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Successful Customer Loyalty Programs in Retail & E-Commerce

Customer retention and churn rate reduction are two critical aspects of successful businesses. It is more costly to build a long-term business relationship with a new customer than to cultivate the loyalty of an existing customer. And according to Accenture, businesses lose $1.6 trillion per year when customers move away from them.

Are Customer Loyalty Programs Successful?

Many retailers have put customer loyalty programs in place to tackle these two important aspects of the business. Are they successful? Some are and some aren't. It depends on many aspects. Interested in those that have worked, I looked into some examples of highly rated customer loyalty programs by some of the most prominent retailers.

Starbucks Rewards 

It's been years since Starbucks innovated with a mobile app that also acts as a reward program for their customers. Not only are they taking customer experience to a new level, but the popular coffee brand is giving perks to their customers and repping the benefits for it. 

Starbucks recently announced a 10% growth and record revenue and it is not a coincidence that their loyalty program has grown to 15% more members since the year 2017. Currently, Starbucks Rewards has 15+ million members.

starbucks_loyaltyprogram


Sephora - Beauty Insider

Another super well-known loyalty program that is standing out in retail and e-commerce is Sephora's Beauty Insider. 

Surpassing 10 million members, they are winning at customer experience by capitalizing in personalization. Yes, as part of their Beauty Insider program, customers receive personalized product recommendations as well as accumulate points per the amount of money they spend and have various tiers or statuses that they can aspire to.

sephora_loyaltyprogram


Urban Outfitters - UO Rewards

Expected to report sales of $968.80 million for the current fiscal quarter (according to Zacks), Urban Outfitters is another on the line of success and growth - and their loyalty program may be weighing in on this accomplishment. 

Aside from collecting rewards from purchases, their innovative loyalty program allows members to earn points even by sharing on social media or attending some of their events. It also includes the opportunity to get signed merchandise from celebrities and special discounts. 

urbanoutfitters_loyaltyprogram

Is a customer Loyalty program suitable for all?

Probably not. It will depend on the type of program, the customer base, and the benefits that come from it. However, these 3 success stories do provide some inspiration and ideas for other businesses that want to take their customer experience (and their revenue) to the next level. 

Customer Loyalty programs such as the ones mentioned in this post have proven to increase customer retention and happiness. It is another strategy to research and implement when trying to extend the lifetime value of customers. 

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