Business Loyalty Programs

Global Resources is a full-service business development group and general management consulting firm focused on small and medium-size privately-held companies in North America. We help business owners access the information that is often necessary for growth.

Many businesses have been growing by creating successful loyalty programs for customers.  Here are tips, along with examples of how big-name companies have implemented these tactics: 

1. Integrate loyalty into the full experience:  Starbucks, the brand that created loyalty by differentiating the ordinary experience of drinking coffee, has also managed to create a strongly differentiated loyalty program. To do this, the company integrated payments and mobile technology with the Starbucks shop experience to make the transaction more enjoyable. 
2. Use the data: The Target REDcard combines loyalty and a valuable discount program – 5 percent at the point of sale. They have moved past the flat “discount-only” model by building out industry- leading data capabilities, using the data to target highest-value consumers (e.g., future moms). 
3. Solve customer and industry pain points: Amazon’s largest success in loyalty is built around solving one of online shoppers’ primary pain points: delivery. For $79 a year, members of the online retailer’s “Prime” program get free two-day shipping, plus free digital content. Prime not only integrates tightly with Amazon’s customer and convenience-focused brand, it also creates a loyalty program for suppliers, who rely on Fulfillment By Amazon for access to Prime customers. While Prime’s stand-alone profitability is a closely guarded secret, it is estimated that members spend over four times more with Amazon than non-members. 
4. Maximize difference between perceived value and real cost: Like most hotel loyalty programs, the major focus of the Starwood Preferred Guest (SPG) program is to attract high-value travelers by offering rewards for personal leisure travel. Redemptions generally occur on weekends, when these hotels have relatively low occupancy and incur limited incremental cost. Starwood has also developed a series of offerings (e.g., upgrades, flexible check-in, Internet) that are highly valuable to their top customers, but bear little marginal cost. Overall, Starwood’s loyalty program has improved its brand appeal and helped the chain achieve above market growth, despite relatively low overall guest satisfaction scores. 

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