Quick links:

• • • What is a rewards system?
    • 6 tips for designing a points reward system for your business
    • FAQs
    • Final words
      
      

The ultimate goal with a reward points system is to motivate customer behavior that grows your business. However, it is also a good way to build brand loyalty and reward your most loyal customers. 

The Pareto Principle (also known as the Law of the Vital Few) states that 80% of all sales come from just 20% of your customers and that 20% are usually loyal, returning customers. 

Creating a rewards program lets you focus on that valuable 20%!

If you have ever wondered 

• What a reward points system is, 
• How to set up a simple rewards program for loyal customers, and 
• How you can increase your revenue with a loyalty program

Then you are in the right place.

Related: How Mecca Built One Of The World's Best Loyalty Programs

What is a reward points system?

According to Shopify, rewarding points is the most common type of customer loyalty program. A reward points system is an incentivization strategy that increases spending through earning in-store points or credits. 

Customers earn points on their account when they purchase. They can then redeem points the next time they shop or use them for other freebies and perks. Some loyalty programs also let customers accumulate points and move from a “regular” member to a “VIP” member in a tiered program. 

Evermore Toys is a great example of a simple points rewards system. Their mission is to create high-quality toys for their customers, and they implemented an elegant customer loyalty program that increased their revenue by 738.87%.

Customers earn 1 point for every $1 they spend; when they reach 100 points they get $10 off their next purchase. Evermore Toys saw a 95% per month increase in loyalty points over a one-year period, showing that you don’t need a complicated loyalty program to get results.

6 tips for designing a points reward system for your business

To implement a reward points system for customers, there are a few key systems you need. Your business and your customers are unique. 44% of consumers aren’t happy with rewards programs because the bonuses feel “irrelevant”. So it’s worth a bit of creative strategy! 

The most successful loyalty programs are specific to your brand community and are extremely customer-focused. 

Related: 7 Steps To Building A Profitable Loyalty & Rewards Program

1. Identify the main goals of your customer loyalty program

Obviously, your loyalty points system benefits your revenue potential. However, you can do so much more with it! So the first step to a successful points system is to identify what you want to achieve with it. 

Here are a few questions you can ask yourself: 

• • • Do you want to build brand loyalty by creating a unique community?
    • Do you want to reward your MOST loyal customers by creating a tiered reward system? 
    • Do you want to delight customers with unexpected surprises? 
    • Do you want to encourage more spending or points accumulation? 
    • Do you want people to share your business on social media or get people to refer their friends? 
    • Are you going to run “points promotions” to encourage higher spending in sales? 

All loyalty programs motivate particular behaviors. When you are starting out it is best to choose just one or two goals so that you can track their progress and then build from there.

2. Determine how customers will earn the rewards

Next, you will need to determine HOW customers actually get rewards. 

You might want to keep it simple like the Evermore Toys example above. They spend a dollar, they earn a point. There’s nothing wrong with avoiding complications.

Loyalty programs also offer points for customer behavior such as

• • • Sharing on social media 
    • Earning freebies on your birthday 
    • Giving product reviews
    • Referring a friend

Take Our Bralette Club as an example. Their loyalty program members can earn points when they make a purchase, for every friend they refer, for Tweeting about the brand, and even just for getting a year older on their birthday.

Other models include tiered rewards systems. This is where members can move from regular member to VIP status once they cross a spend threshold. VIP customers could have benefits such as Double Points (every dollar is 2 points) or other bonuses like automatic free shipping. 

You will also need to consider online versus in-person shopping. Can customers earn and spend points no matter where they shop with you? Using a points reward software like Marsello makes loyalty programs completely seamless across eCommerce and POS.

3. Determine how these rewards will be awarded to the customers

Once customers have earned their points, it’s time to reward them! Do you have a system for how they can claim points? 

Firstly it is important to have a login for members where they can easily see their points program total. Seamless integration with your eCommerce checkout and POS is critical for a successful loyalty program. Don’t make your customers work for it! 

Next, identify the timeline. Can they redeem points as soon as they earn them? Will they receive a coupon or code for their next purchase? Will you send them something for free? 

Lastly, consider what form their rewards will be in. It doesn’t just have to be points they can spend in-store. 

