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2021 Loyalty Resolutions: 7 Actions to Build a Better Loyalty Program in the New Year

It’s the time of year when people are thinking about cutting carbs, reading more books, and trying to become the best versions of themselves – But have you thought about your 2021 loyalty resolutions?

Loyalty is becoming a lot harder.

Two-thirds of consumers agree their loyalty is more difficult for retailers to maintain than ever before.

The pandemic has pushed more people online than ever before. It’s given them the power of choice and level the playing field for retailers.

Consumers continue to change. Has your loyalty program changed with them in the past twelve months?

Your loyalty program also needs to become the best version of itself next year, especially after the rollercoaster that was 2020. You need to consider some New Years’ resolutions for your loyalty program.

Some of them are simpler and some are more difficult, but all 7 of these 2021 loyalty resolutions are things you should be thinking about as a retailer going forward.


1. Talk to Your Customers More

Everyone knows you need to focus on your customers and add value and convenience, but how do you know what they want?

Ask them! They want to tell you!

More than three-quarters of all consumers are willing to share the data required for benefits such as personalized offers, more efficient and intuitive services, and more competitive pricing.

Your customers are the best source of information when it comes to enhancing your loyalty program. There’s no need to guess or simply look at what competitors in your space are doing.

What matters is what matters to your customers.

Starbucks recently updated its Rewards program based on customer feedback. No more loading gift cards to use the app. Now, members can use their desired payment method which was the most requested update.

Learn more about why Starbucks is giving its rewards members more ways to pay.

So, how do you collect this data?

It turns out that today’s consumers want to talk to your brand in real-time.

Sixty-six percent expect the ability to provide feedback about products and services on the channel they are currently using, while 63% expect easy transitions between channels when they engage with a business.

So, make it a point to ask your program members what they want in 2021. The answers might surprise you or not, but at least you’ll know your effort are focused on your best customers.


2. Add New Benefits to Your Loyalty Program

Once you determine what your members value, you can optimize – Because the best loyalty programs aren’t “set and forget”.

Amazon is the prime example of this.

While Amazon set out to solve the pain point of shipping with Prime back in 2005, the program has evolved. Members now enjoy videos, music, Prime Day, and grocery benefits.

This has kept Prime fresh and increasingly valuable to its members. And in turn, members have been valuable to Amazon.

The average Prime member spends $1400 annually as opposed to non-members that spend $600.

Amazon isn’t the only one. Sephora has surveyed customers and held focus groups to enhance Beauty Insider.

Over the past few years, its added redeemable products, altered its points system, and increased reward options.

As of this year, points translate into cash-off, free shipping (with no threshold for Rouge members), and more sample products than before.

And as mentioned before, Starbucks has made updates to its Rewards program over time including more ways to pay and eliminating tiers so that members can redeem rewards sooner.

What is one new benefit that you can offer your members in 2021? And how can you deliver it faster?


3. Offer Faster Benefits

Your customers don’t want to wait for value.

As evidenced by streaming services like Netflix, Spotify instant messaging, life is now on-demand. This also applies to loyalty programs.

According to our 2020 Premium Loyalty Data Study, 60% of respondents said instant discounts that can be used whenever they shop would motivate them to join a premium loyalty program.

So, what might these benefits look like?

Lululemon offers free shipping on every order plus members-only access to yoga and fitness classes.

Lids offers 20% off all purchases through All Access Pass Premium.

CVS CarePass not only offers fast, free shipping on Rx orders, but members have access to a 24/7 live pharmacist to help them with questions and concerns. Plus, they receive 20% off CVS Health brands every day.

There’s no need to rack up points over time.

These retailers reward their loyalty program members every time they shop.

What types of instant discounts can you offer so your members feel that value whenever they engage?

And how do you fund these awesome transactional benefits plus experiential benefits that build emotional connections with your customers?


4. Think Beyond Points

Just about every one of your competitors has a traditional loyalty program today, but have you thought beyond points?

One very different model is premium loyalty programs.

In these programs, your best customers pay a membership fee in exchange for instant, enhanced benefits that a free program can’t touch.

Revenue from the membership fees allows retailers to provide the best benefits and experience possible.

Learn more about premium loyalty.

While Amazon started this trend with Prime in 2005, many other retailers have gotten on board lately. Most recently, Walmart+ cemented the trend.

But will your customers pay to be part of your loyalty program?

Seventy percent of those not in a premium loyalty program would join one of their favorite retailers offered one.

And according to the McKinsey Consumer Paid Loyalty 2020 Survey:

  • 43% of consumers are more likely to buy weekly since joining
  • 59% are more likely to choose your brand over competitors
  • 62% are more likely to spend more with your brand

Eighty-eight percent of consumers who are satisfied with the special benefits offered by a retailer’s premium loyalty program will likely choose that retailer over a competitor that is offering a lower price.

