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Loyalty Programs Are Effective For Brands And Popular With Audiences

August 30, 2019 Sarah Cavill

The internet makes it possible to shop anywhere, anytime. The upside of this is obvious for consumers, but for brands maintaining consumer awareness and retention can be difficult when there are so many options available. According to research by Invesp, a conversion optimization blog, 61% of retailers cite customer retention as one of their most concerning obstacles. Fortunately, there are strategies to create a consistent and repeat customer base, including loyalty and rewards programs.

Rewards And Loyalty Programs Work For Consumers And Brands

An integral part of implementing a rewards program is choosing the right one for your brand. Consumers rely on different brands for different needs, which requires the right loyalty program approach. From tiered options to points, 69% of customers say they’re more influenced to choose a specific retailer when earning rewards is possible.

Tiered Programs, Gamification And UGC Make Rewards Programs Fun And Keep Customers Engaged

E.l.f and Tarte cosmetics are two beauty brands creating devoted fan followings with clever mobile-optimized rewards programs. E.l.f’s loyalty program employs some of the fun of gamification to encourage users to reach higher member levels and get more perks. “Glow Getter,” “Rising Star” and “A-Lister” are the tiers “E.l.f Beauty Squad” members can reach with every purchase. The rewards get better the more users spend, including 25% off products, and, of particular excitement to make-up aficionados, early access to new items. By creating a very desirable level to reach, E.l.f.’s loyalty program intrinsically encourages consumers to keep coming back.

Tarte’s “tartlettes” employ user generated content (UGC) to earn more points in the beauty brand’s Tarte Rewards program. Members can earn points by shopping, with different products earning different amounts of points, but members can also rack ‘em up by connecting with the brand on social, inviting friends to shop, completing beauty profiles or opening Tarte emails. These point-earners are fun and easy for users, and a great way for Tarte to get first party data, which can be useful for future customizations and scaling revenue.

"These engagement rewards are excellent examples of rewarding members for keeping the brand top of mind, exhibiting behaviors that are beneficial to Tarte, and expanding the company's organic reach," said Kim Courvoisier, Head of Content Marketing at Thanx,  a customer engagement platform. 

Other beauty brands known for their effective loyalty programs are Sephora, Pixi and Birchbox.

App-Based Rewards Programs Offer Seamless Interactions Encouraging Customer Loyalty

The Starbucks Rewards program is an industry leader, not only because Starbucks is a $6 billion business, but because app usage is a driving force behind the seamless access consumers have to their rewards. By creating a loyalty program that works across brick-and-mortar and mobile, Starbucks encourages enrollment in the rewards program and maximizes consumers' overall satisfaction. Personalization, like birthday treats and customized experiences, are more easily accessed with in-app reward programs.

The Starbucks Rewards app allows users to skip the line with mobile-ordering, access drink specials, easily see their rewards and, of course, make frictionless payments at point of sale — these perks inspire brand loyalty. The points earned are purchase-based and the April update allowed for more frequent cash outs. “With respect to driving digital relationships, we are pleased with the continued momentum of our Starbucks Rewards program,” said Starbucks CEO Kevin Johnson “In the second quarter, we expanded our active member base by half a million customers, a 13% increase that takes active Rewards membership to 16.8 million.” 

Other brands effectively using app-based rewards programs include Chick-fil-A and Dunkin Donuts.

By effectively deploying loyalty programs, brands are telling consumers they value their business. Ideally, a robust rewards program also offers openings for first-party data opt-ins creating opportunities for brands to continue evolving customer relationships.

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About the Author

Sarah Cavill

With more than 20 years of writing, editing and reporting experience, Sarah Cavill brings to Digital Media Solutions (DMS) a fine-tuned and diverse set of skills. Her work has been featured in notable publications including The Daily Muse, CBS Local, Techlicious and Glamour magazine. Sarah has a passion for current events and the deep-dive research that goes into the content development and brand identity of DMS Insights. In her role as Associate Content Manager, Sarah contributes to the pitching, researching and writing of multiple stories published each week surrounding digital and performance marketing innovations in pop culture, news, social media, branding and advertising.

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