Last Updated on10 minutes to read
Planning on starting a loyalty program? Loyalty programs are all about rewarding your customers for sticking with your business, but which rewards and incentives will work best for your brand’s loyalty program? We’re here to help you out with our rundown of iconic and innovative loyalty program incentives, including real-life examples.
How to Choose Rewards
First, let’s go over a few simple best practices for choosing loyalty program rewards.
Offer value to your customers!
- Your customers need to be motivated to participate in your loyalty program, so pick rewards that they will want to earn.
- Choosing rewards that align with customers’ regular purchasing habits, or rewarding them with your signature items, is a smart choice. For example, if you are a coffee shop, free coffees or other signature drinks are better rewards than hats.
- Also, consider personalizing the rewards you offer to each customer based on their needs and purchasing preferences.
Tie the reward back to your company, to give your customers an incentive to keep coming back.
- For example, you could offer discounts on your products, credits towards their next purchase with you, free products, free shipping, or exclusive sale access as rewards.
- Inject your brand’s unique flair into your loyalty program if you can, down to every reward you choose.
Balance quick and instant rewards with exclusive and highly coveted ones.
- Not every reward should be hard to earn. Consider having some elements activate instantly upon joining, to kick-start customers’ motivation.
- But pull out all the stops for the VIPs who make a large amount of purchases from you, with high-value incentives (think exclusive products or access to special events and experiences)
Make sure the rewards you choose are both enticing for your customers and cost-effective for your business.
- This will also come down to how you structure your loyalty program—how many purchases it takes to earn a certain reward. Strike a balance!
Now, let’s get into our list of loyalty program rewards, both the mainstays and the most unique ones we’ve seen.
A. The Iconic Rewards
These rewards are among the most popular and most successful loyalty program rewards we’ve seen. Customers love them!
One of the most popular rewards in the history of loyalty programs, this incentive works very well in the food and beauty spaces, as well as other industries where smaller, more frequent purchases are the norm. Who doesn’t love free stuff? And when the free item is your favorite sandwich, drink, or other product, loyalty programs become especially motivating.
Many “free product” loyalty programs offer a choice of free products as the reward.
The Chick-Fil-A One app is an awesome example. Customers earn points for the food they buy while using the app, and can redeem these points for free menu items of their choice, from strips to fries to salads.
Chipotle’s program is very similar, as points earned through their rewards app can be redeemed for a free entree of the customer’s choice.
And beauty rewards programs like Sephora’s and Tarte’s let customers pick which products they’d like for free in exchange for their points, both in sample sizes and bigger versions. In some cases, members will receive free samples just for being part of the program!
Giving a choice of freebies really increases the value of these programs in customers’ eyes.
Cash Back/Store Credits
Cash back and store credits are the other most popular rewards on our list (usually, loyalty programs treat these two rewards as virtually identical.) For every given dollar amount spent, customers participating in these rewards programs receive cash back to use on a later purchase. One example is the structure of Kohl’s Cash: “Earn $10 cash for every $50 you spend.”
Valuable discounts on your products or services will motivate your customers to keep coming back to your business. The trick, though, is to limit your publicly available discounts and give the best savings to your program members. Also, consider sending out customized discount coupons for the products and product categories each customer tends to purchase the most. Customers love this personalized approach, especially when you mention them by name!
Giving your customers a free treat on their birthday is a great way to make them feel valued—and convince customers to share their birthday, a valuable piece of demographic data for your company. Sometimes these birthday surprises are free products or branded swag, and sometimes they’re discounts or instant cash back. Pick what works best for your brand. And consider keeping the birthday incentive a real surprise, where customers only find out what it is when they receive it.
P.F. Chang’s rewards members with a free appetizer or dessert during their birthday month.
Meanwhile, Kohl’s offers a discount as their loyalty program birthday treat.
Some loyalty programs grant their members access to exclusive sales.
In some cases, only members of the program receive emails and other notifications about “secret” sales, so they’re the only ones able to take advantage of insider info.
In other cases (like with Amazon Prime’s Prime Day), everyone can find out about the discounts available to loyalty program members, but only members are able to cash in on these savings.
And in still other cases, like with Nordstrom, loyalty members gain access to certain big sales before the general public, so they can be the first to score the products they want at the best discounts.