Here are a few ways you could reward your customers in a points program:

• • • Offer secret sales for people with  a certain number of points 
    • Collaborate with other businesses to do giveaways with similar products 
    • Give away freebies when they buy multiple items 
    • Do live in-person events for your most loyal customers 
    • Offer other bonuses like free shipping or first access to new products 
    • Set up an affiliate program where they can make actual money for referring new customers 

Nigerian shoe brand bCODE has an outstanding loyalty program strategy. When they first launched their online rewards, they created a double-point promotion as well as a spend threshold. 

With their email marketing and social media campaign, they encouraged increased sales, loyalty program sign-ups, reward redemptions, and more! They also encouraged bCode customers to sign-up by sending an email campaign that detailed how shoppers could sign up to the newly expanded loyalty program and earn points in the lead-up to the weekend’s promotion.

With a 94% increase in loyalty points spent, you know they are rewarding loyalty right! 

4. Identify the value of your rewards

If customers earn points-per-dollar, you will need to identify the value of your rewards. You can categorize rewards from low to high value based on how loyal customers are. 

Will they get a discount voucher? Do their points add up to free shipping? Can they move up a membership level if they reach a spend threshold? 

If you have a tiered loyalty program, the value of the rewards can go up with each level. 

For example, a first-tier member could earn points that add up to a discount voucher. A second-tier member could earn double points. A third tier, VIP member could have free shipping, triple points, and access to exclusive events. 

Remember, your most loyal customers bring in the most amount of revenue. It is worth going above and beyond to improve their experience with higher value rewards.

Look at outdoor apparel & footwear brand Merrell NZ. As soon as you sign up for their rewards program you can start moving up the tiers. Their silver and gold tier members enjoy generous discounts when they earn a certain number of points. Merrell NZ makes it simple for members to earn points with amazing rewards and a simple loyalty program widget.

5. Associate a name/brand to your loyalty program

No matter how amazing your product is, you are facing a huge amount of competition. Your customers are probably being asked to join a huge number of other loyalty programs. 

To make your customer reward system stand out, we recommend branding it. 

How can you make your loyal customers feel like they are part of a special community? This is where customer experience comes into play for modern business. It’s not enough to simply sell to your customers. Associating a brand name with your loyalty program makes you memorable. 

For example, Marsello user Our Bralette Club has a membership loyalty program called the Peach Party. Peach Party members enjoy generous discounts and free products, and most importantly the branded name makes them feel part of the club!

6. Promote your rewards point program

Finally, you need a system for promoting your points reward program. You can’t reward customers if they don’t know it exists! Don’t be afraid to promote it everywhere online and in stores. 

This isn’t just for new customers or new business. When Evermore Toys rebranded, they used a clever email marketing campaign to encourage existing loyalty members to engage with the newly branded store and earn more rewards.

We have a few tips for promoting your rewards system online:

• • • Let people register for an account at the checkout and remind them to sign in
    • Have a banner on your website telling people about the benefits of becoming a member and earning points 
    • Let customers know on your social media platforms 
    • Use an omnichannel marketing platform that combines your reward system online with your POS 
    • Automate your email marketing strategy to communicate effectively with new and existing members- you need to promote at the right times to ensure high engagement!

Your loyalty program is all about serving your customers even more. Shout its benefits from the rooftops!

FAQs

How do businesses track the cost-effectiveness of their points system to ensure it's generating a positive return on investment?

Businesses can track the cost-effectiveness of their points system by analyzing customer engagement metrics, such as increased purchase frequency, higher average order value, and the redemption rate of points. Comparing these metrics against the program's operational costs provides insights into its return on investment (ROI).

Can you provide examples of challenges businesses might face when integrating a new points system with their existing CRM or sales systems?

Integrating a new points system with existing CRM or sales systems can present challenges like data sync issues, software compatibility problems, and the need for employee training to manage the new system effectively.

What are some strategies for re-engaging customers who have accumulated points but have not redeemed them for a long time?

To re-engage customers with dormant points, businesses could implement targeted marketing strategies such as personalized email campaigns reminding them of their points balance and its value, limited-time offers to boost points redemption, or introducing new, attractive rewards. Add urgency by expiring points and tiers — let customers know they have limited time remaining to cash in and receive their rewards.

