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In August 2024, Walmart collaborated with Burger King to introduce a unique dining perk, offering … [+]
Photo courtesy of Walmart
While reward points can reduce expenses during shopping, fostering customer loyalty often requires experiences that are more engaging.
This type of experiential benefit is just one of many innovative member incentives introduced by loyalty program managers in 2024, reflecting a clear effort to attract new members. Competition in this sector is intensifying!
Currently, over 90% of companies offer some kind of loyalty program, making them as ubiquitous as branded websites. To differentiate themselves, in late 2023, 87.5% of those managing loyalty programs indicated plans to interact with their members in creative, non-transactional ways over the next three years, as reported by Queue-It .
7 Reward Benefits Worth Watching
The term “non-transactional” can encompass various approaches, particularly when it involves creativity (such as partnerships). The following examples of program benefits and innovations from 2024 are set to influence what loyalty program managers and consumers can anticipate in 2025.
1. NASCAR’s <a href="https://www.nascar.com/fanrewards-about?cid=NFR_PS_TP_WL_2023FanRewardsSearch_230130&s_kwcid=AL!9348!3!646720774781!b!!g!!nascar%20fan%20rewards&gad=1&gclid=CjwKCAjwp6CkBhB_EiwAlQVyxdtXxeaf-cDat2525Q6UlTMdGK0e1fOlJp3BAqgIaThahHSDMjHpBRoC1yIQAvD_BwE" rel="nofollow noopener noreferrer" target="_blank" class="color-link" title="https://www.nascar.com/fanrewards-about?cid=NFR_PS_TP_WL_2023FanRewardsSearch_230130&s_kwcid=AL!9348!3!646720774781!b!!g!!nascar%20fan%20rewards&gad=1&gclid=CjwKCAjwp6CkBhB_EiwAlQVyxdtXxeaf-cDat2525Q6UlTMdGK0e1fOlJp3BAqgIaThahHSDMjHpBRoC1yIQAvD_BwE" data-ga-track="ExternalLink:https://www.nascar.com/fanrewards-about?cid=NFR_PS_TP_WL_2023FanRewardsSearch_230130&s_kwcid=AL!9348!3!646720774781!b!!g!!nascar%
Fan Rewards has kept up with the times. NASCAR has consistently focused on creating exclusive experiential rewards that are not only memorable but also beneficial for business. Many NASCAR fans opt to view races from home or in places like bars and restaurants, rather than attending the tracks. However, the “VIP Experience” aspect of Fan Rewards addresses this by bringing these devoted fans to the tracks. Here, they can exchange their points for extraordinary experiences, including pace car rides, Victory Lane photos, and the chance to wave the checkered flag during qualifying rounds in 2024.
2. Walmart+ aims for the throne. Walmart introduced its $98-a-year Walmart+ program in 2020 and has since enhanced it with appealing features like the Walmart Cash savings benefit, which serves as “promotional currency all Walmart customers can accrue through manufacturer offers.” In August 2024, Walmart partnered with Burger King to launch an unprecedented dining benefit offering members 25% off all digital promotions, along with a free Whopper every three months. (Members of Walmart+ are required to link their Burger King Royal Perks accounts to enable this benefit.) This collaboration has the potential to enhance Burger King’s sales, bring in more paying Walmart+ members, and yield valuable new data insights.
3. Ulta Beauty Rewards recognized for savvy innovation. In 2024, this leading retailer in makeup, skin care, and hair products incorporated a popular word game into its rewards program. Ulta’s GlamXplorer program provided a combination of beauty and gaming through challenges, such as a “Word of the Day” puzzle reminiscent of the New York Times’ game, Wordle. Ulta selected 1,000 of its top-spending Ulta Beauty Rewards members to participate in this pilot, gaining valuable insights and encouraging purchases through cleverly constructed solution words like BL.
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USH. Ulta is currently advising participants to “stay tuned” for future updates. We are!
4. The North Face XPLR passes the test. One of the advantages of the outdoor equipment brand’s XPLR Pass is that members can test unreleased products, providing them with firsthand involvement. In 2024, select members may have had the opportunity to evaluate products during one of North Face’s Trail Days hiking events in cities like Austin, Denver, and New York. Participants of all skill levels hiked alongside North Face athletes, expert guides, and industry professionals during these gatherings. To foster community (and loyalty), North Face organized lunch, refreshments, and live music for the 100 attendees. “Lots of new friends!” the brand highlights on its FAQ page.
