10 Industries Where Loyalty Programs Are Extremely Effective
December 9, 2019
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The term “loyalty program” tends to inspire images of coffee shops, car washes and hair salons. It used to be that loyalty programs were a way for businesses like these to entice customers to come back again and again.
However, as the customer loyalty space has evolved into sophisticated digital platforms that allow businesses of all shapes and sizes to engage customers in a multitude of innovative ways, loyalty programs are no longer exclusively for the retail and hospitality sector.
In fact, they’re no longer exclusively for offering rewards and discounts, either. As you’ll discover in some of the industries we list below, recent digital loyalty trends have blown the lid off the ways in which a brand can motivate and incentivise specific behaviour.
At the core of it all is mobile-based loyalty apps.
Have you ever received an SMS right before lunch-time, offering you a half-price burger? How about a push notification reminding you to renew your contact lens prescription? Perhaps your favourite racing game app has informed you that you can purchase a special “$5 Black Friday” bundle to receive a brand new Ferrari to race…
Digital loyalty apps can even be used to incentivise people to study. Check out these 10 industries below, where any business can easily implement a digital loyalty app to further engage customers, clients or even their own employees.
Some are obvious, some are not so obvious…
1. Food & Beverage
Let’s start with the obvious. Since the classic “Buy 6, Get 1 Free”-style paper punch cards came about, they were instantly embraced by cafes, bars and restaurants across the world.
The system is simple for customers to follow, easy for businesses to implement, and effective in bringing people back time and time again.
The cost of giving customers every 7th coffee, or 10th burger, or 5th cocktail etc. free is outweighed by that customer’s ongoing loyalty and repeat business.
However, times are changing. People’s wallets are getting smaller – I mean literally. Wallet designs are smaller than they used to be! Many people don’t even carry a wallet anymore, opting for Google Pay or simply keeping their credit card in their smartphone case card holder.
Switching to a digital loyalty app doesn’t necessarily mean a more complicated loyalty program – plenty of businesses in the food and beverage industry use the Stamp Me loyalty app as a way to digitalise their loyalty program, while maintaining a simplistic “Buy X, Get Y” model.
Cosmetics is a booming industry, and because Gen Z and Millennial females make up a considerable portion of any cosmetics company’s customer base, it’s crucial that these brands stay on top of the latest consumer trends and shopping habits.
Perhaps this is why Sephora currently has one of the most sophisticated, innovative and successful digital loyalty apps out there. Rather than just offering rewards for regular purchases, Sephora has created a community out of its Beauty Insider program.
The program is divided into three separate tiers, from entry level up to the hard-core VIP’s who enjoy perks such as free custom makeovers, two-day shipping on all orders, a private hotline and exclusive events.
Sephora is also careful not to isolate brand new members, with immediate benefits including birthday rewards, free beauty classes and access to the Beauty Insider Community.
The cosmetics giant also manages to build hype around its loyalty app with clever features like allowing users to digitally apply makeup to their faces to see how it looks before they commit to a purchase; essentially creating camera filters for each new product Sephora releases.
Any cosmetics brand that isn’t adopting similar creative approaches to a personalised shopping experience from your very own pocket is destined to pale in comparison to brands like Sephora.
3. Supplements & Vitamins
Any product or service that customers regularly purchase on an ongoing basis – coffee, haircuts, car washes – is easily converted into a source for points accumulation and rewards redemption.
People who take their gym memberships seriously (and I’ll be the first to admit that’s not all of us) tend to work out routinely, maintain a strict diet, and complement their exercise and healthy eating habits with supplements and vitamins.
Of course it makes sense that a vitamins/supplements loyalty program would coincide perfectly with a gym membership subscription. This is something that a large portion of consumers consistently purchase for the long term, which makes the price tag even more important.
If the shop down the road sells the same supplements and vitamins for five dollars less, and a customer is purchasing this product every two weeks for five years, they save $650 by switching to the competitor.
However, you can counter this with a loyalty program that allows that same customer to redeem discounts on other groceries and household products due to the points they accumulate from their regular purchases of supplements and vitamins.
Despite paying $1 more for their supplements and vitamins, they’re saving much more on things like toiletries, for example.
4. Pharmaceutical Products
The same principle behind customer retention strategies for supplements and vitamins also applies for the pharmaceutical industry – consider medical prescriptions, for example.
Stamp Me Loyalty Solutions created a customised digital rewards platform for global eye care specialist Alcon, where customers who regularly purchase Alcon contact lenses and other eye care products are eligible for rewards.
Because Alcon products are sold through an intermediary like optometrists, medical clinics and pharmacies, Alcon had no direct communication with its customers before implementing a loyalty app.
By downloading the app, customers can renew prescriptions, claim rewards towards future purchases and communicate with Alcon directly from their very own pocket. This also allows Alcon to receive feedback from customers and improve the business as a result; something it didn’t have access to before.
Of course, retail and hospitality is typically where loyalty programs are most often embraced. From supermarkets and department stores, to fashion chains and musical instrument shops; any retailer without a loyalty program risks losing customers to its competitor down the street.
Whether it’s the old-school paper punch cards, a tablet installed at POS, fully integrated POS loyalty software or a digital loyalty app, a rewards program ensures that your customers feel important, valued, and rewarded for their ongoing repeat business.
