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Strategies to Build the Best Luxury Loyalty Programs in 2023

by Irene Leander
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Strategies to Build the Best Luxury Loyalty Programs - OneCommerce

Customer loyalty programs can succeed in the luxury industry without devaluing the brand’s reputation if you handle them correctly. In this industry, customer engagement is everything. People come to you for VIP services they can’t get anyplace else, not just for discounts or bonus points.

The best luxury loyalty programs must put an emphasis on life-changing experiences if they want to differentiate themselves and create enduring customer loyalty in the current market.

From the standpoint of a premium retail experience, customer expectations are indeed evolving. Recent findings from the Deloitte Fashion and Luxury Report show that:

  • 39% of luxury customers demand accessibility to greater options of shopping channels
  • 44% of them are willing to receive gifts as a reward in exchange for their loyalty
  • 45% of them want more customized items and services

Hence, luxury brands should have special strategies in place to fulfill customer expectations and promote loyalty. With our blog, we will highlight the distinctive strategies that you can use to build the best luxury loyalty programs to boost consumer spending and loyalty.

What is a luxury loyalty program?

A luxury loyalty program is a customer acquisition and retention strategy, which entails luring customers into a long-term reward plan. Its objective is to persuade customers to continue making purchases in order to benefit from the plan.

Exclusivity is the term that can describe luxury loyalty programs perfectly. Gifts and benefits of a higher value that are exclusively accessible to the top tier of the member base are the main emphases of this reward system.

Exclusivity is the term that can describe luxury loyalty programs perfectly

Exclusivity is the term that can describe luxury loyalty programs perfectly

Luxury loyalty programs are more likely to include partner benefits or experiential rewards when it comes to gifts. Besides, regarding exclusive treatment, these programs usually offer VIP tiers that are only open to the top spenders. Additionally, the top spenders will receive invitations to the brands’ exclusive events and parties. 

What makes your luxury loyalty program ideal?

Luxury loyalty programs are a good method to retain customers. Yet, to make the best out of it, you need to create an effective and attractive program that can convince customers to join in and stay for a long time. In our opinion, the best luxury loyalty programs should:

  • Add value to your brand and your customers.
  • Allow customers to buy exclusive products or add-ons that are meant for premium members only.
  • Have a unique, premium-sounding name for the program and points.
  • Make customers feel superior.

Strategies for the best luxury loyalty programs

Success comes from having the flexibility to adapt and use new strategies. Changing the ways you interact with customers will undoubtedly result in an improvement in their purchasing patterns. Here are some strategies to help you design the perfect luxury loyalty program you want.

1. Set up the program in tiers

Your top customers can easily receive better incentives and benefits if you divide your luxury loyalty program into tiers, which will encourage them to spend more money and participate more actively.

With a tier system based on behavior, you can enable rewards for different tiers for your customers based on their activities, such as their spending habits, success in challenges, charitable giving, regular website visits, etc.

For example, the Saks Fifth Avenue loyalty program, SaksFirst, is divided into five tiers, with the Premier tier open to members who spend $5,000 or more annually. Meanwhile, the Diamond tier opens to those who spend more than $25,000. For its top spenders, the program offers a very exclusive “invitation only” tier.

SaksFirst is divided into five tiers which is a great practice for the best luxury loyalty programs

SaksFirst is divided into five tiers which is a great practice for the best luxury loyalty programs

Your luxury loyalty program’s top tier must be restricted to a minority of participants (less than 10%). Your customers will find the perks of this tier very appealing, and those that achieve it will feel a sense of accomplishment. These special benefits ought to be one-of-a-kind that aren’t offered anywhere.

With the help of this strategy, your luxury brand can engage with customers effortlessly since they would likewise be keen to move up a tier thanks to all the offered benefits.

2. Create the out-of-the-box names for your program

Another strategy to build the best luxury loyalty programs is naming the program and points that can reflect your brand image. The name of your luxury loyalty program should highlight the renown of your brand as well as some level of membership exclusivity. 

For instance, Rosewood Hotels Group, a global chain of upscale hotels, dubbed their program “Rosewood Elite,” while the Paris Gallery Group of Companies, which sells luxury goods including perfumes, cosmetics, watches, and sunglasses, branded their program “Luxury Club.” Both of these names accurately reflect the members’ status.

Besides, points seem bland and generic, which is not the image you want for your brand. Therefore, you should give your points a clever name instead! For example, Starbucks refers to its points as stars, which has a considerably more opulent ring than the word “points.”

Starbucks refers to its points as stars, which has a considerably more opulent ring than the word "points"

Starbucks refers to its points as stars, which has a considerably more opulent ring than the word “points”

3. Offer experiential rewards to keep members interested

While customers don’t link loyalty programs to cheap or non-luxury services, they could associate discounts with “cheap” things. Hence, luxury brands usually allow members to use points to enjoy unique experiences rather than using them to receive discounts.