The good news is that you don’t need to get rid of your free program. They can work together.

So, even if you already have a free loyalty program in place, think about a premium tier for your VIP customers.


5. Incorporate Elements of Corporate Social Responsibility into Your Loyalty Program

66% of young consumers say that a brand’s association with a social cause or platform positively impacts their overall impression of the brand and 58% say this association will impact their likelihood of purchasing that brand.

Consumers want to shop with brands that support the causes they care about.

But how do you incorporate CSR into a loyalty program?

As mentioned before, talk to your customers. Find out what they care about.

DSW encourages its members to donate lightly used shoes at any location by giving them 50 rewards points for each pair.

Recently, Sleep Number partnered with Make-A-Wish to do bedroom makeovers to help immunocompromised children find sanctuary as they shelter-in-place.

In addition to that, Sleep Number® Insiders can donate their InnerCircle® Rewards points to provide additional donations to Make-A-Wish.

Target Circle members can earn and cast votes for a selection of local non-profits.

There are many ways to incorporate CSE into your loyalty program. Just make sure you’re being authentic. If that’s not the case, they will see through it.

What are some causes that you could help support through your program?


6. Simplify Your Loyalty Program

Is your loyalty program easy to understand?

Both signup and usage?

There’s a reason why a lot of tiered programs require a mini spreadsheet to list the benefits. They’re confusing for consumers!

First, look at your registration process.

A registration process that requires customers to fill out extensive forms or navigate through multiple pages will be a real turn-off that could prevent up to 70% of your customers from signing up.

What about once consumers are in the program?

Fifty-two percent of U.S. internet users said they weren’t sure how many loyalty points they have for their favorite brand.

Roughly 40% of consumers would visit or purchase from a store more often if they did a better job of communicating how many points they have, and 53% said they would consider doing so.

Your signup process needs to be simple, but this also shows how many loyalty programs are downright confusing to participate in.

Are there ways you can pare it down and make the entire experience easier for your customers?

You should be enhancing your program over time but doing major changes to the structure or the rules frequently can frustrate customers and turn them off to your program.

While most retailers need to completely overhaul their loyalty programs at some point, it’s a wise idea to make frequent, incremental changes.

Ninety-eight billion dollars per year is left on the table by companies who fail to provide “simple” experiences to their consumers.

Don’t let any of your dollars be on that table in 2021. Keep it simple.


7. Perform a Loyalty Program Awareness Audit

You might have the best loyalty program out there, but what happens if your customers don’t know about it?

Yet you can’t go on or into a Whole Food store without seeing an advertisement for Prime.

Even when you’re driving on the highway, chances are you’ll see a sprinter van or 18-wheeler with the Prime logo displayed prominently.

It seems obvious to advertise your loyalty program, but not every retailer does an excellet job at this.

Many people don’t sign up for loyalty programs simply because they are not aware of them.

So, make one of your 2021 loyalty resolutions to perform an audit.

  • Is your offer to join on the homepage of your website?
  • Do you have in-store signage?
  • Are you mentioning it in your email promotions?
  • Can you run a social media campaign showcasing the benefits?
  • Have you considered training for your in-store associates so that they can get your customers excited about the program?

You’d be surprised at how many of your competitors aren’t doing a good job advertising their loyalty programs.

Gap recently launched a new loyalty program that simplifies things across all brands. Now, members can earn and redeem rewards from the entire family of brands: Navyist Rewards, Gap Good Rewards, Banana Republic Rewards, and Athleta Rewards.

While you want to provide your customers with the most appropriate rewards based on what they spend, the last thing you want to do is decrease loyalty because they are confused.

How can you simplify your program?

Can you cut down on tiers or simply offer a free program and a premium loyalty program?


New Year, New Loyalty Program

Just like people, loyalty programs are always in need of improving and optimizing over time.

All these resolutions will help build more loyalty with your customers in 2021.

But keep in mind that 80% of New Year’s resolutions fail.

The problem that many people face is not changing their thinking. And this includes loyalty.

It’s not enough to simply have a loyalty program going into 2021. You have to adjust your loyalty mindset.

So, talk to your customers and figure out what they value. Offer benefits and support causes that they care about. Think about changes you can make that go beyond points. And keep it simple.

And if you need help, talk to us. We’d love to hear about your 2021 loyalty resolutions and help you give your customers the best experience possible.

Paul Wolfer

Paul is our Senior Manager, B2B Marketing. He works closely with the leadership team on strategic positioning, messaging and branding. When he's not posting on LinkedIn or working on the newest data study, he can usually be found adventuring to breweries or attempting to learn a new song on his guitar.

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ebbo™ is an all-in-one loyalty company. With our data driven strategy, full-service approach, and the unwavering support of the people behind the platform, our dedicated team will work with you to understand your loyalty goals, innovate solutions and help you build customer engagement on repeat.

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