How Premium Loyalty Programs Help Retain Customers in Any Season


With seasonal shopping top of mind for both retailers and consumers, how can sellers ensure they remain the first choice of spenders? While traditional, points-based loyalty programs are often the go-to loyalty strategy, staying ahead of the competition year after year requires something bolder.

In fact, a top complaint about traditional loyalty programs is often that brands offer rewards too slowly, which especially rings true this holiday spending season. COVID-19 has pushed more consumers online than ever before, and it's easy for them to find the lowest price on virtually any item they can imagine. Add in the launch of Walmart+ and Prime Day in October and retailers have their work cut out for them this holiday season. Meaning, as we get into the holiday shopping season, retailers need something to set them apart, and a traditional loyalty program may not cut it.

Major spending seasons are right around the corner, and without a premium loyalty program, you risk losing once-devoted shoppers who have tightened their wallets. Premium loyalty programs offer instant discounts to inspire immediate purchases and experiential benefits to form an emotional connection that keeps customers coming back for more.

Two core components of a premium loyalty program

A premium loyalty program gives your brand an advantage over competitors during prime spending seasons — 88% of shoppers are more likely to choose a retailer whose premium loyalty program they belong to than a competitor offering a lower price. Although programs vary widely across industries, customer needs and product offerings, the success of any premium loyalty program hinges on the following core components:

1. Value through every engagement

Points are a great way to display status and measure progress, but today’s customers crave instant gratification — the pace of the world is only getting faster and loyalty programs must keep up. Premium loyalty programs don’t make customers wait for value. Instead, in exchange for a fee, customers receive instant transactional benefits, such as free shipping, a percentage off every purchase or free upgrades.

These instant benefits allow customers to experience value every time they shop, rather than delaying benefits until they’ve accumulated points. Instant benefits are likely the first loyalty moment your customers will experience, so they are a critical part of ushering them on the path toward becoming engaged and active loyalty members, rather than one-time users of a single-use discount.

2. Experiences that connect

Offering discounts to customers isn’t a novel concept. So, if discounts are the sole benefit of a loyalty program, customers might develop loyalty to the discount rather than the retailer — and jump around to whichever retailer offers the best savings on their purchase. True, long-term loyalty instead hinges on forging an emotional connection. In fact, consumers with an emotional connection to a brand have a 306% higher lifetime value.

To create an emotional connection, add experiential benefits to the program that align with your customers’ lifestyles, while reinforcing your brand’s mission. Experiential benefits require thorough research and continual refinement.

Lululemon, for example, does a great job offering both transactional and experiential benefits with its premium loyalty program. For an annual fee, members enjoy not only free merchandise and free shipping, they also can take part in top-tier online and in-store fitness classes. These benefits really fit the lifestyle of Lululemon’s customer base and offer an exceptional value.

Tom Caporaso

Customer loyalty is about more than just enrollment in a program. It’s about fostering a long-term, mutually beneficial engagement between brand and shopper. Premium loyalty offers valuable transactional and experiential benefits, so you can remain the first choice of your loyalty members — regardless of the season.

Tom Caporaso is CEO of Clarus Commerce.

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