The best way to do something is to look at how others successfully achieved your aspirations. This could not be truer than for loyalty programmes. Unlike most things in life, they have a blueprint that you can copy (if you know what you’re looking for).
With or without a loyalty programme, if you’re worried about low customer engagement, this is the blog for you. We’ll help you understand why high engagement is important and the lessons we should take from the best examples of loyalty programmes. By the end of this blog, you’ll know what to look out for, to analyse and mimic for your success.
Why Loyalty Programmes are Important for Customer Engagement?
Most unsavvy businesses never go beyond purchase transactions. In a world of heightened consumer scrutiny, businesses that only stick to transactional customer relationships will find it harder to survive.
Loyalty programmes go the extra mile. In many ways they are a dialogue between your business and customers.
Which is why 68% of customers feel brands with loyalty programmes understand them better.
It’s no coincidence. Successfully nurturing loyalty involves a lot of hard work that’s absolutely essential.
For example, when you collect and centralise customer data, that’s basically a way of your business getting to know customers better. Just like when we ask questions about other people in social situations. Running with this idea of the programmes being a dialogue then, think of engagement as a measure of how interested your customers are in what you have to say.
The quality of your rewards is the same as the quality of conversation. People stop listening if they don’t like what you have to say. Offering rewards that fail to resonate means your customers will stop engaging. The conversation falls flat and the customer moves on.
Loyalty Programme Examples
1) HelloFresh - Always On (Instant Rewards)
Industry: Online food delivery services - meal kits
Company Overview: HelloFresh is a subscription-based service that offers meal plans for every dietary preference or need, be it vegetarian, family-friendly or low-calorie. Customers select recipes catered to their tastes each week, with freshly sourced ingredients delivered in insulated boxes and recyclable packaging.
Loyalty Programme Overview: HelloFresh’s reward programme is multifaceted. It offers customers at different stages of the customer journey various offers and rewards. The “Always On” aspect of the programme gives all active subscribers 24/7 access to unique offers and benefits.
Always On loyalty drives customer engagement because it’s accessible, inclusive and rewarding. After all, there’s no need to fulfil certain criteria to access rewards. Customers can choose when they want to redeem rewards and will continue to access them for as long as they remain subscribed to HelloFresh’s loyalty programme.
Taking too long to access rewards is one of the most common complaints about loyalty programmes. Complex methods of earning benefits or lacklustre rewards also contribute to high levels of churn. However, an Always On loyalty programme safeguards engagement by promising customers perpetual access to special benefits regardless of where they are on the customer journey.
2) Graze - Always On (Instant Rewards)
Industry: Food distribution and food manufacturing - meal kits
Company Overview: Graze offers a subscription service that curates boxes of assorted healthy snacks, including nuts, seeds, dried fruits, snack mixes and other nutritious options. Subscribers can choose the frequency of deliveries (e.g., weekly or fortnightly) and the number of snacks. All of which are portion-controlled and specific to dietary needs.
Loyalty Programme Overview: Instant and Always On rewards are interchangeable terms for the same type of loyalty programme. Just like HelloFresh, Graze uses their Instant (or Always On) Rewards to instantly drive engagement.
This type of loyalty programme is a great way to offer customers tangible benefits. Particularly when they make savings on groceries, travel and essential expenses.
Always On or Instant Rewards loyalty programmes drive customer engagement by offering ancillary value without charging customers extra for it.
3) Starbucks and Spotify - Loyalty Partnership
Industry: Retail coffee and audio streaming & podcasting.
Starbucks is a global coffeehouse chain known for its premium coffee and café experience. Starbucks operates over 30,000 stores worldwide, offering a variety of beverages, snacks, merchandise, and fostering a community-centric atmosphere
Spotify is an audio streaming and media services provider. Spotify offers a vast library of songs, playlists, podcasts, and personalised recommendations, accessible to millions across the globe through subscription-based models.
Loyalty Programme Overview: Technology is the beating heart in the partnership between Starbucks and Spotify. The programme looked to further customise customer experiences inside Starbucks brick and mortar stores.
Where baristas call your name and you can receive a free drink on your birthday, it’s quite clear Starbucks strives to personalise the experience of drinking coffee at their stores. Their partnership with Spotify aims to enhance personalised experiences even further.