Consumers have more options now than ever before, so it’s crucial that you give your existing customers a reason to come back time and time again. While paper punch cards and digital POS loyalty programs offer an incentive to Buy X in order to Get Y, digital loyalty apps are the ideal way to create a personalised shopping experience for each individual customer.
There’s an array of digital loyalty app providers out there that provide retailers of all shapes and sizes with the capabilities to offer customers tailored rewards, personalised product recommendations, targeted marketing direct to customers’ devices and countless other functions that were previously only in reach of the biggest-name brands in the industry.
The other industry that’s synonymous with loyalty programs alongside retail and hospitality, is the beauty industry. It’s rare to walk into a hairdresser, nail salon, beauty parlour or massage spa without immediately spotting a stack of punch cards at the reception desk, or some form of digital POS loyalty program.
However, much the same as in retail and hospitality, digital loyalty apps are changing the way the beauty industry engages customers too.
Rather than a generic “receive a discount off your sixth cut” model, a digital loyalty app allows beauty businesses to offer a customer a free wax when they come in for a manicure/pedicure this week, heavily discounted shampoo and conditioner when they get their hair cut on a Tuesday (perhaps a slow day for the salon), or spontaneous gamified offers that give customers the chance to win a free massage, for example.
7. Travel & Tourism
Airline miles and hotel loyalty programs are nothing new; however, the travel and tourism industry was arguably the first sector to embrace loyalty program partnerships.
It’s one thing to offer customers a discounted flight for every X miles flown with a specific airline; it’s another thing altogether to offer a customer free car rentals, free upgrades to fancier hotel rooms, and discounted tickets to various sights and attractions with every X miles flown… see the difference?
By partnering up with businesses that tend to share a lot of the same customers without being competitors (like Hilton Honors and Alamo Rent a Car, for example), brands can offer an exciting customer experience… not just a discount.
For local businesses that rely on tourism to survive, partnering up with innovative new travel apps like Citycards Global can be extremely beneficial. Airlines like Etihad Airways have partnered up with just about every tourism-related business in Abu Dhabi to create a seamless customer experience for visitors to the UAE capital, which in turns builds brand loyalty and customer retention to the airline.
If you’re picturing cats and dogs lining up in pet shops to redeem their hard-earned rewards, you’re almost on the right track… but not quite.
Zoetis is a global company that produces a range of premium intestinal worm, heartworm, flea and tick prevention treatments. For these products to be effective for pets, owners need to regularly administer the treatments on a fortnightly/monthly/quarterly basis.
Zoetis approached Stamp Me Loyalty Solutions to develop and build a digital loyalty platform that could reward customers for regularly purchasing Zoetis products, send automated reminders when it’s time to administer treatments, as well as educating customers on the importance of these prevention treatments.
The resulting digital loyalty app, Zoetis Paw Care Club, was a huge success in achieving these criteria and strengthening the relationship between Zoetis and its loyal customers.
Ridley AgriProducts, Australia’s leading provider of high performance animal nutrition products, enjoyed similar success with its Ridley R3 Rewards Program. This digital loyalty app allows Ridley to capture an array of invaluable data about its customers, which helps the AgriProducts company target its audience more effectively.
If mobile apps revolutionised the way people play video games, then in-app purchases monetised it. Not that it wasn’t already a profitable industry… in 2017, the gaming industry was worth a staggering $18.4 billion in the US alone.
In-app purchases have introduced a business model not too dissimilar to your average loyalty program, rewarding players for their participation and support.
Rather than paying an upfront cost for the game, many developers are opting to make the game free and then offer in-app purchases that are too enticing to say no to. This also stops game developers from resorting to in-app advertising, which is never a popular feature among users.
Those who are designing their algorithms effectively will offer players the ideal “package” or “bundle” to suit their specific needs at that particular moment in gameplay – like a $3 engine upgrade when the player is running out of time to win a race against another player who is faster than them, for example.
The circumstances might be different, but the principle is the same.
No, we’re not suggesting that schoolteachers start making their students sign up to loyalty programs where they earn toys and candy for studying! However, when good grades aren’t enough incentive for someone to expand their knowledge on a subject, you can always incentivise them in other ways.
For example, Stamp Me Loyalty Solutions worked closely with Samsung to develop an app specifically designed for employees of electronics stores, digital communications retailers and any other outlet that sold Samsung products.
The idea was to motivate employees to educate themselves on Samsung products – the features, functions, perks, and so on. The user would download the app, complete modules on their smartphone, do quizzes and then receive rewards (generally discounts on Samsung products) for passing modules.
What does Samsung get out of this? When a customer strolls into the shop and is undecided between, say, an Apple product or a Samsung product, the employee is better geared to promote Samsung, because they know more about the product.
There’s no limit to the ways in which a digital rewards platform can be used to incentivise self-education, and this opens up a whole new realm of possibilities for those who wish to have people study up on a subject in their own time.
Digital loyalty isn’t just for free coffees and discounted haircuts.
The point being made here is that loyalty programs have evolved into so much more than the original “Buy 10 of these and I’ll give you one for free” model. As loyalty programs continue to evolve, they become applicable to just about any industry out there – not just the 10 mentioned here!
Have a brainstorm about your customers or clients, your product, your service, and generally how your business operates. Is there a way to integrate a rewards program in one way or another that will increase communication, education, engagement or something else beneficial to your business?
…Because we’re willing to bet that there is.
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