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Getting customers to return: Customer experience success stories

Retailers know how important it is to keep loyal customers happy but many a retail membership program has become white noise to consumers. How do companies make their loyalty program stand out?

Photo by iStock.com

June 7, 2019

By Brooklin Nash, writer, CandyBar

Businesses know how important it is to keep loyal customers happy. This is why the average consumer is invited to join a membership program every time they go shopping.

Membership programs become white noise to consumers. The average shopper already participates in 14 loyalty programs — but can't engage with more than half of them. How do companies make their loyalty program stand out?

They offer real, meaningful value.

Customers expect to rewarded for their loyalty. They believe that benefits aren't just perks — they are what regular customers deserve. Anything that does not add value to their customer experience is just not worth their time and information.

Today, value does not mean freebies (though those are fun too). Value means better multichannel shopping options, exclusive experiences or advice, respect as a stakeholder in a company, and feeling like they are part of a community doing good.

Customer loyalty programs can never replace an entire customer experience. They simply enhance it. These three companies understand customer experience and use their loyalty programs to offer even more value to their customers.

Nordstroms' Nordy Club

Nordstroms grabbed industry attention last fall with the release of their revamped loyalty program. Though the retailer's previous loyalty program already had more than 10 million members, Nordstroms knew they could improve.

The Nordy Club is a tiered membership where participants earn points and benefits for every purchase. Tiers are organized by Members, Insiders, Influencers, and Ambassadors. Members, customers who spend less than $500 per year, have priority access to shop first with select brands, access to beauty and style workshops, free basic alterations, curbside pickup, and can reserve clothes online to try in store.

As customers enter higher levels, they receive even more enticing and experiential benefits. Ambassadors, those who spend more than $5,000 per year, even receive in-home stylist services.  

The Nordy Club places special emphasis on personalization. Members can upload their own portrait, receive individualized content, deals, and personal double point days.

Dave Sims, VP of Loyalty and Retention, says the team uses A/B testing to learn what content customers react to more. Push notifications were found to encourage 10x more customers to make purchases.

The Nordy Club is all about personalization, bridging the gap between eCommerce and brick and mortar retail, and giving non-monetary advice and quality experiences to customers.

REI Co-op

REI has always been an outdoor cooperative, owned and operated by co-op members. Customers are encouraged to become co-owners simply by paying a $20 fee for life time membership. Customer retention isn't encouraged by spending and points-based rewards. Loyalty is fostered by becoming real and respected stakeholders in a company that members believe in.

Members receive annual 10% dividends, special offers, access to in-store “garage sales,” and special pricing on classes, events, and global adventure trips.

At the heart of REI, is a community of people who enjoy and protect the environment. REI currently has about 17 million members and gives almost 70% of its profits back to employees, members, and nonprofits that support outdoor protection and responsible recreation.

When people become members of REI, they know they are not just joining just any store—they are joining a welcoming community who shares a love for the environment. Experiential incentives and personalized deals are part of this program, but the true value of being a REI member is the feeling of being a respected partner who is contributing to environmental enjoyment and stewardship.

Sephora Beauty Insider Program

The cosmetics retailer, Sephora, offers customers their Beauty Insider Program. This loyal member program, accessed through a card or mobile app, is broken up into three tiers: Insider, VIB, and ROUGE. All members receive points for every purchase—the higher the tier, the more points members earn per dollar spent.

Basic membership rewards include in-store beauty services, trial-size products, free beauty classes, and access to a community of people who enjoy exploring beauty. Members can redeem their points at rewards bazaars that take place every Tuesday and Thursday.

In addition to receiving more rewards, ROUGE members have free shipping, early access to products, and are invited to exclusive events.

The Beauty Insider Program does personalization well. Members can upload information about their hair, skin, and complexion. Their profile combined with previous purchases enables the app to offer personalized product recommendations they know their customers will love. This enhances the customer experience.

Key takeaways

Programs must be designed to actually offer something of real value to customers. In years past, companies thought free products would be enough to incentivize customers to come back. As customer preferences change, this no longer holds true.

Value manifests itself in enhanced cross-channel experiences, blending digital personalization with human connection, and giving customers the feeling that they are part of something bigger.

Companies must remember that their priority should always be to improve the customer experience. When loyalty programs play a part in enhancing the customer experience, shoppers will notice.