THE CLARUS Blog

What Do Customers Think About Premium Loyalty?

We talk a lot about paid loyalty from a marketer’s or retailer’s perspective. We talk about putting the customer at the center of everything we do.

But what do customers think about it? How do they feel? 

Here are the three things that customers are thinking about your membership-based loyalty program. 

 

1. Is Your Loyalty Program Valuable to My Life? 

When customers think about spending money, what does it all come back to? 

Value. 

They’re willing to pay for something that they like and value. That’s just customer behavior. They’re not going to pay for something that they don’t want, don’t use, or don’t value. 

Think about some of the programs that you belong to.  

It could be a gym membership, or maybe a meal delivery service. Maybe it’s your subscription to Netflix or your Prime membership.

Which ones are getting renewed and why? 

Customers will happily raise their hands and sign up for programs that add value and importance to their lives. 

That’s where we start to get into the difference between transactional and experiential benefits. 

Any brand can offer points, discounts, and free shipping. And while those benefits do add some value, they don’t do a lot to offer customers an experience they can’t find anywhere else. 

Look at Starbucks Rewards. In addition to the points and discounts, members can order ahead and pay on mobile. To your busy customers, not having to wait in line is highly valuable and important. The program is hugely successful.

That’s why we have to craft and customize these loyalty programs, so they add importance to the consumer’s life. 

 

2. Does Your Loyalty Program Make My Life Easier? 

It’s not enough to offer points in exchange for purchases. 

We have to get to know our customers enough to understand their pain points. 

When Amazon launched Prime, it focused on free shipping because that was the hardest part about shopping online. 

Now, free shipping is expected, and Amazon has adapted. Amazon makes it easier to shop online for groceries and get them delivered.

It makes it easier to watch movies and listen to music. Amazon is strategically becoming a part of daily life for over 100 million members

So, when you’re thinking about your customers, you must ask: What are their pain points? 

Customers will ask, “How can this program help me through those?” 

That’s the pivot. 

 

3. What’s a Premium Loyalty Program? 

We use a lot of industry language. It helps us to differentiate between different concepts and strategies. In the loyalty space, we terms like paid loyalty, membership programs and subscription loyalty. 

Here’s why we call these membership programs premium loyalty

But while these terms are important to us as retailers and marketers, consumers don’t care as much about the term as the value their getting. This isn’t about a customer saying, “Oh, I have a premium loyalty program!” or, “This is just a loyalty program, or a points program.” 

It doesn’t matter. They aren’t as aware of these industry terms as we are. 

They just think about value, importance, and how these programs make their lives easier. If they don’t fit those criteria, they’re out. 

 

The Bottom Line for Loyalty

The bottom line for the customer is this:

“Is this program I belong to important to my life and does it add value?” 

And if the answers are no, then they’re not going to stay in it. 

At the end of the day, we, as retailers, need to make sure we’re giving our customers such an amazing experience that they renew again and again. 

So, call it what you will. To your customers, it doesn’t matter. Just add value. 

As much as we talk about loyalty programs as retailers, they’re not for us. They’re for our customers, aren’t they? 

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