loyalty programs

It’s no secret that loyalty programs were born in a retail environment. The idea was to create repeat customers by offering incentives for purchases made. The more engaged you are with the brand, the more the reward. This same principle applies to nonprofit loyalty. The key difference is the motivation behind the support. I might buy my coffee from the same shop each week because I like to support local businesses, and of course, it doesn’t hurt that I get a neat little punch in my paper card for each cold brew I buy. Twenty punches later, and I’ve scored myself a free beverage. But this is no comparison to the money and heart I put into supporting my favorite nonprofit organizations. Throw in an incentive, and that organization has just gotten my attention and held it.

While Nonprofit and retail loyalty programs often have many noticeable differences, I want to examine some of the best loyalty programs out there and what makes them work. These programs vary from point systems to punch cards to paid programs. Here we break down five of the most successful and noteworthy:

  1. Marriott
    The Marriott Bonvoy program is one of the largest hotel rewards programs in the world and encompasses 30 brands. This program has five levels of status: Silver, Gold, Platinum, Titanium, and Ambassador. Each level is achieved by racking up your number of stays and comes with various rewards like high-speed wifi, late checkout, and premium room selections. It’s free to join, and those points can be redeemed for future stays. This program is easy, which makes it appealing for travelers and offers a ton of potential for earning points.
  2. Barnes and Noble
    For $25 a year, Barnes and Noble members can get 40% off on hardcover bestsellers, 10% off in-store purchases, and free express shipping on all online purchases. This loyalty program model is a great example of how a paid membership can keep consumers making return trips. Barnes and Noble hook booklovers by showing them that the benefits and savings greatly outweigh the annual cost, using language like “for $25 a year, receive $60 worth of coupons just for joining.”
  3. Starbucks
    Remember that punch card we talked about? Forget it when it comes to Starbucks Rewards. Customers must download and pay with the app to earn rewards or “Stars,” in this case. Stars can be used towards future purchases, and simply being a rewards member can score you extras like free refills and a birthday treat.  The big takeaway for the Starbucks Rewards? The ability to capture data on customer behaviors and preferences. Because members need to download and use an app to accumulate rewards, they can secure data to make this program relevant and personal.
  4. Sephora
    Sephora’s Beauty Insider rewards program is hugely popular and has over 20 million members. They use a points system to reward members: one point for every dollar spent. It is a three-tiered program, with members eligible for different rewards and incentives at each tier. This provides an incentive for more spending to attain better deals. Another admirable thing about Sephora’s program is how personalized it is, allowing members to receive discounts and more exclusive things like limited edition products or in-store beauty tutorials.
  5. Amazon
    Amazon has plenty of competition in the online shopping market, but the secret weapon for Amazon is its loyalty program, better known as Amazon Prime. Prime doesn’t work on a points system, redemption options, or tiers, and it costs members $119 a year, yet it has a renewal rate of over 90%.

    Prime customers spend four times the amount of regular Amazon users because they convince users to purchase through Amazon exclusively. By eliminating shipping costs for members, Prime has tapped into the instant gratification that people seek these days.

While these models may not relate directly to your nonprofit’s vision regarding loyalty and incentives, the principles and strategies outlined here are meant to demonstrate the value of various programs across the retail landscape. Any way you slice it, your donors will be grateful for the recognition of their loyalty- whether it comes with a free cold brew or not. 

Learn more about our turnkey Loyalty & Incentive program