5. Lululemon platform leans into experience. In a departure from conventional reward program structures, the activewear brand’s Essential program emphasizes experiential rewards over monetary savings. In 2024, Lululemon expanded these offerings to give members access to 12 different external fitness and wellness brands. Through Partner Perks, members receive exclusive deals on popular brands such as La La Land Café, Sweetgreen, Oura smart rings, and Erewhon nutrition. Benefits include complimentary six-month memberships with Oura and reduced-price “lulu lattes” at La La Land, along with community engagement.
6. Marriott Bonvoy executes a Swifty move. In a brilliant stroke of creativity, the Marriott Bonvoy program <a href="https://news.marriott.com/news/2024/02/27/marriott-bonvoy-brings-once-in-a-lifetime-experiences-at-taylor-swift-the-eras-tour-select-performances-across-the-world"
In February, Marriott launched a sweepstakes campaign that allowed members to win highly sought-after tickets for Taylor Swift’s Eras Tour. This promotion provided three chances to witness the superstar live, with travel and hotel accommodations included. Additionally, Marriott motivated Bonvoy members to use their points for Swift tickets through the Bonvoy Moments experiential platform. For 500,000 points, members received access to a pair of concert tickets along with hotel nights. This initiative sparked considerable excitement among fans and likely encouraged new member sign-ups.
7. Domino’s rewards tips with extra toppings. Domino’s “You Tip, We Tip” loyalty promotion is remarkably well-timed. Introduced just prior to calls from U.S. presidential candidates Donald Trump and Kamala Harris to reduce taxes on tips, Domino’s committed to offering customers $3 coupons every time they tip a delivery driver. While credit card companies typically issue points on coded tips without restaurant involvement, Domino’s takes the initiative by directly rewarding customers. By addressing “tipping fatigue,” the company enhances its visibility and demonstrates its concern for customers, serving as an effective engagement strategy.
Looking Ahead: 3 Perk Innovations Worth Testing
The incentives highlighted above share a common theme: they are experimental. While some may not last until 2025, they will undoubtedly inspire future innovations. Here are three guidelines worth considering.
- Enhanced competitive paid membership perks. In 2024, Target, Best Buy and even Chuck E. Cheese have introduced paid membership options. As a result, consumers are becoming more selective: 31% are looking for cheaper subscription alternatives, while 24% frequently switch their subscriptions, according to CNET reports. We can only hope that these programs will reinvest their membership fees into benefits that offer greater value than the cost of enrollment, such as an easily accessible and well-considered “pause subscription” feature.
- More thoughtful artificial intelligence. The AI sector, valued at $185 billion according to Statista, is projected to expand at an annual growth rate of 28.5%, and for good reason: it outpaces other technologies in both speed and accuracy in data processing. Nonetheless, no matter how well-crafted the incentive or how innovative the reward, members can discern when a brand regards them solely as sales figures rather than as individuals. Companies should explore ways to utilize AI that demonstrate a deeper care, moving beyond conventional engagement strategies like personalized product recommendations based on recent purchases.
- Leverage partnerships. In European countries and Canada, numerous companies often collaborate
Are these endeavors certain to succeed? No. However, exploring uncharted areas entails risks, and businesses must be willing to confront risk and adversity in order to achieve success. As T.S. Eliot is often quoted, “Only those who risk going too far can possibly find out how far one can go.”
Innovative Loyalty Programs: 7 Trends Shaping Consumer Engagement in 2024
1. Personalization at Scale
In 2024, personalization is no longer a luxury; it’s a necessity. Consumers expect brands to understand their preferences, behaviors, and interests. Innovative loyalty programs leverage big data and AI analytics to create tailored experiences that resonate with individual customers.
- Data Utilization: Brands are harnessing customer data to offer personalized rewards, making each interaction relevant.
- Dynamic Offers: Loyalty programs now feature dynamic offers based on real-time shopping behaviors.
2. Omnichannel Loyalty Programs
Consumers engage with brands across multiple touchpoints—online, in-store, and via mobile apps. Thus, an omnichannel approach in loyalty programs is crucial for maintaining engagement. This trend focuses on creating a seamless experience across all platforms.
