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Four Brands Changing Customer Loyalty

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By Jeff Sopko

Loyalty isn't static. It's constantly shifting and evolving with customer expectations, technology disruptions, and innovations.

Some brands are on the cutting edge of loyalty, keeping up with the ebb and flow of the industry. Each year those brands change as newcomers usher in new strategies to reach customers. And with each change, it also shifts the dynamics of the loyalty world for everyone else. Here's a look at four brands implementing innovative programs that are changing the way we view loyalty today.

A Program Bigger Than the Sum of its Parts: Sephora

Sign-up is simple with methodical acquisition tactics. It's technically sound with demarcated tiers easily communicated to the customer. The program utilizes customer insights to influence strategy and a strong program structure to bring it to life. Together, all those pieces culminate in superior customer motivation that stays within the Sephora brand identity and connects with members in their own environments.

The V.I.B. tier is a work of art. Very few brands create something that's truly bigger than themselves, but Sephora's highest tier is a status symbol where dollars spent equates to beauty. That is how you cultivate customer loyalty.

Expansive Rewards: Amazon Prime

Amazon provides so many perks and rewards through Prime memberships, most people don't even realize what it offers. The well-known benefits of free two-day shipping, every-day discounts, and the apex in Prime Day — yes Amazon basically has its own holiday.

But Amazon's rewards program offers so much more: unlimited photo storage, a library of free movies and TV shows through Amazon Video, even faster delivery through Prime Now's two-hour service, and a host of other benefits. Amazon will corner the market by making convenience the primary consideration for shopping.

How Amazon brings rewards to the grocery industry in its recent acquisition of Whole Foods will be more intriguing. Grocery chains lack innovation in membership and benefits; expect Amazon to exploit that early.

Paid Program Worth the Price: GameStop

Gamers are a rabid fanbase. They're heavily invested, educated on the programs, and they know what's worth their time. That makes the GameStop Power Up Pro tier so fascinating since it's a paid membership each year.

GameStop understands a complex segment of customers and provides rewards, and rich soft benefits to expand its base to impressive numbers. For many gamers, the paid subscription gives them the bang for their buck in magazine subscriptions, broad evergreen product discounts, collector's items, and better points velocity.

The company has shown that, outside of Amazon, other brands can have success with paid memberships, as long as they realize the program needs to be mutually beneficial to the customer as well. More money upfront means better rewards over time.

Massive Scale at the Micro Level: Marriott Rewards

Marriott has a behemoth program. The brand combined three mega-programs into one through its acquisitions of Ritz-Carlton and Starwood.

What makes Marriott's program successful is that it understands travel better than anyone. Not everyone wants the dream vacation after years of saving points. Some travelers want practical rewards.

Marriott gives members attainable perks for their day-to-day such as late-checkout, no blackout dates, transitioning points into frequent flyer miles, guaranteed rooms, complimentary room upgrades, and increased earn velocity.

Marriott Moments is a new service under the rewards umbrella that focuses on experiences over traditional rewards. It has immense potential for the customer experience. It provides large and small experiences customers can take advantage of through their memberships, ranging from concert tickets to swimming lessons at an Olympic training center.

It's an evolved approach to loyalty that isn't dependent on the hotel, but provides a range of options that encourage customers to become members in a way that's more tangible and relevant.

It's All About the Customer

If one tenet holds true for each of these brands, it's that they all understand their customer bases and aren't afraid to create new, innovative ways to reach them that haven't been tried by their peers. It's why they're leaders in their respective industries. Loyalty isn't stagnant because the customer is always changing — and these brands are keeping up.

Source

"Four Brands Changing Customer Loyalty." MediaPost, 9/14/17.

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