If customer relationship marketing were to be recognized for its innovation, the best likely measure of it would be the millions of loyalty programs it has spawned. Most, however, are more likely to be copycatting than introducing new ideas.
So let’s change that. If cats have nine lives, can we make 2024 the year that copycat reward programs finally meet their maker, and be reborn as something completely different?
It is happening now, in corners of the retail industry where marketers have been given the resources to transform this decades-long industry of 3.8 billion (mostly inactive) memberships into a core performance instrument.
6 Rewards Initiatives That Roared In 2023
Entering 2024, let’s hope these efforts double-dog-dare other retailers into elevating their own standard-practice rewards programs.
- Petco Vital Care trains on ease. The price of our pet loyalty, at nearly $137 billion, represents a growth in care that can get complicated. So, in January 2023, Petco simplified its reward platform and transitioned its more than 24 million members into a two-tiered model of its Vital Care program. Members of its Pals Rewards were automatically enrolled in the new free Vital Care Core, including complimentary grooming (every eighth), free bags of pet food (every 10th) and an app-based dashboard on which to manage a pet’s health care. Its existing Vital Care paying members were enrolled in the newly designed Vital Care Premier for the same annual fee (now $239.88 for dogs and cats, which represents a $60 savings over the monthly fee of $24.99, or $299.88 a year). Perks include $30 off boarding, unlimited vet exams and $15 in monthly rewards. Success points: Pal (now Core) members who access perk benefits increased their visits to Petco by 50% and spend 40% more than non-members.
- NASCAR fans the flames of experience. In addition to track racing, NASCAR operates an online retail site. In 2023, it launched a rewards platform, called Fan Rewards, to support both. The key to the three-tiered program’s success is not the typical form of engagement, however, because most “Fans” view NASCAR races from home, not the track, eliminating the option of earning points for attending race venues. So NASCAR devised a work-around: It incorporated a range of experience-based earnings options into the program, such as playing NASCAR Fantasy Live online, checking into a race from home (or at the track) and completing challenges like quizzes. Success points: Fan Rewards members spent 70% more time on NASCAR.com than non-members, and their click-through rate was three times higher, Sports Business Journal reports.
- Starbucks Odyssey and its ambitious journey. This extension of the Starbucks Rewards program is still a bit of a wild card, but it earns recognition for its ambition. The initiative, which Starbucks has been testing throughout 2023, encourages members to complete online games, quizzes and activities in return for collectible “Journey Stamps” (non-fungible tokens, or NFTs) and Odyssey Points to redeem for excusive experiences. These “journeys” are designed to engage members for extended periods, improving Starbucks’ insights into their preferences. The program structure also could result in fewer points issued (it’s just one point per journey), meaning fewer unused points, or liabilities, on the balance sheet. Success points: In the fourth quarter 2023, Starbucks Rewards reported 33 million total active members (it does not break out Odyssey signups), a record. It also set a record in per-member spending.
- Pampers Club gets to the bottom of parental needs. Diapers are necessities, but Pampers’ maker Procter & Gamble doesn’t take that for granted. Through its never-stands-still Pampers Club website and app, it positions the global brand not just as a product, but as a resource for parents, through a variety of helpful services and information. Knowing its customers want to raise their babies in a better world, the site details Pampers’ steps toward reducing carbon emissions. Also, knowing its customers may be overwhelmed, it serves as a parenting authority, providing “we understand” helpers such as a digital sleeping coach on its app. And in 2023, it added the “Diaper Stash” online diaper fund, where people can gift diapers and wipes to new parents. Success points: The Pampers Club app’s convergence rate averages 68%, according to Split Metrics. Its average click-through rate is nearly 10%. More than 560,000 people subscribe to its YouTube channel.
- Sweet privileges for meals. The exploration of paid memberships has entered a notable realm with a number of fast-casual restaurants. In 2023, the healthy-eats chain Sweetgreen joined them with an upgraded premium program, Sweetgreen Sweetpass+. For 10 bucks a month, members receive $3 off each daily order, free delivery and exclusive “insider” opportunities. The design cashes in on customer frequency, predicting that volume will outpace the investment in rewards. Sweetpass+ joins proven programs like Panera Bread’s Unlimited Sip Club that promises unlimited coffees and self-serve drinks, as well as free delivery, for a monthly fee of $11.99. Success points: Sweetgreen executives told investors in June that the gamified and personalized challenges of Sweetpass and Sweetpass+ yielded a 15% lift in frequency, The Spoon reported, and that Sweetpass+ was exceeding expectations.
- Cracker Barrel’s Parton-ership. Relevance is a gold ring in loyalty, and trust is an essential element of that. In September, restaurant chain Cracker Barrel tapped into both by presenting Dolly Parton as the face of its newly launched program, Cracker Barrel Rewards, through the “Rewards That Rock” campaign. Parton, who is beloved for her generosity, authenticity and work ethic, is still a celebrity, however, and that could present risk (Kanye, anyone?). But Cracker Barrel did not rush in – it had a tested partnership with Parton, dating back to 2009. And before launching the program, it sought alignment across all stakeholders, including employees, who tested the initiative and provided feedback. Success points: Given the program is just a few months old, Cracker Barrel would not share membership numbers, but did say it has seen “directional behavioral differences between members and non-members.” Plus, the Dolly effect.
In 2024, Let’s Make Loyalty Memberships Exciting Again
There is a reason why consumers, on average, use only half of the 16.6 rewards memberships in which they are enrolled (Statista). More than 80% of executives, across all industries, recognize that their programs are similar to others, Statista reports.
Yet retailers invest a lot in standing apart, with stores that look different, websites that navigate differently and experiences that feel different. Why not do the same for their most important CRM tool, their loyalty initiative, then?
Let’s make 2024 the year of the lions, not the copycats. Cheers.
This article originally appeared in Forbes.