THE CLARUS Blog

Why We Brought a New Loyalty Program Pricing Model to the Industry

What does it cost to build a premium loyalty program?

It’s a very common question because traditional loyalty programs have always had a large upfront cost associated with them.

We don’t charge anything upfront to build a loyalty program.

Many retailers don’t understand how our pricing model works because it’s quite different than what they’re used to. But we saw a need to bring a new model to the loyalty space.

Here is our simple, yet unique, pricing model explained:

 

Why the Traditional Loyalty Model Needed an Update

The traditional loyalty program pricing model typically follows this formula:

A retailer pays a loyalty vendor up to seven figures for a loyalty program. That is usually for the platform itself and additional consulting and customization can cost even more later.

The retailer hopes to see a positive ROI after a 12-to-18-month period.

If the loyalty vendor generates one customer or one million, they still get paid and make their money off the program build.

Our model is different.

 

Revenue Share Makes Sense for Modern Loyalty

Since the goal of a premium loyalty program is to provide the best of the brand for the best customers, we couldn’t simply charge an upfront fee and then leave our retailer partner to manage the program alone.

These programs are all about providing enough value that members engage constantly. And accomplishing that requires ongoing program management and optimization.

The traditional model just wouldn’t make sense there.

This offered the opportunity to bring in a new, simple revenue share pricing model which Clarus brought to the loyalty space years ago.

Read more about premium loyalty here.

In a premium loyalty program, consumers pay a membership fee to the retailer for access to enhanced 24/7 benefits.

In the revenue share model, Clarus simply makes its money from a percentage of those program membership fees that customers pay.

The retailer and Clarus share in the revenue.

It essentially takes all the risk off the retailer. We don’t make money unless the retailer makes money.

 

Our Loyalty Model Aims for Complete Alignment

Under our revenue share model, we aim for complete alignment.

By taking all the upfront costs / risk, we are showing our retail partners how confident we are in our loyalty solution.

In other words, we are truly putting our money where our mouth is.

We already have a robust loyalty platform called Momentum that we’ve been building and optimizing for nearly two decades.

This platform allows us to customize each loyalty program for our retail partners at scale.

We can be up and running very fast, typically, within 90 days. It also allows us to quickly launch pilot programs and build them over time.

It’s in our best interest to build programs that are so valuable, consumers are willing to pay to join them.

And once they’re in these programs, we want to keep them there.

That’s why we’re so focused on continued optimization from Day 1 of launch to infinity.

For the retailer, it means a low barrier to working with us.

 

Support Beyond the Launch

We do all the heavy lifting when it comes to building, managing, and optimizing the loyalty program.

No retailer wants to shift internal resources that can be generating revenue in other areas of the business.

With us doing the bulk of the work, it allows the retailer to continue to deploy its resources in their rightful spots.

But it’s more than just building the program.

When we launch a program, that is just the beginning. We continually work with the brand to evolve the program to stay ahead of the competition.

We don’t have a “set it and forget it” approach. We are true partners on every step of your journey with your customers.

And we don’t charge extra for additional services. There are no hidden fees.

Our retail partners receive an entire team of dedicated loyalty experts working on their programs.

With nearly two decades of experience, we’ve gained an exceptional understanding of what works in the paid loyalty space and what doesn’t.

We bring that experience to bear for you, helping you build a sustainable, profitable pricing model, test in new creative and offers, and gather actionable data on your best customers.

 

Everyone Wins with a Revenue Share Model

The goal of a premium loyalty program is not simply to generate signups.

It’s to get your best customers more engaged and connected. And ultimately, our goal is to help make them brand advocates.

With our revenue share model, we’re all incentivized to optimize and scale the program to achieve sustainable success.

The more engaged your program members are, the more they are loyal to the retailer. At the end of the day, we all win.

As we like to say to our retail partners: Give us a chance and we’ll show you what we’ve got!

 

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