Brands are Seeing Success With New Loyalty Programs (Here’s Why It’s Working)

February 28, 2022

If Taco Bell’s new taco subscription tells us anything about loyalty programs, it’s that consumers are hungrier than ever to go all in with their favorite brands, especially brands who not only allow them to earn compelling rewards, but those who also “meet” them where they exist most today: online. Brands globally, large and small, are now serving up dynamic and seamless loyalty programs to capitalize on their most engaged customers. And, it’s working.

Members that have signed up for a loyalty program generate notably more in revenue than non-members. 

Technology (specifically, the introduction of social media and apps) has led to a new chapter for loyalty marketing. Now, brands can get hyper-focused on the action they want their customers to take. Likes, comments, check-ins, tags, digital payment. All customer touchpoints are on the table for marketers as business needs change.

Because loyalty programs are as dynamic as ever, brands can pull back on one lever of the program to bolster revenue or push forward with engagement when they want to pour into their brand advocates.

Serving many purposes, loyalty programs can be used for:

  • Customer retention
  • Bringing customers back for repeat purchases
  • Investing in long-term customer relationships
  • Keeping customers happy
  • Adoption of mobile app/digital payment
  • Standing out from competitors
  • A revenue boost

On the flip side, customers, too, have choices as to how they can engage and express their loyalty.

Opting into a new loyalty program can look different between two customers. One might want exclusive access to a product or to support a worthy cause while the other might want free stuff. Customers are earning more and more from their programs.

Keeping it fresh, however, is the ultimate challenge for brands and the ultimate reward for customers. It’s about reaching customers in new ways.

While points-based programs have been a tried-and-true loyalty model, especially in the food and beverage industry, marketers are no longer hanging their hats on the point-centric system. Modern multi-point programs foster loyalty, engagement and brand advocacy by utilizing a combination of:

  • Cause-driven messaging
  • Subscription service
  • Exclusive community & perks
  • Referral program
  • Email sign up
  • Text message offers
  • Mobile-based services

Loyalty Programs That Work

McDonalds is one of the most recent and notable success stories when it comes to loyalty marketing. In its digital app, customers (referred to as members when they sign up for the app) can earn points with every order, which they can exchange for menu items and prizes. According to McDonald’s CEO Chris Kempcziski, “Loyalty is the single biggest driver of digital adoption and MyMcDonald’s Rewards has exceeded expectations in terms of enrollment and participation.”

After debuting in the US, they accrued 30 million enrolled members and 21 million active members earning rewards.

On the flip side, brands like Adidas and Fitbit boast loyalty success with more robust programs that include community-driven perks. Members of the Adidas Creators Club get exclusive access to product launches, special events and the ability to earn points by giving back. Beyond exchanging points for products, members get to emotionally connect with a brand they love. 

screenshot from screenshot taken February 2022

Fitbit is another example of this kind of emotional connection to a brand. Fitbit builds up its community by making it easy for members to connect with each other and cheer each other on in their fitness journey. The company has even experimented with brand crossover within its paid membership service where members can earn points for their fitness activity and redeem with another brand.

Whether it’s seen as loyalty or engagement, the goal of a loyalty program is to turn a first-time buyer into a repeat buyer and a repeat buyer into a brand advocate. This kind of sustainable customer retention strategy has proven successful when done right.

There’s no denying that multi-channel loyalty programs are here to stay. Customers have the opportunity to gain even more from the brands they love and become lifelong loyalists. If you’d like more information about how we can help you build a successful loyalty program, reach out to us at Commit Agency today.