Subscription loyalty programs are booming and have been for quite some time.
And it’s no surprise why.
Brands love the recurring revenue stream they generate, along with engagement and the zero-party data they receive from their best customers and members love the enhanced benefits and VIP experiences that come with it.
More than half (55%) of consumers belong to at least one type of subscription service that requires them to make regular payments for access to a product or service.
Paid enrollment and premium loyalty are the two main types of subscription–based loyalty programs that are attractive to consumers. Subscription loyalty is vastly different than points-based loyalty programs, the latter allows members to earn points to receive rewards down the road.
Building a successful subscription loyalty program requires a different mindset, different strategy and different benefits and rewards.
And here are some examples of brands that are doing it right for inspiration.
Paid Enrollment vs. Premium Loyalty?
A paid enrollment excites your customers with exclusive offers, helps re-engage existing loyalty program members, increases member acquisition to your loyalty program, sparks incremental purchases and encourages early adoption of new products.
Also, a paid enrollment motivates consumers to engage in a desired way by giving them a limited-time or limited-quantity offer.
In exchange for a fee to participate in a paid enrollment, consumers receive limited-time benefits such as the chance to purchase or win exclusive items, members-only offers or any VIP experience.
Unlike a paid enrollment, a premium loyalty program doesn’t have any time constraints and is a commitment on behalf of your brand and customers.
For a monthly or annual fee, premium loyalty members receive instant benefits that they can use anytime they want that give them a sense of value, exclusivity and brand recognition.
You can add a premium loyalty tier, which is a subscription-based loyalty program, to a tiered points-based program.
A premium loyalty program identifies your most valuable customers, your advocates and offers the best brand benefits possible.
Premium loyalty program popularity continues to rise. It’s been a steady progression since 58% of consumers belonged to a premium loyalty program in 2019, 66% in 2020, 70% in 2021, 72% in 2022 and 77% this year.
Consider that 74% of consumers are likely to invest in a brand’s premium loyalty program if they already belong to that brand’s points-based loyalty program.
Subscription-based Loyalty Program Examples
Here are some examples of best subscription-based rewards programs and what makes them great.
Taco Bell’s Taco Lover’s Pass
This paid enrollment program launched in early 2022 and was available to customers through the Taco Bell app.
This was a great example of a paid enrollment because, for only $10, loyalty program members received one free taco a day for 30 consecutive days.
Customers could redeem one of Taco Bell’s seven tacos: Crunchy Taco, Crunch Taco Supreme, Soft Taco, Soft Taco Supreme, Spicy Potato Soft Taco, Doritos Locos Tacos and the Doritos Locos Taco Supreme.
Our take: This digital paid enrollment example is perfect because it offered a simple value proposition and encouraged customers to join the loyalty program by downloading the Taco Bell app.
The fact that it began at the start of 2022, coinciding with the company’s 60th anniversary, added more excitement to the paid enrollment.
On the Border’s Queso Club
In 2021 officials at On the Border Mexican Grill & Cantina wanted to generate more customer engagement during the pandemic so it launched a subscription program called the Queso Club.
Here was the simplest of value propositions: To become a member of the Queso Club, customers paid a mere $1, plus the price of a bowl of queso, and received free queso for a year when they dined in.
This strategy helped On The Border increase sales and engagement and collect customer data.
Our take: Although it was risky, given the pandemic across the country, the Queso Club was a hit.
The simple value proposition and low cost provided the incentive needed to get people in the door again. That helped with incremental sales because with more people coming in, the more they’re buying additional things.
Coldwater Creek’s MyColdwater Rewards
Officials at Coldwater Creek, an iconic cataloger and online retailer of women’s apparel, accessories, shoes and home décor since 1984, wanted to implement a premium loyalty program to retain members, give them loyalty options and acquire long-term customers. They also wanted to stand out among competitors and increase Customer Lifetime Value (CLV).
Coldwater Creek partnered with ebbo to launch MyColdwater Rewards, a premium loyalty program that offers attractive benefits to its loyal customers.
- Members of MyColdwater Rewards pay $14.95 per month and receive premium benefits like:
- 10% cashback
- Shipping rebates and return shipping rebates on Coldwater Creek purchases. This not only saves them money, but it allows them to easily return items if they don’t fit or suit their style.
- Access to a Marketplace of more than 1,500 retail and travel brands where they enjoy 5% back and the same shipping savings, all through their member dashboards.
Our take: Since launching MyColdwater Rewards, loyal customers have continued to sign up for and engage with the program. It’s a simple and direct loyalty program that offers great value to its members.
