During the formative years, the best loyalty programs simply awarded points for the purchases that customers made which could be redeemed for rewards. Businesses utilized such programs to differentiate themselves from its competitors. Such transactional loyalty programs made it easier for businesses to retain customers and increase repeat purchases and revenues.
Over time as loyalty programs became a norm, businesses started offering unique immersive experiences to differentiate their business. With increased competition in the market, the key advantage offered by the newer programs allowed businesses to stay competitive without the need of discounting. In this article, we discuss how the best loyalty programs structure their incentives to address their unique objectives and challenges. With better customer engagement, businesses can build personal relationships with their customers.
Five Best Loyalty Programs in the World
- Nordstrom Loyalty Program
- Marriott International Loyalty Program
- Amazon Rewards Program
- ULTA Beauty – Ultamate Rewards
- Kelly Services Loyalty Program
1. Nordstrom Loyalty Program
The Nordy Club (Apparel)
Nordstrom, Inc. is a leading fashion retailer offering compelling clothing, shoes, and accessories for men, women, and kids. From being a small shop, Nordstrom has come a long in 100 years to now be publicly traded on the NYSE. Nordstrom rewards is one of the best loyalty rewards programs implemented in the apparel industry.
Nordstrom restructured their rewards program in 2018, renaming it to the catchy ‘The Nordy Club’, leading to immediate success. The program has a tiered structure, with exclusive & incremental benefits as customers rise up the tiers. Customers earn points for purchases, and rewards range from fee waivers on add-on services to priority access to exclusive events.
Nordstrom has cleverly added another element to the points-earning capability. With the help of Nordstrom credit and debit cards, customer can accelerate their points earning. Customers can earn points for purchases with these cards for Nordstrom products, and products from other brands as well! The Nordstrom card thus became a powerful tool to engage customers and create a hook for increased repeat purchases.
Key Highlights
- Tiered loyalty program to prioritize high-spending customers.
- From basic discounts to being able to access ‘Invite Only’ parties, customers get a wide range of rewards.
- Accelerated points earning capability through Nordstrom credit & debit cards.
- Social sharing and referrals to further engage customers.
2. Marriott International Loyalty Program
Loyalty Program: Marriott Bonvoy (Hospitality)
Marriott International offers the most diverse portfolio in the hospitality industry. They have over 30 brands and 7,000+ properties across 131 countries. With such a vast network under its umbrella, Marriott’s program in one of the best loyalty rewards programs the hospitality industry has seen.
After the acquisition of the Starwood group of hotels, Marriott renamed their loyalty program in 2019 to Marriott Bonvoy. Marriott Bonvoy is a tiered program to reward loyal and high-spending customers. Members earn points for not only their stays & in-hotel spending but also from partner outlets, for example, car rentals at Hertz. To redeem the points, discounts on future bookings are extended to select flights and car rentals as well. All these activities & multiple reward options together contribute to a great member experience.
Marriott has gone a step ahead and allowed members to transfer points to one another. This creates a network & community feeling, encouraging people to join this loyalty program. Marriott has also incorporated donations to select charities, where members can choose to redeem their points in exchange for a donation to a charity of their choice. Members relate to this common interest which creates an emotional connection with Marriott.
Key Highlights
- Tiered program to prioritize the high-spending customers.
- Earning points via several activities, not restricted to only their wide network of hotels.
- Partnered with Credit cards, car rentals, and more than 40 airlines for enhanced points-earning capability.
- Transferring loyalty points to fellow members is quite unique to this program.
3. Amazon Rewards Program
Amazon Prime (Online Retail)
Amazon.com is a household name and people will get confused in which vertical it started off with. The biggest potential cost companies have today is not evolving their loyalty program, especially as we venture into a strange new world post-pandemic. Amazon Prime’s value-added services like their Prime Video have seen such growth that people opt for these services exclusively and enjoy the benefits of the program. This successful business had a humble start and to get ahead of its competition, Amazon addressed its customers’ biggest pain point – shipping costs. Amazon Prime initially focused on the needs of Amazon’s best customers first and then added to the program over time. With a customer-first approach, Amazon is without a doubt the best loyalty program that has been launched.