Final words

A reward points system is an effective way to increase your revenue. It rewards your most valuable customers and goes beyond a transactional relationship. By branding your loyalty club, designing an easy-to-follow system, and promoting it for every new and returning customer, you will see incredible ROI on your rewards program. 

If you are looking for the easiest way to set up a loyalty program for your eCommerce or in-person store, you’ve already found it. Marsello makes it simple to set up, market and run a successful point system for rewards. Start rewarding your customers with Marsello!

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Updated 30 May 2024.

Here's a fun (and likely unsurprising) fact: the vast majority of people like celebrating their birthdays. Research cited by Benefits and Pensions Monitor shows that 89.4% of Americans enjoy celebrating birthdays, and 90.1% say birthday gifts help them feel more valued. 

So, it is no surprise that birthday marketing — specifically, birthday email marketing campaigns — perform incredibly well. According to MarketingProfs, "open rates for birthday mailings were over three times higher than for mass-promotion mailings sent to the same clients: 56.2% vs. 16.8%."

These numbers tell us that birthday email campaigns can be a huge treat – for both customers and brands. So, it's worth investing the time and effort to make your birthday initiatives shine. Read on for ideas and tips on how to do just that.

Listen to this post:

What are the benefits of birthday rewards for your business?

The most significant benefit of birthday rewards programs is that they are a win-win strategy. They focus on the buyer experience, which benefits your best customers while simultaneously increasing revenue and loyalty.  

There are several vital reasons why birthday rewards should be part of your overall loyalty program strategy:

Boost customer loyalty

Firstly, birthday rewards programs increase customer loyalty. 84% of customers opt to stay with a brand that surprises them and takes a customer-centric approach. Who doesn't like being spoiled on their birthday? 

Improve customer retention

Loyalty programs (that include things like birthday surprises) are proven to improve customer retention rates. Even a slight increase of 5% in retention can boost profits by 25-95%.

Gain valuable customer data

Birthday reward campaigns enable you to collect data and insights into customer behavior. You can, for example, track birthday purchases and redemption rates, which can help you tailor future marketing efforts.

By adding birthday rewards to an existing loyalty program, you can personalize customer experiences, gather data on which campaigns resonate with which customers, and re-target loyal customers who redeem rewards.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program

Examples of birthday email campaigns and rewards

When you do it right, birthday campaigns and rewards can improve customer retention, loyalty, and engagement. Whether it's sending birthday emails, creating specialty coupons, giving out freebies, or something a little more creative, these examples hit the nail on the head. 

Send a one-off special discount and build excitement

This is a low-hanging fruit of birthday rewards. When implemented correctly, special discounts are known to yield quick results and valuable data. If you're new to birthday campaigns, consider starting things off with a special discount that shoppers can use during the month of their birthday.

It's simple, straightforward, and easy to test. Just make sure to create unique promo codes for each celebrant so you can track who's redeeming your offers.

For example, Target's birthday email, which is sent to members of the Target Circle program, contains a coupon for 5% off the customer's entire purchase.

Offer free products on special occasions

Alternatively, you can give shoppers a freebie on their special day. Some examples of brands that offer birthday freebies include Starbucks and Sephora. Birthday freebies are growing increasingly common. Australian burger joint Hello Harry's openly offers its customers a free birthday burger… with a small caveat that protects the business—the birthday burgers are free up to the value of $12.

Freebies are a great option if you want to encourage your customers to try your products or if you have samples and surplus stock to give away.

Offer creative rewards to encourage engagement

Here's the not-so-great reality of loyalty or rewards programs: while many consumers sign up for them, not everyone participates in all the programs they join. 

A 2018 survey found that almost "two-thirds of respondents actively engage with less than half the loyalty programs to which they are members." The survey found that only 18% actively engage with all their rewards programs.

If your loyalty or rewards program suffers from low engagement rates, consider incorporating birthday rewards to stir things up. When implemented correctly, this tactic can fuel engagement among your members and put your brand back on their radar.

Anna Beck, a Shopify Plus-powered jewelry store with multiple resellers and stores, has done a great job at subtly incorporating birthday rewards into its loyalty program to incentivize customers but not create so much buzz that they risk sign-ups for just that reason.

