THE CLARUS Blog

Why the CVS Paid Loyalty Program is a Step in the Right Direction

With Amazon’s impending entry into the pharmacy business with PillPack, CVS is stepping up by entering the paid loyalty arena.

Just after Wayfair recently announced its premium loyalty program, CVS Health announced plans to launch a pilot membership program that provides delivery perks, discounts, and $10 monthly to spend in its stores. Titled CarePass, the new membership program will initially be rolled out in about 350 locations in the Boston area.

Program members will pay a $5 monthly fee or $48 for an annual subscription.

In a release, CVS Pharmacy President Kevin Hourican talked about the thinking behind the new paid loyalty program.

“We are committed to designing and testing innovative programs that meet our customers’ health needs whenever, wherever, and however they want,” Hourican said. “The CarePass pilot program in Boston offers our customers an additional level of benefits and services that make it easy to save time, save money, and receive access to on-demand pharmacy care.”

According to the company website, the membership program includes free one-day or two-day delivery on certain prescription drugs and “eligible purchases” with no minimum amount required.

Launching a paid loyalty program is a smart move for CVS because it provides an ancillary revenue stream, allows company officials to gain better insights on their best and most loyal customers, elevates customer engagement, creates a culture of instant gratification, and builds deeper and stronger two-way relationships.

 

Standing up to Amazon

Earlier this year in a move that could have a major impact on the pharmacy industry, Amazon purchased online pharmacy PillPack for $1 billion.

Could the next step for Amazon be delivering prescriptions to your door, and maybe even including these types of deliveries in its long list of Prime benefits? This makes a lot of sense for Amazon, considering its entry and expansion into the grocery category.

Amazon’s acquisition of PillPack, however, could spell trouble for pharmacy chains like CVS. But, with the new CarePass paid loyalty program, CVS will offer program benefits like free shipping on some prescriptions. This could make it easier for CVS to compete against Amazon.

Consumers still desire rational benefits such as free shipping and discounts, and the CarePass program meets those expectations. The fact that program membership includes $10 monthly for consumers to spend at CVS stores is a great benefit that is attractive and relevant.

 

The Future of CarePass

Although rational benefits are still critical, emotional benefits are needed as well. Loyalty marketing should focus on retention, since this method focuses on and rewards your best customers.

To create true loyalty today, brands need to take a more personalized approach that helps build emotional connections.

Offering more experiential benefits is crucial to creating emotional connections with customers. As a result, those customers become a retailer’s Holy Grail: Brand advocates.

In the case of CVS, can company officials make the in-store experience more attractive for members?

Maybe create a fast lane for prescription pickup? Host special in-store events just for members? Or hold member-only monthly drawings that reward x number of customers to receive extra discounts?

It’s those emotional experiences, often derived from experiential brand events, that go a long way toward creating your most loyal customers.

See why loyalty matters more than ever.

 

Premium Loyalty is a Prescription all Brands Should Follow

In this retail world that often seems dominated by Amazon, CVS made a smart move by launching the CarePass paid loyalty program.

Premium loyalty is all about focusing on your best customers, truly listening to them, identifying and addressing their pain points, offering them attractive and relevant benefits available 24/7, and simply treating them special.

It offers the benefits that customers want. As a result, a brand’s best customers become even more loyal and valuable. Premium loyalty programs allow brands to meet and exceed customer expectations, gain keen behavioral insights, and forge lasting two-way relationships.

These programs are more profitable for brands, and more engaging and valuable for customers.

See how brands are rethinking retail with premium loyalty.

While material benefits are certainly important to customers, they also want to receive special treatment.

We think that CVS, perhaps with an eye toward more experiential benefits, is well on its way toward creating these special types of customer relationships through the CarePass program.

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