rewards program

Start Building the Perfect eCommerce VIP Loyalty Program

VIP programs are great loyalty programs that offer extra business benefits because they help your customers to be more loyal. This program works extremely well for cosmetic brands, fashion houses as well as luxury brands such as Starbucks, L’Oréal, Sephora etc. It offers an amazing way of boosting customer engagement and enrollment in your brand’s loyalty program. Outlined
below are the five tips that you can use to create the best VIP –Program for your business.

1. Ensure the Highest Tier is Exclusive

The main aim of loyalty programs especially the VIP is to make your loyal customers to feel more valued compared to the average shopper. In order for you to create a high-quality rewards program that is effective, ensure that your highest tier is exclusive because this is what will help to make the top tier shoppers feel very special. The number of the VIPs in the top tier depends on the number of tiers you have in your rewards program. For example, if you have a three-tier system, the exclusivity of the VIP should be around five percent and if you have a two-tier program, the upper tier should have an exclusivity of 25 percent. Note that the VIP program shouldn’t be easily accessible to a lot of people because it will lose its value and effectiveness. All VIP card holders normally want to sit on top and feel like they’re the only chosen few.

2. Use a Three –Tier Loyalty Program

The number 3 is usually regarded as the magic number and not only can it be traced back to the ancient religious stories, it is also considered as the first number that’s used to form a group hence it’s the number of tiers that we would recommend if you want to create an effective VIP loyalty program. A three-tier VIP program helps to ensure that the top VIP tier can still be accessed but only to the few customers who are consistent. It helps to separate general members from loyal members.

3. Set Attainable but Challenging Milestones

A reward milestone is what the customer has to achieve in order for them to qualify for the next VIP tier in your loyalty program. For instance, a top-tier milestone of $1,000 for most businesses is achievable to a small percentage of customers even though most people will still try to reach this target. However, a milestone of $100, 000 is so high and seems unattainable hence many people will not even attempt to achieve it which will render it a useless and ineffective milestone.
Create an effective milestone that is based on earned loyalty points. Your customers will be rewarded based on the purchases they make in addition to other profit-making actions resulting into an amazing combination that triggers milestones. The reward points system helps to keep customers engaged in the loyalty program by assisting them in visualizing how far they’ve come and what more they need to gain in order to get access to the next tier.
One way of determining the milestones of the program is using the customer data. Analyze the yearly spend or the average lifetime spend by the five percent loyal customers in the top tier then convert that figure into points. It’s these points that will be used to determine the top VIP milestone. This helps to ensure that the milestone is attainable without it being too easy for everyone giving each VIP Tier a milestone level that effectively maximizes on spending.

4. The Tier Names Should Reflect Your Brand

A loyalty program is by default an extension of your business hence it is important to name your loyalty program, the VIP tiers and reward points using names that are synonymous with your brand. Each tier in the program should have a unique name which has relevance in the industry your brand is in. For instance, the e.l.f’s rewards program for “Beauty- Squad” uses an amazing and impressive loyalty program that reflects the beauty industry. Also, the name of each tier feels more prestigious compared to the previous i.e. the “ Glow –Getter “ for the first tier, “Rising-Star” for the middle tier and the “ A-Lister” for the top tier hence one gets the feeling that they are moving up in the program. Generally, the loyalty program should help to ensure that the customer has an overall great experience with your brand.

5. Display the Tier Progress

Customers usually love to see how far they’ve come and how much more they need to go in order for them to acquire the VIP Status. It’s important for you to have a loyalty program that displays the customer’s tier progress and their current tier status. Because no customer wants to fall short of their next tier goal, a tier progress will act as the best motivational- tool which they can use to visualize their progress by increasing their spending to ensure that they attain their next target.

Another great engagement–tactic that you can use with your loyalty program is setting the points to expire after one year. This way, your customers will have a specific time frame to act on, leading to an extra nudge in spending. This together with the progress – indicator form a powerful tool which helps to increase customer spending and repeated purchases as they try to acquire more points.

Loyalty programs provide the perfect blend of customer experience, customer retention, and gamification. They help companies to retain customers and make more sells while customers are bound to enjoy their shopping experience and gain rewards that are status –based. With the current ultra-modern technology, many businesses are competitively trying to outdo each other with their different loyalty programs hence it’s important for a brand to effectively design one before rolling it out to its customers. To help brands design unique and rewarding loyalty programs, Edenred Singapore is one of the companies that you can use to bring the right connection to your business. We use innovative ideas and plans in designing and implementing loyalty programs that will produce rewarding and positive life-long partnership with your customers.