The best customer loyalty programmes in the UK right now
With the rising cost of living in the UK, it’s no wonder that customer loyalty programmes are so popular with consumers.
The practice of offering incentives to reward customer loyalty is a proven way to boost customer retention, attract new customers, and increase customer lifetime value:
- 77% of customers agree that loyalty programmes make them more likely to keep doing business with a company
- 68% of shoppers will sign up to a customer loyalty programme for a brand they like
- 63% of customers will adapt their spending habits to get the most from a customer rewards programme
As well as offering numerous benefits to customers, loyalty programmes bring huge advantages to brands. With research showing that it costs five times more for a business to attract a new customer than it does to generate repeat business from an existing customer, encouraging loyalty is key.
Before we take a deep dive into some of the best customer rewards programmes in the UK, let’s look at how loyalty programmes work and the ways in which brands can make them a more attractive prospect to new and existing shoppers.
How do customer loyalty programmes work?
According to Salesforce, a customer loyalty programme is ‘a marketing approach that recognises and rewards customers who purchase or engage with a brand on a recurring basis.’
When you’re looking to encourage repeat business, you can’t beat a customer rewards programme:
- 71% of shoppers say that customer loyalty programmes are a meaningful part of their relationship with a brand
- and, 27% of customers spend more when they feel an emotional connection to a loyalty programme.
Some of the most common ways of offering customer rewards include:
- As an instant reward incentive for completing a purchase
- Awarding points for purchases that can be redeemed for rewards
- Making a purchase-driven donation to charity on the customer’s behalf
- A tiered approach that allows customers to earn more valuable rewards for particular behaviours
- A rebate loyalty programme where customer receive more benefits the more that they spend
- Refer a friend programmes where existing customers are rewarded for introducing friends and family to the fold
What makes a good customer loyalty programme?
The best customer rewards programmes put the customer first. This means focusing on providing a positive experience that the customer will want to repeat again and again.
That’s why it’s important to keep in mind your customer demographics (e.g. women (80%) are more likely to join loyalty programmes than men (74%)) and their needs (e.g. Product quality (74%) is more important than pricing (54%) when it comes to driving customer loyalty).
With 75% of all shoppers saying that they would swap brands for a better customer loyalty programme, here are a few ways in which you can encourage them to remain loyal to your brand.
Give customers a choice
As the old saying goes, variety is the spice of life. 80% of customers are excited to discover new ways to earn loyalty points.
So, ensuring your customer rewards programme has a wide range of benefits will keep it an exciting and interesting prospect to your members.
As well as physical rewards, such as physical gift cards, prepaid cards, and digital rewards, shoppers are keen for loyalty programmes to offer benefits such as ‘early access to sales’ (60.1%), ‘early access to new products’ (50.8%), and ‘offers and recommendations tailored to you’ (38.9%).
Plus, don’t fall into the trap of only offering rewards related to your brand. No less than 55% of customers want rewards from partner brands rather than the brand offering the programme.
The customers’ desire for variety is one of the reasons why our multi-retailer gift card, One4all, remains ever popular. Available to spend in-store or online with more than 140 well-known brands across the retail, hospitality, and entertainment sectors including John Lewis & Partners, Marks & Spencer, and B&Q, this versatile gift card puts your customers in control of their rewards.
Feed your customers’ interests
As well as offering rewards that directly benefit the consumer, the best customer rewards programmes also offer benefits that align with the customer’s interests and needs. In fact, almost 85% of shoppers say that they are more inclined to remain loyal to a brand whose values align with theirs.
So, it’s vital that you research your customers to gain a full understanding of what is important to them. A great example of this is the Pets at Home customer loyalty programme, VIP Club, that supports its target audience’s love of animals by raising funds for ‘an animal charity of your choice’ with every shop.
Make it an easy experience
With over 90% of companies having some type of customer loyalty programme, the competition is tough to keep your members loyal.
That’s why it’s essential that your customer rewards programme is easy to join and easy to use. Otherwise, customers will simply look elsewhere.
Millennials, in particular, think that loyalty schemes are too hard to join or to earn rewards and 75% of shoppers will ditch a brand in favour of a better loyalty programme.
