A premium loyalty program – A turning point changing “loyalty game” among enterprises

A premium loyalty program – A turning point changing “loyalty game” among enterprises

Loyalty program is considered as an effective tool to increase revenue and build long-term relationships with customers. Being aware of the benefits that a successful loyalty program can bring, many businesses also catch up with the trend and design their own loyalty program offering various opportunities to earn points and redeem rewards. As the loyalty program becomes a popular phenomenon, businesses are increasingly under pressure to come up with new ideas to attract members and compete with similar programs on the market. At this time, a premium loyalty program can take customer engagement, customer loyalty and incremental revenue to new heights.

The definition of the premium loyalty program.

Premium loyalty programs are when you charge the customers for some form of premium membership that comes with benefits and exclusive content over the regular memberships. These programs are aimed at the best customers. Instead of trading first, earning enough points, and redeeming rewards or incentives, customers will get access to immediate incentives. Customers will pay recurring fees to stay in the program and exchange for benefits from products and services at any time. Therefore, customers will spend more and the average value of each order also increases.

Reasons why enterprises design a premium loyalty program.

High-end customers are always looking for instant gratification for which they are willing to pay. This group of customers is looking for convenience and they don’t want to accumulate enough points to meet their needs. A successful premium loyalty program will keep customers engaged by providing customer privileges from 24/7 products and services, so they don’t need to wait anymore. This is what high-end customers expect from a premium loyalty program.

Moreover, a premium loyalty program will give members the value they can’t get from a subscription program. It is widely believed that people always want to see where they are compared to those around them and this is especially true for high-end customers. This customer segment is willing to pay for special privileges, or simply to show their estate and exclusivity through incentives and benefits that cannot be obtained by accruing simple points.

Premium loyalty programs target a small group of top-notch and demanding members rather than the entire customer base. Therefore, the premium program does not remove the subscription program that businesses are offering. Depending on their strategy and orientation, businesses can choose two kinds of loyalty programs to coexist to ultimately serve their entire customer bases.

Why not just call it a paid loyalty program?

Many loyalty programs today are too focused on the company and not on the customer. And focusing on the paid aspect is again focusing on what the retailer is getting. You can add a cost to a traditional points program and call it a paid loyalty program, but it won’t be a premium loyalty program. After all, a  premium loyalty focuses on values members will get in return. That’s why enhanced benefits are very important here.

 Will customers pay for a premium loyalty program?

That question sparked a lot of worries when they think of a premium loyalty program.  To be completely honest, some customers won’t. But that’s perfectly okay because premium loyalty isn’t for every customer. As mentioned above, it’s about giving the best of your brand to your best customers. In fact, the top 10% and top 1% of your customers spend as three times and 5 times as other customers, respectively. Therefore, if the benefits are valuable enough, top-notch customers will absolutely invest in the program.

Amazon was a game-changer for all retailers when this brand launched Amazon Prime with an annual fee of 119$. Members are willing to pay that because they will have access to a myriad of benefits from free delivery, access to thousands of famous ebooks, Prime Music and Prime Video… And according to statistics, Prime members have spent much more 5 times than other customers. This is a fruitful result for many businesses when building a premium loyalty program.

CVS Health also gains success in executing a premium loyalty program. Program members receive a multitude of benefits when they join for a $5/month month-to-month membership or the discounted annual membership fee of $48. They will get free delivery on qualifying prescriptions and most cvs.com purchases, special discounts on CVS Health Brand items and a monthly promotional reward that can be used on many items in the store or online. More importantly, what makes this program outstanding is that member can get access to a 24/7 pharmacist helpline. CarePass members can contact the helpline to speak live with a pharmacist who has secure access to their prescription history with CVS Pharmacy. The pharmacist will be able to answer questions about the customer’s medications on-demand and refer them to any additional tools, resources or services that could be helpful.

When customers mean everything to enterprises, the goal of any loyalty program is to exceed customer expectations. A premium loyalty program will give customers the best benefits and you will see an improvement in members’ engagement. If your business is still struggling to find a new way to take care of the high-end customer segment, it is probably time for you to start thinking about a premium loyalty program with exclusive privileges.