With the shift away from flat and broad, points-only loyalty programs fully underway, most marketers know that it is critical to evolve their customer loyalty program. New structures, experiences, discounts and promotions leveraging modern technology to cater to the individual not only help attract new consumers, but also ensure the retention of brand loyalists.
What we haven’t heard a ton about, outside of Amazon’s Prime Membership program, are the successes (or failures) experienced after launching a paid loyalty program. While this tactic isn’t new or groundbreaking, up until recently a majority of companies have shied away from putting a price on loyalty. Asking for an investment up front in exchange for benefits that competitors may offer for free is an intimidating prospect.
Lately, however, a variety of industries including restaurants, theaters chains, retailers and pharmacies have retooled or relaunched programs completely in an effort to deepen consumer relationships through their rewards channel. Let’s take a look at a few major brands that launched paid loyalty programs.
CVS Health (CarePass)
CVS Health recently made a move to own the future of retail pharmacy. The giant announced the launch of CarePass, a new membership reward program that promises additional benefits to paying members. Here is a quick recap of what members receive for $5/per month or $48 upfront for a year commitment.
AMC (Stubs Premier)
One of the country’s leading movie theater chains, AMC, is no stranger to paid loyalty. The brand has continued to evolve its membership tiers over past the year, recently adding Stubs Premier A-list, which allows movie-goers to view three movies a week for $20/per month. Customers that choose to join a tier below are considered a Stubs Premier member and pay a $15 annual membership fee.
Still in beta-testing phase, Lululemon launched a paid loyalty program, charging its members $128 per year. We don’t know much about Lulu’s offerings just yet, but Calvin McDonald, CEO and director for Lululemon, told analysts “the company hopes the program will net new customers while taking relationships with instructors, community teams and ambassadors to the next level.”
I look forward to seeing if and how these brands use their paid programs to surprise and delight customers, and how these programs perform in the year ahead. We’ve repeatedly seen that the success or failure of loyalty programs hinges on the data gathered and how it is deployed to augment the customer experience. I believe that’s where these battles will truly be won or lost. Will putting a premium on loyalty prove to attract new and engaged customers that feel valued enough to spend more with your brand? Only time will tell.