Members of My Starbucks Reward were encouraged to curate their own playlists on Spotify. They can then share these playlists in Starbucks stores so that they can listen to their favourite music and share it with others.
63% of marketers agree that increased engagement is one of the top benefits of personalisation.
What’s more, the partnership in its endeavour to drive customer engagement through enhanced personalisation, will also boost acquisition for both brands. Spotify has a pool of 10 million potential new customers through Starbucks. On the other hand, Spotify has over 60 million users that could be swayed to sign up to Starbucks mobile app-run loyalty programme to try the new playlist feature.
4) Marriott Bonvoy and Uber - Loyalty Partnership
Industry: Hospitality services and Transportation.
Marriott offers diverse accommodations across 7,800 properties globally. With various brands under its umbrella, Bonvoy provides rewards, exclusive experiences, and a range of hospitality options to its members. These span from breathtaking luxury resorts to more budget-friendly accommodations.
Uber is a multinational ride-sharing and delivery service company, operating in over 900 metropolitan areas worldwide. Uber offers transportation, food delivery, and courier services via an app. It revolutionised the transportation industry by providing convenient, on-demand mobility and delivery solutions.
Loyalty Programme Overview: A points-based system is the central pillar of the partnership between Marriott Bonvoy and Uber. Customers are encouraged to engage with the loyalty programme by earning points for various qualifying factors. Each of which incentivises commercially desirable behaviours from customers.
Customers earn points for every dollar spent riding with Uber, getting takeouts delivered by Uber Eats to any hotel in Marriott’s portfolio, and eligible Uber Eats restaurants, grocery orders, including from Marriott restaurants.
5) Airbnb - Referral Programme
Industry: Hospitality services.
Company Overview: Airbnb is a global online marketplace for lodging and experiences. Individuals list, discover, and book accommodations and activities worldwide. That’s because Airbnb connects travellers with unique stays at diverse lodging options ranging from homes to apartments.
Loyalty Programme Overview: Airbnb's referral programme acts as a mutual benefit system that entices both current users and their referrals with travel credits. Credits are issued upon the completion of the new user's first stay. This becomes a catalyst for engagement as it inspires existing users to actively share their positive Airbnb experiences with friends and family.
Plus, since referrals rely on personal relationships and trust, newcomers are naturally more engaged and open to build stronger long term relationships with your brand.
Rewarding both parties in the referral process creates a cycle of engagement and growth. As existing parties and newcomers are equally eager to explore the offerings and incentives for participating in the programme, culminating into a strategy that fuels engagement and user retention.
6) Duolingo - Gamified Loyalty
Industry: Educational technology.
Company Overview: Duolingo is a language-learning platform and app founded in 2011. With free and premium language courses in over 40 languages, Duolingo provides accessible and interactive lessons. This enhances user engagement in learning a new language.
Loyalty Programme Overview: Duolingo's gamified loyalty programme intertwines language learning with a playful, engaging experience. Using a points-based system, learners earn XP (Experience Points) for completing lessons and staying consistent with their daily learning goals.
Gamification technique instils a sense of accomplishment and progress, encouraging users to return regularly to maintain streaks and earn points.
Daily streaks reward consistent learning behaviour, motivating users to return each day to uphold their streaks. Challenges and leaderboards create a competitive environment, encouraging users to engage with others and strive for progress.
The loyalty programme infuses fun and competition into the educational process to cultivate ongoing engagement and consistent interaction with the platform.
7) Panera Bread - Gamified Loyalty
- Industry: Retail coffee & retail chain bakery.
Company Overview: Panera Bread is a bakery-café chain renowned for its fresh-baked goods, sandwiches, salads, and soups. There’s over 2,000 locations in the U.S. and Canada that emphasise clean eating, quality ingredients, and quick-service dining, from diverse menus.
Loyalty Programme Overview: Panera Bread kicked off a week of special savings and surprises for members of MyPanera back in September. Meenakshi Nagarajan, Chief Digital Officer said:
“This weeklong celebration is another example of the disruptive value and personalised rewards that Panera is known for – we hope our members enjoy unrivalled access to savings from our bakery-cafes as well as gamified challenges to unlock big wins."
