Half of consumers that belong to a tiered loyalty program report altering their purchasing behavior to unlock access to a higher membership status. Therefore, brands have an incentive to give loyalty privileges to big spenders. L2’s Insight Report on Loyalty Programs finds that all luxury and department store brands in the study have tiered loyalty programs.
But how should brands keep members interested? Tangible rewards such as discounts are one way, but consumers can also be swayed by access to special events and superior service. A study by Colloquy shows 62% of mid-tier loyalty program members and 57% of highest-tier loyalty members are motivated by access to special events. Likewise, receiving superior service motivates 79% of mid-tier and 74% of highest-tier loyalty members.
Prestige brand Nordstrom rewards its level 3 and 4 members who spend more than $5,000 a year with private photo shoots, designer meet-and-greets, and visits to watchmaking factories. Best Buy offers a higher level of service to its elite members: 45-day return policy (vs. 30 for non-members) and access to special sales.