Trust and brand loyalty will be fostered by showing your VIP customers that you are genuinely interested in establishing a good bond with them. One excellent method to achieve this is by providing distinctive experiences. The following ways can help you keep people interested:

  • Organizing members-only events and experiences
  • Throwing limited-entry parties
  • Expressing your gratitude to your top-tier customers with a signed gift
  • Allowing customers to participate in the creation of new products 

For instance, high-end fashion label LUISAVIAROMA goes beyond fashion rewards to provide loyalty members access to luxury hotel vacations, cooking workshops, and special dining experiences if they obtain platinum-level status. 

LUISAVIAROMA goes beyond fashion rewards to provide loyalty members access to unique benefits

LUISAVIAROMA goes beyond fashion rewards to provide loyalty members access to unique benefits

What’s more, Neiman Marcus provides access to customized travel experiences, hard-to-find tickets, and restaurant reservations to members of its InCircle club. 

4. Surprise & delight your customers

Building a relationship with each customer is a priority for luxury brands. As a luxury brand, you must cater to each customer individually and occasionally surprise them to keep them interested.

Luxury brands must cater to each customer individually and occasionally surprise them to keep them interested

Luxury brands must cater to each customer individually and occasionally surprise them to keep them interested

Every reward can have an emotional effect without having to be pricey. Giving something unexpectedly is great to build long-lasting loyalty and persuade customers to make an impulsive purchase.

Freebies, personalized offers, and insider access to secret information are all examples of ways to surprise your customers. Moreover, your unexpected loyalty programs can possibly involve invitations to special events.

There is one example of members of Be Swarovski, Swarovski’s loyalty club, receiving a complimentary gift each year on their birthday. Another example is Mercedes-Benz launching #MBSecretSanta on social media and engaging with its customers directly by giving out 1000 gifts, including branded teddies and Bluetooth speakers.

5. Invite customers to VIP clubs

The chances to receive specific perks are what give a loyalty program its actual value. The benefits that only the elite members of the community can access make themselves more desirable to customers. Thus, you should consider creating specific interest groups centered on your best-selling products.

VIP clubs give loyalty programs a genuine sense of exclusivity

VIP clubs give loyalty programs a genuine sense of exclusivity

One excellent example is LUISAVIAROMA’s Sneakers Club, where loyal members can join with an entry fee. Once admitted, they have first access to new shoe releases before the general public. 

Most of the time, the product is sold out to club members before it reaches the shop shelves! Such VIP clubs give out the best luxury loyalty programs with a genuine sense of exclusivity.

6. Deploy a paid loyalty program

Paid or subscription-based loyalty programs are quite similar to VIP clubs, but in this case, they involve a direct monetary payment, which may be made once or on a recurrent basis.

Your customers pay a monthly or yearly subscription fee to participate in a paid loyalty program and receive its benefits. In fact, many businesses, whether they are luxury or not, are implementing paid loyalty fees on their platforms to stop people from switching to their rivals.

Many businesses, whether they are luxury or not, are implementing paid loyalty fees on their platforms

Many businesses, whether they are luxury or not, are implementing paid loyalty fees on their platforms

The program’s features must have a monetary value because buyers have to pay an additional fee over the cost of your goods. Paid loyalty programs typically offer benefits such as free shipping, loyalty discounts, and invitation-only events. However, you can add other interesting features to satisfy your customers’ special needs.

There are two ways to approach the idea of paid loyalty programs: either charge a fee for the entire program or add it as a bonus option to the standard, free system. 

If you choose the first approach, you need to make sure the perks and incentives are actually exceptional and worth the cost. Meanwhile, for the second option, you should think about utilizing it to increase current benefits. For instance, users of the paid system can double their points for every dollar spent and/or qualify for more valuable birthday rewards.

Customers in these exclusive programs tend to be more loyal because only those who are genuinely committed to the brand are ready to pay upfront for deluxe privileges. Additionally, the program will have a good ROI if it gains popularity.

5 best luxury loyalty programs for high-end brands and retailers

A luxury loyalty program is one of the best tools for customer retention since it offers customers pleasant and long-lasting memories that they will associate with your company going forward. If you are still in the gray area, let’s have a look at some of the best luxury loyalty programs that deliver unrivaled customer experiences.

1. MN Network – Misha Nonoo 

Misha Nonoo is a British-Bahraini brand based in the US that was established and is run by women. The company is committed to empowering women, conducting business ethically, and building a community of self-assured, powerful women, from their suppliers to their customers.

Through their loyalty program, the MN Network, Misha Nonoo takes their brand community a step further

Through their loyalty program, the MN Network, Misha Nonoo takes their brand community a step further

Through their loyalty program, the MN Network, Misha Nonoo takes their brand community a step further. This community is marketed as an all-access club for the world’s most interesting women, highlighting the brand’s concept of female empowerment before fashion.

Customers can turn from associates to a CEO through their tiered VIP program, earning special benefits like personalized styling advice, invites to offline and online events, and early access to new products.