Members of the program automatically get 20 points on their birthday, but with 100 points for creating a profile and 25 for completing their profile information, it's easy to see how customers quickly earn enough points to reap the rewards.

Thanks to Marsello, Anna Beck has experienced a 728.33% increase in revenue, directly attributable to its loyalty program. Even better, the brand has developed a comprehensive understanding of its customer database and how to convert them into loyal customers. The team had this to say about developing their loyalty program with Marsello:

"​​Through the data, we've found that we have incredibly loyal customers. Once they make their second purchase, they are highly likely to be lifelong customers. Marsello allows us to easily reward those loyal customers for sticking around, it was a no-brainer. Anna Beck has only been an online retail brand for a handful of years, and a loyalty program was the natural next step."

Another great example comes from Smack Bang. The Wellington-based pet products specialist is one brand that's using a powerful loyalty program to its advantage. With a 100% engagement rate and 6x ROI, the addition of loyalty marketing to SmackBang's all-over marketing tech stack really helps the company capture customers' attention time and time again.

Loyalty members earn points for actions such as creating a profile, referring a friend, reviewing products, making purchases, and engaging on social media. Benefits include % discounts and first looks at product releases. 

The Smack Bang team keeps loyalty program members updated with emails regarding product releases, business updates, sales, events, and more! By maintaining regular contact with their customers, they set the expectation that the more loyal a customer is, the better deals they'll get. And we love that SB lives up to this expectation!

Create a sense of mystery and surprise your customers 

Want to keep shoppers on their toes or still trying to figure out which reward type is the best option? Consider offering a range of rewards and surprises that your customers can enjoy during their birthday month.

That's what the lingerie retailer ThirdLove is doing. Members of their 'Hooked' loyalty program get an annual free birthday gift, which remains a surprise until the customer's special day. According to the company's website:

"We're not ones to spoil a surprise! While we won't tell exactly what they are, they'll change regularly and might be a freebie, a discount, or a little something special just for you."

Surprise freebies are a wonderful way to keep your customers excited, but our tip? Don't be tempted to fall into the trap of 'pawning off' your hard-to-sell stock on these customers. Make sure your birthday freebies are worth the hype and keep shoppers wanting more.

Celebrate your business’s birthday and say thanks to your customers

A nice twist to the concept of birthday rewards is to celebrate your brand’s birthday. This is a good way to mark an important milestone, and it gives you the opportunity to thank customers – both new and old.

Bare Wholefoods, a Sydney-based cafe, did just that when they celebrated their 4th birthday. 

To mark the occasion, Bare Wholefoods sent a pre-birthday email to their customers, which included a $10 discount code along with a sincere message of appreciation. The result? The small but mighty campaign saw a 6.59% conversion rate!

By celebrating their own birthday, Rough & Bare was also able to show appreciation to the customers that keep them going – and this is such a powerful message in the wake of significant changes brought about by COVID-19.

Sign off with a personal touch

If you have multiple sales associates who treat customers as their clients, you might want to send birthday emails directly from each team member. This helps strengthen the personal connection between the customer and the salesperson. 

Check out this example from LOEWE. The email is short, sweet, and signed by the customer's sales contact at the store.

Bonus tip: consider combining this tactic with a discount or perk so the email feels personal AND rewarded.

Tips for implementing birthday rewards

We’ve talked about the different types of birthday rewards you can offer; now let’s discuss how you can take your campaigns to the next level. If you’re looking to start or further optimize your birthday rewards initiatives, follow these best practices to ensure that your efforts hit the mark:

Integrate birthday perks with your loyalty or rewards program

While it's certainly possible to offer birthday rewards to non-loyalty program members, your campaigns will perform far better when they're incorporated into your loyalty program.

Roping birthday rewards into your loyalty program enables you to build data-rich customer profiles. Having your shoppers' purchase histories, shopping activities, and birthdays in one place means that you have a clear view of each customer. This, in turn, can enable you to improve and personalize their shopping experiences even more.

LEGO Certified Stores has done this to great success!

By awarding customers points on their birthdays and for purchases, LEGO creates a feeling of scarcity but customers also quickly rack up the points with each purchase. This means that when customers earn a reward, it feels all the sweeter!

