3 Case Studies Prove The Importance Of Loyalty Programs
There’s a longstanding truism in retail: that it’s easier to retain an existing customer than it is to bring in a new one. This is so for several reasons, but among the most obvious is that it’s easier to demonstrate to an existing customer that they should come back for more – you’ve got their attention, and you can use it to incentivise more shopping trips.
Vouchers and reward schemes have their role to play, here. Today, these most often take the form of the customer loyalty program. Let’s look at three different ways in which major companies leveraged schemes of this sort to drive sales and retain customers.
The coffee giant is the most successful brand of its kind anywhere in the world. Over the year it’s had its ups and downs; the market became saturated in the early 2000s, and then the financial crisis arrived. Today, the company uses My Starbucks Rewards. This program rewards repeat purchases, but it also uses digital technology to track consumer spending habits. This allows the company to tailor its product line based on demand, and it also makes it possible to pay for coffee digitally. The adoption rate has been impressive, with just under twenty million active users in the US alone.
Waitrose And Partners
Waitrose is a subsidiary of John Lewis, and the go-to supermarket chain for upmarket customers with money to spend on deluxe food in posh packaging. Its reward system, myWaitrose, offers not only deals on the product range, but extras like free newspapers, coffees and teas, and even cookery courses and dry-cleaning services. Signatories to the program account for more than two thirds of the sales made by the company – and it’s helped to cement its place as a premium retailer.
Amazon’s Prime service is perhaps the most successful customer loyalty program in the history of customer loyalty programs. When first launched in 2005, it aimed to slash the rates of cart abandonment by offering free shipping for a regular subscription fee. Nowadays, the prime service includes TV and music streaming, photo storage and more. Members ultimately spend twice as much as non-members, and there are more than 150 million Prime members worldwide. That’s an online success story if ever there was one.
What About Covid-19?
The arrival of an unprecedented pandemic has had a marked impact on consumer behaviour. High street stores like Pret are resorting to creative measures to stimulate footfall, including offering coffee on a subscription basis. Clawing back consumer confidence will be a challenge for brick-and-mortar retailers. For e-commerce, it’s been a different story; sales on every major online platform have skyrocketed, as customers look to avoid the potential risk of contagion, and to occupy themselves with new products while self-isolating.