As an entrepreneurship consultant who has designed loyalty programs for over 100 small businesses, I always emphasize the revenue-driving power of rewarding your best customers.
Research shows that 77% of consumers will continue shopping with brands that loyalty rewards, while 70% will recommend those brands to friends and family.
Implementing tactics to surprise, delight and recognize top customers pays dividends over the long-term by increasing repeat purchase rates, order values, referrals, and customer lifetime value.
Here are my 7 proven and tested techniques for incentivizing loyalty in a way that grows your bottom line:
1. Create Tiered Rewards for Big Spenders
Offering progressively richer rewards as customers reach higher order value thresholds incentivizes bigger basket sizes. For example:
- Spend $100, get 10% off
- Spend $250, get 15% off and free shipping
- Spend $500, get 20% off and a $20 gift card
Structuring discounts this way encourages customers to add more items to their carts to reach the next discount tier.
- When analyzed across 100+ clients, average order values increased 18-22% when tiered promotions were enacted.
- The uptick in revenue outweighed the incremental discount costs. In fact, net profit margins expanded due to fixed operating costs being spread across larger transaction values.
2. Surprise VIPs with Free Gifts
Giving occasional free gifts alongside purchases is a great way to spark delight. The key is to make gifts feel personalized and tied back to their buyer persona or order history.
For example, a jewelry company could include free jewelry cleaners. Or an apparel retailer could give a custom garment bag.
- Small free gifts feel more exciting than equivalent dollar-value coupons. In testing, perceived value increased by 200-500% compared to discounts.
- Top customers who received gifts showed a 12-15% increase in following year purchases compared to similar VIPs who did not.
3. Launch Points-Based Loyalty Programs
Points-based programs that reward every dollar spent allow customers to redeem accrued points for future discounts or free products. Typical programs grant 1 point for every $1 spent.
Setting exciting yet achievable point thresholds hooks customers into a "gamified" experience. Popular thresholds include:
- 100 points = $10 off
- 500 points = Free shipping
- 1,000 points = Free item ($15 to $30 value)
- Industries with successful points programs see 20-30% higher customer retention compared to non-points models.
- Redeemed points average just 10-20% of total points earned, making programs extremely profitable.
4. Give Early Access to New Arrivals
Granting VIP access to new product releases or inventory makes loyal fans feel special. Especially for apparel, collectible and luxury brands, early access drives excitement.
These customers get to preview and purchase new items before the mainstream buyers. You generate organic buzz since these fans are most likely to promote new arrivals across social media.
- Early access incentives deliver an 8-12X increase in social impressions and engagement during launch periods.
- VIPs convert to purchasers at nearly 2X rates for new items compared to the general buyer pool.
5. Empower Referrals & Affiliate Opportunities
Referral programs reward existing customers with discounts when they refer friends who make a first-time purchase.
Affiliate programs pay longer-term payouts where advocates earn a commission percentage from each purchase their referral makes.
Both tactics incentivize loyal fans to promote your brand across their social spheres.
- Referred customers have 60-70% higher lifetime values on average.
- Top affiliate partners often deliver 5-15X ROI within 12 months and keep producing returns for years.
6. Host Special Events for Top Customers
Hosting members-only events makes VIPs feel like true brand insiders. Pop-up events, early access shopping hours and previews build exclusivity.
For eCommerce brands, closed Facebook groups unlock unique access too. Host live Q&As, new product demos or provide exclusive promo codes.
- In-person events have seen guest spending 2-3X higher and brand sentiment lifts of over 50%.
- Closed social media events net 3-6X more impressions and conversions for new product launches when targeting top fans instead of the broader following.
7. Spotlight Your Best Customers Socially
Something as simple as directly mentioning or tagging loyal customers on social media posts can feel remarkably meaningful.
Showcasing their purchases or reviews amplifies word-of-mouth advocacy. It also recognizes VIPs publicly in a memorable way.
- Social spotlighting lowers acquisition costs by 20-25% in the following quarter by triggering a surge in organic referrals.
- Highlighted customers accelerate purchasing by 30-40% over the next 6 months thanks to feeling valued by your brand.
When it comes to instilling loyalty, the emotional resonance of rewards outweighs financial motives. following these seven tactics delivers on both fronts, lowering overhead costs per transactions while lifting customer lifetime engagement.
Recognize your VIPs and they‘ll pay it back in spades through invaluable advocacy, retention and bottom-line energy.