Make it easy for people to enter their birthday

A successful birthday marketing campaign starts with data—in particular, your customers' dates of birth. Make sure you collect your customers' birthday details from the get-go to personalize your marketing efforts and improve customer experiences. 

You can, for example, ask them to enter their date of birth when they sign up for your loyalty program or newsletter. That's what Merrell NZ does on its website. The brand has a popup that prompts visitors to leave their name, email, and birthday.

With a 25% sign-up rate, this form is clearly a core component of Merrell NZ's customer engagement efforts.

Automate your campaigns

Keeping track of everyone's birthdays and setting up individual messages isn't just tedious; it's impossible as your business grows. Campaign automation is not only a remarkable time-saver – automation as a whole (along with personalization) has been pinpointed as the future of marketing. 

Thankfully, Marsello has done the hard work for you and already has several pre-made automated flows that are easy to review and enable. One of these automated flows includes a Birthday Flow, which automatically triggers an email sequence to engage customers on their birthday month. This pre-designed email series is populated with a small discount offer and is already tied to your customer database, so there's no need to manually configure the campaign. 

Just take a look at this example from shoe retailer bCODE:

Notice that they’ve given their customers a lovely surprise by automatically adding 5 points to their account to celebrate! We love that this campaign stands out, has a compelling subject line, and gives customers value right away.

Learn more: All of Marsello’s automated campaigns are designed to be easily enabled in just a few clicks.

Test your offers

While we can certainly recommend birthday rewards and ideas, ultimately, the performance of your birthday promotions will depend on your specific store and customer base. That's why you must test and analyze different birthday promotions to see what works best for your business.

As mentioned above, creating unique promo codes makes it easier to monitor the performance of your offers and the customers who are redeeming their rewards.

Take Merrell NZ, which is a pro at testing all of the company's marketing. The team had this to say when we spoke to them about their Marsello-powered marketing.

"Marsello offers automations, loyalty, rewards, email campaign segmentation, SMS. All the tools that we knew we wanted to test in stages as our eCommerce and business grows. Step 1 was swapping from [our old provider] to using Marcello’sMarsello's email marketing campaigns. Step 2, we're using marketing automation. Step 3, it's loyalty!"

It was essential to the team to find an all-in-one tool that they could use to build their marketing functionality while also testing each and every change. And that didn't stop when it came to building their loyalty program and testing their promotional offers!

One way you can use birthday rewards to understand your customer engagement patterns is to test which promo types (e.g., free shipping vs. 20% off vs. $5 off) your customer responds well to. Then, it's easy to apply similar logic to any other promotions and offers that you create in the future!

Integrate SMS marketing

While email is still the most popular channel for sending birthday promos and rewards, SMS is rapidly gaining steam and won't slow down anytime soon.

So, if you're thinking about using SMS marketing, customer birthdays present the perfect opportunity to touch base. Consumers will likely be checking their phones for birthday greetings, and having a timely text from your brand could serve as a pleasant surprise. 

Just remember, SMS marketing comes with a few rules to keep in mind and not every merchant is eligible. To make sure you’re doing everything right, check out our help center on SMS compliance. 

But wait!
What about people who put in fake birthdays?

When you plan your loyalty program, you're setting up incentive structures. And there are always shoppers who game them to get the maximum discounts and offers possible. Here are some ways to avoid birthday rewards abuse.

Apply a "cooling-off" period when people sign up for your loyalty program

Don't let people put in a birthday date within the first month ("What a coincidence, my birthday is TOMORROW!"). This will deter people who want "quick points" or instant freebies and then disappear. If you apply this, make quick mention of it to explain the policy. For example, "Sadly due to abuse of this offer, we won't send birthday offers within 1 month of signing up to our rewards program :(".

Set a spending threshold

When offering birthday discounts, establish a minimum spend for the promotion. That way, you encourage higher spending and ensure the promotion benefits both the customer and your business. Check out this example from the Harry Potter Shop. While the brand offers a generous $10 off, birthday celebrants must spend at least $50 to redeem the coupon.

Set a deadline for reward redemption

Having reward redemption deadlines can help prevent birthday reward abuse by ensuring customers use their rewards promptly instead of letting them pile up indefinitely. It also encourages immediate spending, which is great for cash flow. 

