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Why a Premium Loyalty Tier Makes Sense to Complement Your Free Program

Does your brand use a free loyalty program?

While it may serve as a good acquisition tool, does it help to engage, motivate, or energize your members?

Two-thirds of consumers say their loyalty is more difficult than ever before, according to the 2020 Premium Loyalty Data Study.

That’s because today, consumers are driven by seemingly limitless options. Targeting their loyalty can be a tricky proposition.

Retail loyalty programs have long comprised traditional points offerings that attract members quite well, don’t retain them in the long run, and often become stagnant.

But what if there was a way to unlock that higher customer relationship?


A Premium Loyalty Tier Can Spark Your Loyalty Program

While a free loyalty program can serve as a nice recruitment engine for your brand, the rewards are often not enough to differentiate.

There’s where a premium loyalty tier can take your best customers and make them exponentially better.


In a premium loyalty program, your customers pay a fee for membership join.

In return, they receive a variety of enhanced, instant benefits.

Members who use these benefits not only spend more with your brand, but they develop strong emotional connections, engage more, and become advocates.

89% of consumers would recommend a retailer to family or friends if the retailer’s premium loyalty program offers valuable benefits.

Offering enticing, instant loyalty program benefits is a great way to connect with your customers emotionally, as well as transactional.

Premium loyalty programs target a brand’s best customers with instant benefits available 24/7/365.


Which Brands Are Offering a Premier Loyalty Tier?

While lots of brands have gotten on board with premium loyalty, one that comes to mind is CVS.

CVS’s ExtraCare rewards program has existed for a long time and gives its members the typical benefits that most free loyalty programs offer.

This free program is great at acquiring members because there’s virtually no barrier to entry for consumers.

But for those top customers, CVS launched CarePass in 2019, marking the first premium loyalty program in the drugstore space.

The program offers members free national pharmacy delivery on eligible prescriptions, fast, free shipping and instant discounts on certain CVS Health brand items.

It also offers members rewards that can be used in-store and online each month.

While some of CVS’s Q1 growth has been attributed to COVID-19, much has come from the expansion of the program.


A Tiered Loyalty Approach Appeals to Your Entire Customer Base

Brands that use a tiered program approach perform admirably because they cast a wider net for consumers to participate in and create a loyalty continuum that energizes members.

Having that VIP-style premium program on top of your free program sets the bar high for loyalty benefits and instills that FOMO (Fear of Missing Out) ingredient among members.

In fact, 67% of consumers are likely to join a premium loyalty program if they already belong to that retailer’s free loyalty program.

That is a significant pool of consumers to target with a premium loyalty tier.

Premium loyalty members are so valuable to brands because they use the program so frequently that it becomes part of their daily lives.

Your free program members can also see the value in your premium tier and upgrade.

Offering free and premium tiers cater to your entire customer base seamlessly.

One of the many appealing aspects of a premium tier is it offers member-only perks, which can be products that are not widely available or exclusive access to sales.

Casual customers can see the value in a premium loyalty tier and might gravitate toward the elevated benefits. You want to engage your customers on all engagement levels.

When nearly 70% of your free program members would join a premium tier, brands should sit up and take notice.


Make Your Loyalty Program Something for Everyone

Loyalty boils down to customers providing insights, brands listening, and designing a loyalty program that best serves them.

 If you can attract more members to your program with a premium tier, and more engaged members who will spend more, it seems like the answer is easy:

Use your free program to acquire members and offer a premium tier to captivate your best customers who will become more valuable than you could have ever imagined.

If nearly 70% of your free loyalty program members would join a premium tier if it’s offered, what are you waiting for?


ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.

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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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