To keep your members onside, you should:
- Consider using augmented reality (AR) and virtual reality (VR) technology, which 95% of customers are keen to engage with
- Consider offering instant access to rewards as one of the biggest frustrations for consumers is having to wait for rewards
- Consider digital or physical prepaid cards, which is the preferred way to receive rewards for 45% of shoppers
H2: The best customer loyalty programmes in the UK
Get inspired for brand loyalty success with our pick of some of the best customer rewards programmes currently available to shoppers in the UK.
1. Pets at Home
As we touched upon earlier, one of the keys to cultivating a loyal fanbase for your brand is to truly know your customers. Pets at Home’s VIP Club certainly does that, feeding into their over 10 million members’ passion for all things animal-related.
Their customer rewards programme offers members – and their Very Important Pet(s) – 10% off online and in-store, a birthday bonus, upgrades and rewards with every visit to Pets at Home’s grooming services, and offers tailored to each customer’s favourite brands.
Members can also access the Find My VIP community, which is a fantastic 24/7 pet-finding service to help reunite lost pets with their owners.
Plus, every time a member uses their VIP card it generates a charitable donation to help a local or national animal charity that the member can select during the registration process.
The VIP Club is also easy to join and use thanks to the free Pets at Home app.
2. Amazon Prime
Although not a traditional free customer rewards programme, Amazon Prime is a (excuse the pun) prime example of a pay-to-join loyalty programme.
With more than 200 million members worldwide, the £79 annual cost (or £7.99 a month) is clearly no barrier to entry for many. Research shows that:
- Prime enjoys a 93% customer retention rate in the first year
- 45% of Prime members purchase at least weekly
- Each year, the average Prime member spends $1,400 compared to $600 for non-Prime members
There’s also the psychological thought process that members feel that they should continue spending with Amazon to justify having paid the membership fee.
The success of Prime is perhaps due to the wealth of rewards members enjoy, which include unlimited one-day delivery on eligible items at no extra cost, same-day grocery delivery, Prime Video movies and TV shows, and Amazon Music Prime.
These perks are what set Amazon Prime apart from its competitors. They’ve made themselves an integral part of members’ weekly – if not daily – lives and are constantly offering new reasons to encourage members to remain loyal, such as unlimited free Deliveroo delivery, which was introduced in 2021.
With almost 20 million members, Starbucks Rewards is another behemoth of the customer reward programme world. Its popularity with members is such that in 2019, Starbucks attributed a whopping 40% of its overall sales to the Starbucks Rewards programme.
As with Pets at Home, Starbucks is a brand that knows its customers and tailors its loyalty programme to their passion: coffee.
That’s why Starbucks Rewards offers members ‘easy ordering, endless choices and – yes, free coffee’.
Every £1 spent earns the member 3 Stars, which can be redeemed for a free drink (150 Stars) or to join the Gold Level (450 Stars), where members get ‘extra shots of espresso, selected syrups and whipped cream – all on the house.’
80% of shoppers prefer customer rewards programmes that offer surprise gifts and rewards. Starbucks Rewards plays to this fact by offering bonus Stars as an extra incentive from time to time. Plus, it’s super easy to join the customer rewards programme using the Starbucks app.
4. Tesco Clubcard
The Tesco Clubcard customer loyalty programme has been running since 1995 and currently has more than 17 million members.
For every £1 spent online or in-store, members earn one point. Every 150 points equates to £1.50 to spend and clubcard holders also receive special discounts.
Earlier, we revealed that 55% of customers want rewards from partner brands rather than the brand offering the programme. Tesco excels at this by offering three times the value of clubcard vouchers (e.g. A £1.50 voucher is tripled to £4.50) when you spend them with Tesco’s Reward Partners, which include Disney +, Tesco mobile, RAC, and Virgin Atlantic Flying Club.
Plus, Tesco clubcard caters to shoppers’ need for speed by offering to turn points into vouchers within 24 hours.
Need help with your customer rewards programme?
With over 37,000 corporate and government partners in 28 countries, we are a global industry leader when it comes to customer rewards.
You can also choose to customise your customer rewards with your company logo, so your loyalty programme members have a constant reminder of your brand.
To discover the Blackhawk Network difference, get in touch today on 020 4517 5862.