Be mindful of giving away too many points

If you use a points system to reward your customers, make the value of birthday points lower than what they would receive for making an actual purchase. This ensures that the points remain an incentive without being overly generous.

Consider "surprise" freebies

For birthday programs where you give out a freebie, make it a surprise! Don't explicitly say what free item they will receive before they sign up. That way, people will be less likely to sign up for that one specific item, and you can still treat your loyal members.

Ultimately, people will always want to take advantage of free points. The benefits you get from creating positive customer experiences for your loyalty club members will almost always outweigh the potential for rewards abuse. 

FAQs

This is one of our most popular topics, so we get a lot of questions! Here are ones our experts hear the most.

What is a 'birthday marketing strategy'?

A birthday marketing strategy involves using customers' birthdays as an opportunity to engage with them, show appreciation, and offer special promotions or rewards. Done right, birthday marketing initiatives enhance customer loyalty, increase sales, and create positive experiences that drive repeat business.

What is a birthday campaign?

A birthday campaign is a targeted marketing effort designed to celebrate a customer's birthday. It typically includes sending personalized birthday messages and offering exclusive discounts, gifts, or other incentives to make customers feel valued on their special day.

What is a birthday promotion?

A birthday promotion is a special offer or discount for customers on or around their birthday. This could include percentage-off discounts, free gifts, bonus points in loyalty programs, or other exclusive deals that incentivize customers to make a purchase.

How do you keep track of customers' birthdays?

You can keep track of customers' birthdays by collecting their birth date information when they sign up for your loyalty program, newsletter, or during the checkout process. From there, you can manage the data using your CRM software.

What should be included in a birthday rewards program?

The right birthday marketing campaign depends on your brand. That said, a birthday rewards program typically includes personalized messages, exclusive discounts or offers, gifts, bonus loyalty points, etc. 

How do businesses track the effectiveness of birthday reward campaigns over time?

To track the effectiveness of birthday reward campaigns over time, you can use customer relationship management (CRM) tools to analyze customer engagement, purchase frequency, and changes in spending patterns around their birthdays. If you're using Marsello, you can track the revenue generated from birthday automations over time, allowing you to optimize and see the impact of your changes.

Can small businesses without a big budget implement impactful birthday rewards?

For small businesses with limited budgets, impactful birthday rewards can be implemented by offering personalized discounts, exclusive products, or simple gestures like birthday messages that make customers feel valued without incurring high costs.

How do businesses personalize birthday rewards for diverse customer segments?

Personalizing birthday rewards for diverse customer segments involves gathering data on customer preferences and purchasing history to tailor rewards that resonate with different demographics, enhancing the customer's experience and loyalty. Remember: Don't get too granular with your segments—the smaller the segment, the more time-consuming and cost-intensive personalization will be. For smaller businesses, we recommend one simple birthday reward, such as a voucher.

Final words

Birthdays can be a real treat not just for your customers but for your brand, as well. So, take the time to create campaigns that make your customers feel appreciated on their special day.

Need help doing just that? Check out Marsello's customer loyalty features and discover how you can engage each customer on their birthday and beyond.

Make sure to check out our comprehensive loyalty guide to ensure your loyalty marketing is up to date in all areas.

Quick links:

• • • 1. Design your tiered loyalty program
    • 2. Get everything ready on your website and in-store
    • 3. Promote your program
      
    • 4. Set up important notifications as SMS messages
    • 5. Keep optimizing!

Want to build a loyalty program like Mecca’s Beauty Loop, but don’t have the money or time for custom solutions?

Before building brand loyalty, you need to build a brand. And building a brand? That journey starts with the very first business plan, that spark, that idea on a napkin, that leads you to register a company and step into the wild, wicked, unruly world of retail.

So let’s forget loyalty points programs for the time being.

Look inward for a minute, and ask: Why did I start this business?

For a lot of retailers, their business started out of frustration. Frustration that you couldn’t find what you wanted at other stores, frustration about the lack of selection or curation, frustration about the customer service, concern that salespeople only wanted to sell you what they were getting the most commission for (rather than what suited your needs best).

Mecca Founder Jo Horgan shared why Mecca came to be back in 1997 in an interview for the Australian Financial Review.

“I loved cosmetics – I thought there was a real space for them that should be fun and entertaining. And yet when I went to a department store I found it exhausting, going from one counter to another,” Horgan says.

