At article regarding loyalty programs both the definition and the different loyalty models found in the market appear. This publication reviews different models that can be used for study or inspiration when considering creating one of these programs.
Points: H&M
El H&M points program It is well run and fairly straightforward. Customers receive one point for every dollar they spend. When a customer accumulates 200 points, he receives a $5 voucher.
There are also other benefits including the possibility of free online returns, exclusive offers and discounts for members and invitations to exclusive events. There is a Plus level that customers reach if they earn 500 points. The main benefit of this is free shipping, as well as access to limited collections.
Customers receive a strong incentive to sign up in the form of a 10 percent discount on their first purchase.
The program works both online and on physical media. The large number of stores that H&M has, as well as its focus on low-cost fashion, means that there are likely to be many regular customers who can take advantage of the use of an online application.
The program runs through the shopping app itself, making it easy for customers to manage their points and make purchases. Although, there is also the option to use the program without the app through a membership card or code.
Seals: Hotels.com
Hotels.com uses a stamp-based program to encourage buyers to book hotels through its service. The way it works is simple, customers receive a stamp for every night they stay at an eligible hotel booked through the online service. Once the client has obtained ten stamps, he has a free night in a hotel.
Because Hotels.com offers hotels at a wide range of prices, the value of the hotel night that customers can redeem is the average of the cost of the ten nights that were used to earn the free night. If the client wants to book a more expensive hotel, he can pay the difference. It is also possible for customers to stack multiple nights and use them all at once.
The loyalty program is managed both through the browser website and the mobile phone application. The seal is automatically added to an account each time a registered customer makes a reservation.
The loyalty program works for several reasons. First, the offer is incredibly simple, ten nights equals one free night. Plus, it's easy for users to collect, redeem, and manage their free nights and stamps.
It is also a product that many customers are likely to use on a regular basis. Not only is accommodation common to certain types of listings, but the sheer number of hotels on Hotels.com means it's easy for customers to find the type of hotel they need and become repeat buyers. Lastly, the deal itself is a good one, as staying in hotels can be expensive, so a free night is a hefty reward.
In addition to the stamp-based rewards program, Hotels.com offers tiers based on the number of nights customers book each year.
The Silver level is awarded to those who book 10 nights a year and provides benefits such as free breakfast, airport transfers and spa coupons at select hotels. Plus, Silver members get priority customer service and access to a guaranteed price.
The top tier is Gold, which is available to those who book 30 stays in a year. This gives users all the benefits of Silver plus complimentary upgrades, early check-in and late check-out at select hotels.
The last thing that Hotels.com does to attract repeat customers is to regularly send users special offers via email, as well as offer deals through the app.
Payments: Amazon Prime
Amazon Prime is a great example of a pay-in-advance loyalty program. Last year, the company reported that more than 10 million people use the service worldwide. This is an incredible number for a paid program that, at $119/year or $12,99/month, isn't cheap.
The program works because, despite the price, being a Prime member offers great value to customers. Prime members get access to a host of features including:
- Unlimited two-day shipping and same-day delivery in some areas at no additional cost.
- Access to the Amazon Prime video catalog. While not every TV show or movie available on Amazon is also available on Prime, the offering is still vast.
- Ad-free access to Amazon Music.
- Unlimited access to Prime Kindle books.
- Free games and bonuses on Twitch.
- early access to Lightning Deals. These are special discounts that are available in limited quantities.
- Other savings. For example, discounts on diapers and baby food subscriptions.
Basically, there is something for every type of customer. If a user regularly uses only some of these features, he quickly recovers the cost of the subscription.
However, Prime also offers great value for Amazon. Consumer Intelligence Research Partners They estimate that Prime members spend almost twice as much per year as non-Prime members, $1300 vs. $700 on average per customer.
One way to attract new customers is to offer a free sample of the service. The trial version allows customers to take advantage of all the benefits of Prime for 30 days.
Tiered program: Finnair Plus
As an example of a tiered program, virtually any airline can be chosen. However the finnair loyalty program is a great example of a level program with extras.
As with many airlines, there are different tiers that offer gradually increasing benefits. The first level is Silver and can be reached by those who accumulate 30.000 points or take 20 flights in a year. It offers extra baggage and access to airport services, such as business class check-in and priority lane access.
At the other end of the spectrum is Platinum Lumo, which offers members a host of benefits including free business class upgrades.
Service goes above and beyond in several ways. As Finnair is part of the OneWorld Alliance, customers can collect points on several different airlines.
Additionally, users who are having difficulty earning enough points to reach high tiers can use their points to purchase things that make the flight experience easier, such as seat upgrades, in-flight internet connectivity, or meals.
Customers can easily manage their points through the airline's app or website. The app has the added benefit of allowing customers to easily book flights right from their phone, which could increase the chances of customers making new purchases.
Coupons: Adidas Members
The program based on adidas coupons consists of registering to become an Adidas member. Registered users receive a regular newsletter that provides news about new products, as well as an alert when Adidas has a special offer or sale.
Customers are encouraged to sign up, as Adidas gives everyone who makes a 15 percent discount coupon on their first purchase; this is a great deal.
While benefits are limited to these discounts, those who want more are encouraged to sign up for the Adidas Creators Club. This is a tier-based program where customers gain access to special events, limited edition merchandise, custom training plans, and more.
Alternative Program: Starbucks
El starbucks program it is a combination of a points-based program and a stamp-based program. It also has many other interesting options.
Users get two stars for every dollar they spend. These stars can be spent on food and drink from Starbucks. Users need 25 stars to customize their drink, 50 stars to get a free brewed coffee, 150 to get a craft drink, or up to 400 to get Starbucks merchandise.
What makes the show interesting are the extras.
To use the program, users must download the Starbucks app. Through the app, users can order and pay for their food. This provides the advantage of reducing the time spent queuing. In addition, the company offers birthday gifts and personalized offers.
Starbucks also gives users the opportunity to collect bonus stars through in-app games and double star days. A helpful addition that increases the chances of repeat customers is that the app also allows users to load and keep money in their Starbucks account.
By running the entire points program through the app and adding in the extra benefits, Starbucks makes the program very immersive. This, coupled with the consistent service offered by Starbucks itself, has made it one of the most successful loyalty programs out there.