Free shipping is another iconic loyalty program perk, and no other loyalty program does it like Amazon Prime (they don’t just offer free shipping; they get your shipments to you within one to two days, and sometimes even on the day you order. Now that’s service!)
This loyalty program perk offers rewards for shopping at multiple businesses under the same umbrella. Members of these loyalty programs can earn points for shopping at several businesses. All of these points are pooled together in one place, and customers can use them to redeem certain rewards.
Plenti was a popular example of this model, but they closed their program down in 2018. However, this model is still going strong in Shell’s Fuel Rewards loyalty program. Once you join the program, shopping at countless online retailers, dining at over 10,000 restaurants, and booking trips can earn you savings on Shell gas, in addition to extra gas savings for Shell’s best customers.
If your business is small, forming partnerships of Shell’s scale won’t be feasible, but you could always partner up with a single related, non-competing business in your area to offer joint rewards in your loyalty program.
B. The Unique Rewards
Think outside the box with unique loyalty rewards, or spins on rewards that only your business can offer. Check out our list for inspiration!
Exclusive, limited products
Take free product rewards to the next level with big-ticket items only available to your loyalty program members. The Zumiez Stash has embraced this strategy. They’re constantly releasing limited-edition collab products with some of the brands they sell, like skate decks, bags, clothing and accessories, which you can only access with loyalty points. Check out some of their previous exclusive rewards below.
Offering exclusive experiences is another way to reward your best customers and make your brand memorable. The key is to tailor these experiences to fit your brand.
Outerwear brand The North Face’s VIPeak program lets members redeem their points for adventures and expeditions around the globe, aligning with their brand focus on the outdoors and exploration in extreme conditions. Some previous rewards have included endurance challenge entries, camping packages in national parks, and climbing experiences.
And fashion brand Nordstrom’s The Nordy Club grants members access to beauty and style workshops; higher-tier members get priority access to fashion events, as well as exclusive access to the most coveted VIP events (see below).
First Access to Products
Letting your most loyal, enthusiastic customers be the first to try your new products is an awesome perk that poses unique advantages for your business. Your best customers are most committed to seeing your brand succeed. So, they’re the best people to share your latest products with, before you release them to the public! They’re often glad to give you feedback on these products, to help you make your brand better than ever. Sephora knows the power of early access, and reserves this perk for only their top-tier loyalty program members.
Sometimes, the best reward is giving back. Including a social good element in your loyalty program empowers customers and appeals to their desire to shop ethical brands. It’s especially effective if your donation element aligns with your brand’s mission and values. Also, consider offering program members a choice between multiple charities to donate to.
The Body Shop’s Love Your Body Club lets members choose to donate their $10 loyalty reward to Born Free USA or the National Parks Conservation Association (both conservation and animal welfare organizations), if they wish. This ties in perfectly with The Body Shop’s commitment to sustainability, in all its forms.
And Target’s new loyalty program, Target Circle, lets members vote on how the brand should direct donations to a series of worthy charities. The more purchases someone makes, the more donation votes they receive.
Mobile Experiences For Convenience
Some brands’ loyalty programs take advantage of the amount of time we all spend on our phones, and offer exclusive mobile and in-app perks to make using their brand even more convenient.
For example, Hilton offers a mobile check-in and room select option for Honors loyalty members, so they can access their rooms much faster and pick the rooms they want.
And Starbucks offers mobile ordering and payment in their loyalty app, for quick pickup of your favorite drinks. Order the drink you want in advance, and it will be ready for you right away once you get to Starbucks!
Cash Back…Towards Rent
Recently, an NYC start-up known as Stake created a rental loyalty program, with one of the most unique rewards we’ve seen. Stake app users get up to 5% of each rent payment back, in a personal account, as long as they pay on time. And people who choose to save at least 80% of the money in their account are rewarded with the greatest payback.
Rent is expensive, especially in NYC, so the fact that Stake users get some of their rent money back is highly empowering. It better enables them to save for their goals (including potentially buying their own property eventually). Plus, it gives them more insurance in case they’d ever need extra funds for an emergency.
This rent loyalty program concept won’t be applicable to most businesses, but it’s a great example of offering value to customers and empowering them, with a unique reward they appreciate.
Wrapping Things Up
Now that you’ve seen these iconic and innovative loyalty program rewards, it’s time to pick the incentives that will work best for your business. Check out our other articles for more tips on starting a customer loyalty program, and for tips on how to increase customer loyalty (beyond the loyalty program).