The return shipping benefits alleviate any friction when it comes to consumers worrying about having to pay return shipping if a clothing item doesn’t fit or match their style when they see it in person. This is a huge hurdle with online apparel shopping and this benefit removes that issue.
Not only have MyColdwater Rewards members spent a significant amount with the brand, but the program drives incremental revenue through the monthly subscription fees.
The REI Co-Op program premium loyalty program provides a lifetime membership for just $30.
Program members represent the essence of the brand, which is geared to the outdoor lifestyle, necessary equipment members need and fantastic adventure trips.
Some of the benefits Co-op members receive include:
- Early access to limited-edition gear and curated products
- Special pricing and discounts on REI Co-op classes, day trips and nationwide adventures
- Free flat tire repair for bicycles and machine wax for skis or boards.
- Free shipping
- Up to 33% off rentals
Our take: The allure of this premium loyalty program is that REI customers are committed to an outdoor lifestyle from the start. So, becoming a member of a program like this that offers a low-cost, lifetime membership is appealing to all customers because everything about the Co-op is what they love most about the brand.
Any loyalty program that has 200 million global members is one to look to for inspiration.
Amazon Prime is the best example of a premium loyalty program because it offers great value.
For $14.99 per month or $139 per year, Prime members receive convenience through free shipping (two-day and same-day) and numerous shopping and entertainment benefits.
The amount of Amazon items eligible for free two-day shipping increased in recent years from 20 million to more than 100 million.
Our take: Amazon has always listened to it its customers and adapted its Prime program based on those insights. The slew of Prime benefits is too great for even the savviest members to recite. It’s been around since 2005 and has been the most reliable, adaptable and appealing loyalty program in the world.
Barnes & Noble B&N Premium Membership
Barnes & Noble always had a premium loyalty program, but enhanced the benefits this year and it’s now called Premium Membership.
The annual membership is $39 and includes:
- A 10% discount in Barnes & Noble stores
- A 10% discount for purchases made on bn.com
- A new spend-and-save reward on all shopping.
- For every $10 spent, members receive one stamp and after receiving 10 stamps, he or she earns a $5 reward.
- Free drink upgrades in B&N Cafes, a yearly free canvas tote and free standard shipping.
Our take: The premium loyalty program does a nice job of adding value to make it more attractive. Besides the discounts, the spend-and-save reward and the incentive to earn stamps elevate the program’s appeal. Barnes & Noble also has a points-based tier for its customers called Barnes & Noble Rewards.
My Best Buy
Best Buy officials have worked hard in recent years from a loyalty perspective, offering versions of premium loyalty programs like Best Buy Beta and Totaltech.
They learned things from that period coming out of the pandemic and this year launched three new loyalty programs, two of which are premium loyalty. The programs focus on enhancing the member experience.
The three new loyalty programs are: My Best Buy™, My Best Buy Plus™ and My Best Buy Total™.
My Best Buy includes:
- Free shipping with no minimum purchase
- Access to purchase history, online order tracking and up-to-date shipping information
- Quick checkout, save items to keep an ongoing wish list of your favorite tech
My Best Buy Plus includes:
- Annual membership is $49.99. My Best Buy Plus members receive everything My Best Buy members do plus:
- Exclusive member-only prices on thousands of items
- Exclusive access to sales, events and highly anticipated products
- Free 2-day shipping with no minimum purchase
- Extended 60-day return and exchange window on most products
My Best Buy Total includes:
- Annual membership is $179.99
- All benefits contained in My Best Buy Plus, as well as:
- Geek Squad 24/7/365 tech support for all your tech—no matter where you bought it
- VIP priority support at any time and access to specially trained team members for advice, customer service and coordination via phone or chat
- Up to two years of product protection, including AppleCare+, on most new Best Buy purchases while you’re a member
- 20% off repairs
- Promotional service offers such as discounted in-home installation
Our take: Best Buy has shown persistence in attempting to provide its customers with the best loyalty programs.
These three memberships do a good job of segmenting Best Buy’s customers and offering extensive benefits in a tiered loyalty program.
Subscription Loyalty Programs Offer Segmentation, Value and Brand Stories
When you look at the examples of subscription loyalty programs above, there are a few common themes: Great customer segmentation, a simple value proposition and telling your brand’s story.
By offering a limited-time paid enrollment, you’re attracting customers to your brand, its loyalty program and your story.
Same with a premium loyalty program. And with both, you are offering your customers incredible value and benefits in exchange for a fee.
If you’d like to talk more about adding a subscription-based loyalty program to your strategy, contact us here.