Gamification gives a 30% lift in customer engagement and loyalty. In the case of Panera Bread, what made MyPanera week such a success was the sense of anticipation and satisfaction they invoked in their customers.
Challenges exclusively for MyPanera subscribers count on their anticipation and excitement to participate. Similarly, it also encourages existing customers to become a member of the loyalty programme.
8) Ulta Beauty - Tiered Loyalty
- Industry: Beauty & cosmetics retail.
Company Overview: Ulta Beauty is a beauty retailer established in 1990, providing a wide range of cosmetics, skincare, and hair care products. Ulta offers both high-end and drugstore brands, along with salon services that foster a one-stop shop for beauty enthusiasts.
Loyalty Programme Overview: Ultamate Rewards uses a multi-tiered structure to engage and reward customers. Members earn points for purchases, unlocking higher tiers with more valuable benefits. Higher tiers offer increased point rewards, birthday gifts, and early access to exclusive sales and events.
Tiered loyalty programmes incentivise customers to continuously engage and spend. For a brand like Ultamate Rewards, a tiered loyalty programme is perfect. Brands that sell beauty products, fashion or anything else that can be considered “luxurious” mesh well with tiered loyalty, due to social status implications and psychological phenomena (such as FOMO).
By providing enhanced benefits higher tiers encourage members to strive for and maintain elite status. Elevated privileges are great for fostering ongoing engagement and have the ability to transform routine shopping habits into a journey towards rewarding experiences.
9) Chase Bank - Earn and Burn
- Industry: Finance
Company Overview: Chase Bank is part of JPMorgan Chase & Co., a leading financial institution with a range of banking services. These include personal and commercial banking, credit cards, mortgages, and investments. With a vast network of branches and digital services, Chase provides financial solutions to millions of customers worldwide.
Loyalty Programme Overview: Chase Bank's "Ultimate Rewards" programme is an earn and burn loyalty system tied to specific credit cards. Customers accrue points or miles for purchases made with Chase credit cards, redeemable for travel, cash back, gift cards, merchandise and meals The programme also offers tiered benefits, allowing users to be strategic with point usage for travel redemptions and exclusive experiences.
This programme encourages continual engagement by rewarding everyday spending with points or miles that can be flexibly redeemed. Customers can optimise their rewards based on their preferences. Whether that's for travel, cash equivalents or other incentives. Chase's points-based Ultimate Rewards programme transforms routine spending into tangible benefits that drives ongoing engagement and loyalty among its cardholders.
10) JD Gyms- Premium Loyalty
- Industry: Fitness
Company Overview: JD Gyms, a branch of JD Sports Fashion PLC, has been a UK-based fitness chain since 2014. It offers affordable, modern fitness centres with top-notch equipment and diverse classes. Emphasising a community-driven atmosphere, JD Gyms aims to make fitness accessible to everyone in an energetic workout environment.
Loyalty Programme Overview: JD Gyms’ Plus Membership is a loyalty programme that their customers pay access for through an upgraded gym membership. The objective of the programme is to upsell existing gym members, retain them through added value, use gamification and triggered incentive for increased engagement, and acquire customers through referrals.
The loyalty programme drives desirable commercial outcomes e.g., specific actions such as subscription upgrades that trigger rewards. Gym goers are encouraged to make referrals, sign up to contract for free access to the loyalty programme and attend the gym for a certain amount of sessions a month. In spite of it being a loyalty programme that requires payment to access it, JD Gyms has seen a 5700% uptake increase of premium subscriptions. Plus…
60% of consumers spend more with brands that have a paid or premium loyalty programme, showing just how well they drive consistent engagement.
As long as the loyalty programme is engaging and improves customer experiences, people will be more than happy to pay a little extra for a whole lot more.
Drive high engagement by saying something interesting instead of shouting over competitors
High customer engagement indicates you’ve got something interesting to add to the conversation. By looking at each type of loyalty programme we offer done by our clients and other brands, you should have more context as to what it takes to keep customers interested.
Unique, highly relevant rewards that show you’ve done your homework and listened, encourages customers to keep the conversation going with your brand. Want to find out more about different types of programmes? We’ve got you covered.