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If you want your retail store to stand out in a world of "everyday low prices," you have to think beyond price. Providing your customers with a unique, values-driven shopping experience can help differentiate your store from competitors and ensure a constant stream of returning customers. And one of the best ways to do this is with a customer loyalty program.


A customer loyalty program is simply one that rewards customers who frequently make purchases. With an effective program, you'll see higher customer retention rates for your biggest spenders and increase your customer's lifetime value by up to 30%. The best programs, however, create a system where customers feel like they're personally engaged with the company's mission.

StarbucksUltaAmazon, and REI are all examples of companies who have mastered the loyalty program. Customers return to these businesses because their programs have made shopping easier and, in most cases, a lot more fun.

REI's co-op allows members to join REI-sponsored trips, support charitable causes, and get access to member-only sales. At Starbucks, you can prepay for your Frappuccino before you even enter their store. Amazon Prime members receive free shipping on every purchase and free streaming access to movies and music. And at Ulta, glam customers strategize on how to reach the Platinum rewards tier for more savings.


These stores know that an investment in a customer loyalty program drives big revenue. And, it can do the same for your store.

Forbes reports that:

"Loyalty programs are proven to increase customer lifetime value by up to 30% or more by increasing visit frequency, increasing spend per visit, and winning back lost customers."

On average, it costs a business five to ten times more to acquire a new customer than it does to sell to an existing customer. And, those current customers spend 67% more than new customers, reports HubSpot. Further, SalesForce notes that, "68% of millennials say they wouldn't be loyal to a brand if it doesn't have a good loyalty program."

Need even more encouragement? A recent report from Bond Brand Loyalty, in partnership with Visa, found that:

  • More than 80% of customers said loyalty programs made them more likely to continue doing business with a brand
  • Over 60% of customers said they modified their spending habits to maximize reward benefits
  • Nearly 75% of customers said they would recommend brands with good loyalty programs


Unfortunately, a report from COLLOQUY also found that of the 29 loyalty programs an average customer is enrolled in, they tend to participate in only 12.

Why do customers stop using these programs? First, 56% of respondents noted that the program did not provide offers that were of interest. Another 54% said they would stop using a program if it was too hard to earn points for rewards.

Thankfully, there are ways to avoid these pitfalls.  


You will benefit from a well-designed loyalty program that your customers love to use. You'll encourage repeat visits, increased spend, and even referrals to friends. So, how do you create a loyalty program that really works?


Reduce your customer's barrier to entry as much as possible. Then, once they've joined your loyalty program, make it easy for them to use it.

Tie your rewards program to their email address or phone number so you can track their orders both in-store and online. Or, create an app that they can access on the go. At every step in the process, consider how it could be made easier for your customer.  


Customers love loyalty programs where they actually get tangible benefits, fast.

Offer a small gift right when they sign up, or create a points system where rewards add up quickly. These tangible rewards make the difference between an effective program and one that's quickly forgotten once your customer walks out the door.


Your customers love a sale, but use your customer loyalty program to think beyond direct discounts. Consider offering:

  • Personalized coupons based on their previous purchase history
  • Free shipping for members
  • Extra points for referring friends to your program
  • Additional savings on in-store sales

You can also try tiered systems, where more savings or a small front-end buy-in leads to bigger discounts. For example, both Sephora and give greater rewards to customers who spend more at their stores. Overstock's Club O even provides these additional benefits to veterans, teachers, and first responders at no extra charge.


As we mentioned in an earlier post, millennials value experiences over things. Your customer loyalty program will continue bringing back customers if you bring in fun and interesting rewards.

Try offering these unique experiences:

  • Free one-on-one design consultations with your in-store experts
  • Entry into big giveaways, like room makeovers
  • Early notice for sales, clearance items, or in-store events
  • Free gift-wrapping over the holidays
  • Small gifts that showcase new product lines or are tied to specific seasons
  • Exclusive, sneak peeks into new products
  • Charitable contributions tied to their purchases
  • Private member-only sales

Williams Sonoma's The KeyL'Oreal Paris, and Restoration Hardware are all good examples of experience-based customer loyalty programs.

If you have a customer loyalty program already, hit the comments to talk about what's worked for you!