With the right tactics, loyalty programs can be Trojan horses for gathering consumer data. But without the right incentives for consumers to share their data, these programs can be nothing but cost centers offering discounts ineffective in conversion. Perhaps this is why just 40% of brands in L2’s Digital IQ Index have loyalty program. Here, we’ve gathered information about top performing loyalty programs and what makes them unique.
Starbucks: Starbucks’ loyalty program boasts 12 million active members and growing. In Q2 2016 alone, the company added one million new members. The constant growth of members lies in the coffee giant’s ability to deliver targeted offers using purchase behavior. For example, if a Starbucks customer frequently purchases drinks and never buys food, the program notifies them about a deal for purchasing a sandwich or pastry and a drink at the same time. Frequent in-app purchases are also rewarded, resulting in 24% of purchases happening in the app.
Harry’s: The online-only razor company invests heavily in targeting and retargeting display advertising, accounting for 20% of indirectly purchased US Personal Care ad impressions. Harry’s alters ad copy, content and landing page at each stage of the purchase funnel depending on their behavior history. For example, if a consumer has visited a site just once, the brand serves a generic call to action ad with the copy “Try Harry’s.” The promoted link bypasses the Harry’s homepage and directs shoppers to a free trial. New consumers that have never visited the Harry’s site are directed to the brand’s flagship product.
Sephora: Sephora sells skin care and cosmetics, categories in which personalized recommendations are particularly important. Sephora makes relevant recommendation leveraging purchase and browsing history and adapting site content to maximize effectiveness. For example, Sephora recommends a contouring kit on the home page if the user has favorite other contour products. Noting that users tend to be brand loyal when purchasing a fragrance, Sephora recommends past purchases. In skin care, Sephora recommends products based on the user’s skin care concerns. In addition to these tactics, Sephora places recommendations as the first thing a site visitor sees.