- Consistent Messaging: Ensure that loyalty rewards are communicated uniformly across channels.
- Cross-Channel Redemption: Customers should be able to earn and redeem points effortlessly, whether they shop online or in-store.
3. Sustainability Integration
Increased consumer awareness of environmental issues is driving brands to incorporate sustainability into their loyalty programs. Eco-friendly initiatives not only attract eco-conscious customers but also enhance brand reputation.
| Initiative | Impact on Loyalty Programs |
|---|---|
| Carbon Offset Programs | Allow customers to earn points for participating in sustainability efforts. |
| Recycling Rewards | Encourage customers to return products for rewards, reducing waste. |
| Plant-Based Rewards | Incentivize purchases of eco-friendly products with enhanced loyalty points. |
4. Gamification Elements
Gamification continues to be a compelling way to engage customers in loyalty programs. By introducing game-like elements, brands can make the shopping experience more interactive and enjoyable.
- Challenges and Badges: Customers can complete challenges to earn badges, enhancing their sense of achievement.
- Leaderboards: Displaying leaderboards encourages friendly competition, motivating customers to engage more with the brand.
5. Subscription-Based Loyalty Models
Subscription-based models are gaining popularity as they provide consistent revenue for brands while offering customers a sense of exclusivity and value. These programs often integrate tiered benefits that increase loyalty as customers spend more.
- Exclusive Access: Subscribers may receive early access to sales or exclusive products.
- Predictable Costs: Customers appreciate knowing their costs upfront, which can enhance spending behavior.
6. Multi-Tiered Rewards Systems
Multi-tiered loyalty programs enable brands to cater to different customer segments effectively. By creating levels of engagement, brands can incentivize customers to ascend through tiers based on their purchasing behavior.
- Tiered Benefits: Higher tiers unlock greater rewards, encouraging continued spending.
- Personalized Tier Progression: Customers can be rewarded for not just spending but also for engagement through reviews or referrals.
7. Enhanced Mobile Experiences
With the increasing reliance on mobile technology, loyalty programs are optimizing for mobile experiences. Apps that facilitate easy access to rewards and promotions are becoming essential.
- Mobile Wallet Integration: Loyalty points can now be stored and redeemed via mobile wallets, streamlining the customer experience.
- Push Notifications: Use targeted push notifications to inform users about rewards and promotions relevant to them.
Benefits of Innovative Loyalty Programs
Implementing these innovative loyalty trends can provide numerous benefits for both brands and consumers:
- Increased Customer Retention: Personalized experiences and multi-tiered systems encourage customers to remain loyal.
- Greater Customer Insights: Data-driven approaches yield valuable insights for future marketing strategies.
- Enhanced Brand Reputation: Sustainability efforts and rewarding eco-friendly choices improve public perception.
Case Studies of Successful Loyalty Programs
Starbucks Rewards
Starbucks has effectively implemented a tiered loyalty program, where customers earn stars for every purchase. The program offers personalized rewards, exclusive deals, and gamification elements, keeping users engaged and encouraging repeat visits.
Sephora Beauty Insider
Sephora’s Beauty Insider program is another exemplary model. The multi-tiered structure allows customers to unlock exclusive products and experiences based on their engagement level. The program also integrates sustainability, offering rewards for recycling beauty products.
First-Hand Experience: The Impact of Loyalty Programs
As a frequent shopper, my personal experience with loyalty programs has shown me the value they add. For instance, I participated in a gamified loyalty program that encouraged me to try new products in exchange for points. This not only enhanced my shopping experience but also influenced my purchasing decisions, leading me to spend more than I initially planned.
Practical Tips for Implementing Innovative Loyalty Programs
- Start with Data: Analyze your customer data to identify preferences and behaviors.
- Test and Iterate: Launch a pilot program and gather feedback to refine your offerings.
- Keep Communication Open: Regularly update customers on their rewards and program changes to maintain engagement.
Conclusion
As we venture into 2024, brands must adapt their loyalty programs to meet evolving consumer expectations. By embracing trends such as personalization, sustainability, and gamification, businesses can foster deeper connections with their customers, driving loyalty and increasing revenue.