Charging members an annual fee allows Amazon to offer its best benefits to customers who will get the most value out of their loyalty program. A subscription fee is a two-way commitment. Psychologically, Amazon Prime members want to make additional purchases to justify the membership cost. Equally important, Amazon has made sure it is committed to running a program that is increasingly valuable to its members along with the option on their first purchase to try the benefits right away. The free trial has proved to be a vital component here. Seeing the success of one side of the business, Amazon launched Amazon Moments for its vendors selling on the platform. By innovating their rewards and experiences Amazon is quickly raising the bar for the best loyalty rewards programs.
Key Highlights
- Amazon has evolved its previous loyalty program completely and now offers a program that is classified as a premium loyalty program.
- A subscription model with benefits like free shipping, exclusive deals, early access to offers etc.
- Many value-added services like Amazon Music, and Prime Video subscriptions are all bundled together.
- Two different loyalty programs for its B2C and B2B segment.
4. ULTA Beauty – Ultamate Rewards (Beauty & Cosmetics)
Ulta Beauty is a well-known retailer in the world of cosmetics. The Ulta Beauty program uses AI-powered personalization and AR-driven virtual try-ons to create realistic experiences.
The rewards program is named as ‘Ultamate Rewards’. Like most rewards programs it has a tiered structure which provides exclusive benefits as the customers rise up the tiers – including bonus gifts and early access to deals. By opting into Ulta Beauty’s emails and mobile app notifications members learn of bonus points deals to take advantage of. While the members must spend a certain amount to maintain their tier status, their points do not expire. Accumulating points in this manner allows individuals to actively use the discount coupons, significantly subsidizing their purchases of premium beauty products. The aspiration to buy premium products keeps members buying from their stores. With innovations in customer experiences and personalization, Ultamate Rewards has utilized one of the best loyalty program software in the cosmetics sector.
Key Highlights
- The Ultamate Rewards Mastercard provides additional discounts while shopping with ULTA
- Exclusive offers for members with a tiered program to prioritize the high-spending customers.
- No expiry of points for the top two tiers.
- Social sharing and referral modules could further engage their customers.
5. Kelly Services Loyalty Program
Kelly Rewards (Staffing & Education)
In 1946, William Russell Kelly’s dynamic vision and pioneering spirit offered a unique service that quickly became popular with local businesses and established Kelly Services’ leadership in the staffing industry. Today, Kelly Services is a Fortune 500 company delivering staffing solutions that include temporary, full-time placement, outsourcing, and consulting. Over the years, Kelly Services has branched out in many verticals including education. Kelly Rewards is a loyalty program for Kelly’s education vertical and it has seen immediate success.
Kelly Services attracts a high volume of knowledgeable instructional workforce who can enroll to become their members. These members are partners more than customers which makes this rewards program interesting. Members earn loyalty points for assignment completion and are awarded some bonus points for their anniversary. In rewards, apart from Kelly Services merchandise, members can get a special Kelly Services badge for their LinkedIn profile. This goes a long way to create a seal of approval for future projects and partners for these members. The implementation of the best brand loyalty management software in the staffing and education niche is the first of its kind. Kelly Services has been brave to innovate but with their success, many others will follow. The program’s immediate success is a key to Kelly Services’ future growth.
Key Highlights
- Points earned for assignments and anniversaries.
- Tier-based rewards, like badges for LinkedIn profile, is quite unique and will be sought after by their members.
With the number of customer loyalty program options only increasing, it can be tempting to emulate successful programs that already exist. But businesses are more likely to attract a loyal customer base through customized experiences that only they can offer. Loyalty program platforms must be intelligent, and dynamically track and predict customer changing preferences.
The best loyalty program software allows businesses to attract and retain customers through a program that can influence buying behavior, create an emotional connection and get them invested in the brand. Such 360-degree engagement makes customers more loyal and reduces discounts that need to be offered.
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