use a points system to reward members, one point for every dollar spend. It is a three-tiered program, where members are eligible for a different selection of rewards and incentives at each tier.

    This provides incentive for more spending, to attain better deals. Another admirable thing about Sephora’s program is how personalized it is, allowing for members to not only receive discounts, but also more exclusive things like limited edition products or in-store beauty tutorials.

  5. Amazon
    Amazon has plenty of competition in the online shopping market, but the secret weapon for Amazon is their loyalty program, better known as Amazon Prime. Prime doesn’t work on a points system, redemption options or tiers, and it costs members $119 a year, and yet, it has a renewal rate of over 90%.

    Prime customers spend four times the amount of regular Amazon users because they convince users to purchase through Amazon exclusively. By eliminating shipping costs for members, Prime has tapped into the instant gratification that people seek these days.

While these models may not relate directly to your Nonprofit’s vision when it comes to loyalty and incentives, the principles and strategies outlined here are meant to demonstrate the value of various programs across the retail landscape. Any way you slice it, your donors will be grateful for recognition of their loyalty- whether it comes with a free cold brew or not. 

About the Author:
Hannah Smith
Group Director, Client Services, Loyalty & Incentives

As the primary contact for our 100+ clients in the Loyalty and Incentives division, Hannah is essentially “the face” of MemberCard and the go-to for questions, comments and ideas. In an account management role like hers, it’s important to not only have a good handle on industry trends and concepts, but it is equally important to get to know all clients on a personal level.

What excites you about your work at AFG?

It’s a great opportunity to meet all sorts of people, as our clients are across the country! I love the interaction and getting to know each of them.

If you weren’t at AFG, what would you be doing?

I wanted to be a mermaid growing up, so maybe working at Atlantis Resort.

What are your hobbies/interests outside of AFG?

I enjoy cooking, reading, watching reality tv, exploring my new city of Providence, and am working on marathon number three!

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