So she started to think: “Imagine the best product offer, a beautiful environment and my best beauty friend next to me taking me from zero to expert in one session…” 

“That’s how I wanted to experience cosmetics myself,” she says.

The first time I went to Mecca, I admitted I used $3 foundation and substituted in cheap eyeshadow with a 10-year-old makeup brush for eyebrow pencil. The response? “Oh darling, sometimes that’s all you need to do the trick!”

He told me he often does the same… and still managed to sell me $150 worth of foundation and an eyebrow pencil. Now that’s some serious sales game.

I tried to unpack this later. The feeling I got was: He’s on my side. He knows where I’m coming from. And I can trust him.

Lesson 1: Hold on to that “why” and don’t lose sight of it. It’s your greatest brand asset.

It’s highly likely the reason you started your business is why your customer is here. 

I was surprised to learn that Mecca founder Jo Horgan felt frustrated by the department store experience, just like I did. But in the same vein, it makes sense, based on how shopping at Mecca makes me feel.

Lesson 2: Points programs do not magically create brand loyalty.

A points program is one tool you can use to keep customers coming back. But the truth is, if you’re not doing anything else to support it—it’s not going to have the Mecca effect.

So, let’s take your “why” and I’m going to show you how you can build an extraordinary loyalty program with ordinary, off-the-shelf loyalty software.

How to Build An Extraordinary Loyalty Program With Ordinary, Off-The-Shelf Software

Everything here can be done using Marsello, when integrated with your eCommerce and POS software.

Step 1. Design your tiered loyalty program

Most loyalty software has the functionality to build a tiered loyalty program off the shelf. But before you jump the gun and turn it on, think about what the tiers should look like. Revisit your brand’s vision and mission, and come up with a strategy.

How many tiers are there?

Three is a good place to start. Mecca recently added a fourth tier to give those extra high spenders a more tailored experience, but we’d recommend only adding more than three tiers when you see a clear need for it.

How are the tiers structured?

Are the tiers based on spend, or number of loyalty points? And is it lifetime spend or annual spend? Generally, most retailers want their customers to maintain a minimum spend or number of points per year to keep their status. This requires the ability to expire tiers (you can do this in Marsello).

What are the rewards?

This Level 4 Beauty Looper (below) worked out that her free sample box had a retail value of $80. With 4 of these per year, plus an extra birthday box, that’s $400 for a year of free gifts. However, this person had to spend $3,500 to reach this tier. That’s an 11.4% discount, or about the same as giving away every 10th coffee for free.

The beauty (ha) of giving away free boxes, is that you mitigate price perception. Receiving a free box in the mail is a serious dopamine hit, and Mecca knows this. Customers perceive the value of the loyalty reward to be much higher than it really is. They will happily spend more to receive the reward than “risk” missing out on retaining their status by shopping somewhere else.

What will you call the tiers?

Don’t rush this part, take your time to really find the right fit for your brand. “Bronze, Silver, Gold” isn’t very creative. Mecca chooses names that really connect to its brand mission, product, and the relationship they have with its customers.

Step 2. Get everything ready on your website and in-store

Now that you’ve got your loyalty program designed, you need to make sure it’s all set up properly.

Do you have an online store and physical shops?

If so, make sure your loyalty software is integrated with your POS and eCommerce platforms. This will ensure that points can be earned and redeemed easily across all your sales channels. Marsello integrates with a range of POS and eCommerce apps off-the-shelf, no expensive customization required.

How will customers find out about it?

In-store: Train staff on your loyalty program, and make sure they’re asking customers to sign up point-of-sale. Focus on the benefit to the customer—if you’ve really taken the time to build a considered loyalty program, customers won’t be able to resist.

On your website: Make sure it’s impossible to miss! Set up a loyalty widget on your online store to show visitors how they can earn and redeem rewards, and show the available tiers. Best practice is to create a website page dedicated to your loyalty program that goes into even more detail. See Mecca’s Beauty Loop page:

Step 3. Promote your program

How do I launch it?

Once you’ve designed your program, prepare a launch campaign. Whether it’s a ‘soft’ launch or a full-scale event—make sure your customers know about it. Marsello has all the marketing tools you need to communicate with your customers: email, SMS, automations, website pop-up forms, and more. Use these to craft your promotional campaigns.