With some of their most distinctive experiential incentives, Misha Nonoo delivers an even more opulent rewards experience. For instance, CEOs who spend more than $2,800 annually are given free international returns, a yearly allowance for tailoring, and free home-styling consultations.

The business really delivers rewards to customers in the comfort of their own homes! By going above and beyond their expectations, they have converted one-time customers into devoted brand evangelists.

2. InCircle – Neiman Marcus

Neiman Marcus, a company of upscale department stores in America, provides InCircle – one of the best luxury loyalty programs on the market. It is a reward program with eight different membership tiers through its NM and BG Credit Cards.

  • Circle One through Circle Six are the standard tiers, including rewards like points, the concierge, and free shipment.
  • President’s Circle and Chairman’s Circle are the two extra tiers, and they provide the most valuable rewards.
 InCircle is a reward program with eight different membership tiers through its NM and BG Credit Cards

InCircle is a reward program with eight different membership tiers through its NM and BG Credit Cards

Customers can select their own bonus point day with InCircle, which encourages more members to take advantage of the offer and raises the likelihood that they will make additional purchases.

When Neiman Marcus loyalty program’s members achieve Circle Five, they receive access to the InCircle Concierge. Once loyalty members gain access to the InCircle Concierge, they will find seasoned specialists who can assist with making reservations at exclusive restaurants, booking pricey vacations, and obtaining tickets to popular events. 

With these experiential benefits, Neiman Marcus wants to create an experience that demonstrates just how valuable its most devoted customers are to them.

3. Hugo Boss Experience – Hugo Boss 

Hugo Boss is a high-end German fashion brand that specializes in making suits for men. It also sells women’s and men’s clothing, fragrances, and accessories. 

Hugo Boss Experience is one of the best luxury loyalty programs in the fashion industry

Hugo Boss Experience is one of the best luxury loyalty programs in the fashion industry

Hugo Boss Experience, one of the best luxury loyalty programs in the fashion industry, distinguishes out for eschewing both the earn-and-burn and tiered strategies in favor of an instantly accessible perk system.

To be clear, there are no tiers or points in the loyalty program and it is free to join. Every member has access to all perks at the outset. Private style appointments, complimentary adjustments, and VIP parties are some of the benefits. Moreover, the program even provides store-to-door Uber delivery.

4. Swarovski Crystal Society – Swarovski 

Swarovski has created one of the best luxury loyalty programs that sparkled just as much with a product that signals exclusivity all by itself. Swarovski Crystal Society, the name of their program, projects images of beauty and opulence from the outset of the customer experience. 

The Swarovski Crystal Society program provides members-only prizes that are incredibly rare and exclusive

The Swarovski Crystal Society program provides members-only prizes that are incredibly rare and exclusive

The Swarovski Crystal Society program provides members-only prizes that are incredibly rare and exclusive. For example, the program gives its members special advantages like first access to new items, yearly presents available only to SCS members, and admission to member-only events.

Additionally, by providing members with the chance to assist a good cause, Swarovski invites them to take part in the Swarovski Waterschool project, which can establish an emotional bond with their community.

Moreover, the company has developed distinctive customer experiences that not only enhance the value of their connection but also raise the possibility that these experiences will spread among the customer’s networks.

Consider the annual free entry that Swarovski offers its program members to Swarovski Kristallwelten in Austria. Visitors from the neighborhood are welcome to visit the Swarovski Crystal Worlds to see the art gallery, beautiful crystal parks, and VIP member club.

The crystal sculptures are too stunning for visitors to ignore and share on social media, creating a social proof that will persuade more potential customers to come to the event.

5. Moda Rewards – Moda Operandi

Moda Operandi, which is a platform for fashion discovery, enables online customers to browse and purchase directly from designers’ current and upcoming runway collections. The business provides a wide range of services to customers. 

Moda Rewards is among the best luxury loyalty programs that use the classic earn-and-burn point structure

Moda Rewards is among the best luxury loyalty programs that use the classic earn-and-burn point structure

Their loyalty program is called Moda Rewards, and it uses the classic earn-and-burn point structure. You can gain 500 points just for signing up, which is free. 

The program works based on the 1:1 spend-to-points ratio. You can receive a $20 credit on your account for every 1,000 points you earn. Additionally, you get access to Moda Private, a personalized shopping service catered to the demands of the customer.

The bottom line

With the best luxury loyalty programs, luxury brands can reward their loyal customers while also building a strong relationship between both parties. A luxury loyalty program will work well with the right strategies in place. 

It is crucial to keep in mind that wealthy customers care less about price and discounts. Instead, the cornerstones of creating a luxury loyalty program are exclusivity, surprises, and welfare. They are more inclined to remain loyal to brands that deliver unique experiences and have a wide range of advantages that are valuable to them.

Therefore, when coming up with ideas for the best luxury loyalty programs, you’d better take into account events, early access, invitations, and experiential programs for your program’s benefits. Wish you a lot of luck!

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