THE CLARUS Blog

Most Consumers Will Pay to Join Premium Loyalty Programs, but What About Your Existing Program?

According to our 2021 Premium Loyalty Data Study, 76% of consumers would pay to join a premium loyalty program.  

These programs are becoming more popular with consumers because they provide them with instant, 24/7 access to top-tier benefits. This builds and retains greater loyalty and trust with your customers. 

According to a McKinsey studymembers of premium loyalty programs are 60% more likely to spend more on the brand after subscribing, while free loyalty programs only increase that likelihood by 30%. 

Since premium loyalty programs drive higher purchase frequency, basket size, and brand affinity compared with free loyalty programs, paying members can be worth several times more than non-paying members – aside from revenue from membership fees. 

In fact, 79% of consumers say they don’t want to accumulate points anymore and retail loyalty programs should provide immediate benefits to maintain their loyalty. 

 

Consumers Are Telling You They Want to Join a Premium Loyalty Program 

The appeal of premium loyalty programs is clear. 

According to our 2021 Premium Loyalty Data Study, 90% of respondents said they’re likely to choose a retailer where they’re a premium loyalty member over another one offering a lower price. 

That statistic characterizes the unwavering commitment of premium loyalty members. 

Also, 81% of traditional loyalty program members would join a premium loyalty program at their favorite retailer if the benefits were valuable. This figure jumped 14 percentage points from 2020. 

Consider 71% of consumers in 2021 belong to traditional loyalty programs. Of consumers who belong to traditional loyalty programs, a majority (68%) belong to one to four programs, and almost a third (31%) belong to five or more programs. 

 But the takeaway here is many of these traditional loyalty program members aren’t very active.  

Many of these consumers don’t use their traditional loyalty programs frequently enough to get much benefit out of them (i.e., by accumulating points). Almost three-quarters (73%) of respondents use 50% of those programs each month, and 5% don’t use any of those programs on a monthly basis. 

 These statistics reflect the great opportunity for brands that want to achieve greater loyalty and engagement by giving customers the option of a premium loyalty program. 

 

Retain More Members with a Premium Loyalty Program 

Nearly two-thirds of consumers say their loyalty is more difficult for retailers to maintain than ever before. 

Yet 94% of premium loyalty members shop at that program’s retailer at least once a month. 

That’s true devotion that a brand can count on. 

Nearly three-quarters (73%) shopped more with retailers whose premium loyalty programs they were part of during the pandemic, and 41% shopped significantly more with those retailers.  

When nearly 100% of your program members shop with you at least once a month, and many more frequently than that, your brand is top of mind for your best customers. 

Your members are so devoted to the program that customer retention becomes almost automatic. 

 

But What About Your Points Program? 

While it’s clear from the data that consumers are interested in premium loyalty programs, your existing points program still plays a critical role in your overall loyalty strategy. 

Offering a premium tier can attract many of your traditional members, besides enticing new members as well. 

Traditional loyalty programs are great for your acquisition efforts. By offering a premium tier, you can create an aspirational goal full of attractive benefits. 

Points programs are great for collecting zero-party data, which is data consumers intentionally share with you. This data will become critical as cookies will eventually go away. 

Being a member of a traditional loyalty program creates a bond with that retailer. Emotions form in consumers that lead to strong two-way relationships. 

You are getting the best of both worlds by adding a premium tier to your traditional program. Your free program gets members in the door and your premium tier transforms them into brand advocates. 

A premium loyalty program targets the top tier of your customers. The goal with premium loyalty is to get your best customers engaging more and spending more when they do by offering them benefits that a free program can’t match. 

A premium loyalty tier allows a brand to offer benefits that extend beyond typical transactional incentives. These benefits include fast, free shipping and member-only exclusive events. 

With a traditional program and premium tier, your brand stays top of mind.  

 

Complement Your Free Program with a Premium Tier 

Ninety-five percent of retailers have talked about launching a premium loyalty program this year. 

As a retailer, you’re challenged to earn and retain customer loyalty at a higher rate. 

It’s a challenge because consumers have so many more options, just a click away, and they seemingly hold all the cards. 

Combining a free, traditional program with a premium tier is giving your customers the best options. This can also make your best customers significantly better and move some of your traditional members to your premium tier. 

Consumers want options. You can give them a key option they desire: A premium loyalty program. 

It’s your move. 

Are You Ready to Go Premium?

If you want to become a 24/7 presence in your best customers' lives, it's time to get started.

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