• Teaser campaign: Pre-launch, let people know something’s coming. Get people curious and excited for the launch date. For example, you could run contests or giveaways to generate hype.
• Soft launch: It’s okay to do a soft launch to start off, just to test everything is working. But once you’re confident, prepare a launch campaign.

• In-store promotion: Let your customers know about it in-store. Make sure staff are trained on your loyalty app and can answer basic questions about how to get set up, the tier structure, and what the benefits are for the customer.

• Full marketing launch: add a pop-up to your website, send out email campaigns to your database, and promote the program on social media. You can even run a limited-time launch offer—for example, 200 extra points for signing up in the first week.

How do I keep customers engaged?

The promotion doesn’t stop after you launch the campaign! There are lots of light-touch, low-maintenance campaigns you can run to keep your loyalty program interesting. Plus, you can talk about all the cool campaigns you’re running to non-loyalty subscribers to get that FOMO going.

Here are some ideas to get you started:

• Run points campaigns: For example, you could have a double points week. These are great to run in slower sales seasons, as they incentivize loyal customers to accelerate their points growth.
• Hype the program on social media: Use social media to promote the loyalty program and engage with customers through interactive content and contests. See Mecca’s Beauty Loop hype in the Instagram post above!
• Run limited-time offers: Offer special rewards for a short period of time to incentivize customers to participate in the loyalty program.
• Build up a community: Foster a sense of community among loyalty program members through events, forums, or social media groups.
• Collaborate with partners: Partner with other brands to offer joint rewards and increase the value of the loyalty program.
• Build your mobile experience: Encourage customers to save your loyalty portal to their mobile home screen, so they can access their points balance and engage with your brand on the go.
  
  

Step 4. Set up important notifications as SMS messages

Your customers get so many emails, they’re missing important updates. An SMS will cut through the noise by going direct to their mobile. While you don’t want to overdo SMS marketing, automated texts triggered for important loyalty updates and reminders will be much appreciated.

Notify customers when they have a reward coming!

Whether it’s a discount in their inbox ready to redeem, or a gift coming to their physical address, let them know it’s on the way and when they can expect it. 

Let customers know when their tier is about to expire

Like Mecca, you probably want customers to keep up a minimum annual spend. Expiring tiers is a fantastic way to keep customers spending to retain their status… but it won’t have much impact unless they know how they’re progressing! Send customers an automated text message to let them know they’ve got a bit more shopping to do to keep up their tier.

Let customers know when they hit a milestone

Your loyal customers will want to know when they’ve unlocked a new reward, or hit a big points milestone (for example, they’ve entered a new tier). Don’t leave them guessing, automatically deliver the good news right to their mobile.

Step 5. Keep optimizing!

The final step is that… there is no final step. Running a loyalty program is an ongoing, ever-evolving journey that you’re on with your customers. So it’s important to have fun and keep innovating as you go. Loyalty is a regular and ongoing business activity, just like marketing and sales. There will always be improvements and new ideas you can implement, so have a regular reminder set up to check in and evaluate how it’s going.

What are the top loyalty metrics I should be tracking?

Marsello’s dashboard keeps track of all your important loyalty metrics. Top things to track are repeat purchase rate and rewards redemption rate. These will show you that your loyalty program is moving the needle on sales and revenue, and getting good engagement from customers.

How do I know if my brand is doing better over time?

While Marsello doesn’t track brand impact, there are some incredible new tools you can use to measure your brand health. Take a look at Tracksuit, as one example.

Final Words

Building a successful loyalty program like Mecca's Beauty Loop starts with understanding your brand's "why." A loyalty program is just one tool to keep customers coming back, and it should be built with a clear strategy based on your brand's vision and mission.

Mecca's founder Jo Horgan was frustrated with the department store experience and wanted to create a fun and entertaining shopping experience, which is exactly what Mecca and the Beauty Loop experience provides.

Using ordinary, off-the-shelf loyalty software like Marsello, you can create a tiered loyalty program with rewards that offer value to customers and keep them engaged. However, it's important to remember that a loyalty program is only effective if you're doing other things to support it and build a strong brand relationship with your customers.

Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program