Leveraging Your Subscription Data to Build a Successful Premium Loyalty Program


Today’s customers are trading shopping bags for personalized packages. They expect retail experiences that go beyond browsing the rack — subscription services are on the rise and the rental program market is projected to reach $1.85 billion in coming years.

Some retailers have hinged their entire business model on subscription services, and it works well. Brands like Stitch Fix, Dollar Shave Club, Hello Fresh and Blue Apron are built upon direct-to-consumer subscription models. Through positive experiences and personalized moments these brands have acquired a loyal customer base, which isn’t easy in today’s market. In fact, nearly 70% of consumers agree that their loyalty is more difficult for retailers to maintain than ever before.

Other retailers offer subscription and rental options as an add-on to their traditional business models. While these programs can inspire loyalty, they are not technically loyalty programs — they are continuity programs. These programs ultimately have different business goals, yet there are many ways to understand consumer adoption and loyalty that starts with continuity and then builds into a premium loyalty program that members are happy to pay for.

The key to building on subscription and rental models is by delivering additional value to members that will inspire them to join a program. That requires offering more meaningful rewards and personalized benefits and experiences. In a sea of retailers fighting for their loyalty, consumers crave personalization, high-level perks and premium features. In fact, 65% of consumers plan to join a premium loyalty program in the next 12 months.

So how can retailers do this? By harnessing the data that their current programs create.

Support a premium loyalty program with data-driven customer insights

Rental and subscription programs provide brands with a treasure trove of valuable information on their most interactive customers, which serves as the foundational research necessary for launching a premium loyalty program.

The more consumer data, the more optimized the continuity and loyalty programs will be. Engage with customers and use data from all available touchpoints to guide decision-making. Continue to personalize the subscription model until you gather enough data on customer preferences to launch a full premium loyalty program.

For example, Stitch Fix, which delivers hand-selected clothing and accessories to their subscribers’ doors, has vast amounts of data on customer taste, size and preference. Stitch Fix can use these insights in aggregate to customize a loyalty product for each subscriber. Their customers might provide information on the types of designers they prefer. So, Stitch Fix could have an in-store event with the designer and in that way, collect data on the specific customers who would enjoy more of these premium experiences. Leveraging that information, which isn’t only about transactional benefits like free shipping and cash back, but more about the emotional and experiential, creates an opportunity for a quality premium loyalty program.

Personalization drives loyalty and customer engagement

Not only do premium loyalty programs help satisfy the evolving expectations of today’s consumers, but they boost engagement of your top 20% of customers more than a traditional program — when done right. It’s critical that each brand takes its unique customer needs and habits into account when deciding how its premium loyalty program takes shape. With data to guide decision-making and strategy, retailers can pivot from or add to their subscription or rental models and continue encouraging long-term loyalty.

-Tom Caporaso, CEO of Clarus Commerce




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