Why Paid Loyalty is About More Than Just a Fee

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By: Clarus Commerce |

Posted on April 10, 2019

The difference between a free loyalty program and a paid loyalty program seems obvious. One is free to sign up for and one requires members to pay a recurring fee to stay in the program. But paid loyalty is about so much more than a membership fee. It’s about attracting your best customers and creating a unique and reciprocal relationship with them.

Paid Loyalty Isn’t All About You

It’s about putting customers at the center.

Members of these programs (also called premium loyalty program) pay an annual fee to receive desired benefits that are accessible 24/7. The beauty of this type of program is that it attracts your best customers. Once they become members, their engagement and spend levels often increase significantly.

Find out what makes customers willing to pay for a loyalty program.

Paid loyalty revolves around a brand truly listening to its customers, so it can provide the best benefits possible. It’s about a customer’s advocacy for the brand. This deep commitment from customers is mirrored by the brand’s mission to give them what they want.

It’s about a member raising his or her hand and stating to a specific brand: “I am one of your best customers and I want to show you how invested I am in using, promoting, and advocating for your brand.” These customers become brand ambassadors who tell their friends about you and, in a way, become great public relations associates.

Paid Loyalty is About Brand Love

Commitment plays a major role in the world of paid loyalty.

Members of these programs are telling brands that they are advocates who enjoy great benefits all the time (just look at Amazon Prime). They want to be involved in an ongoing personalized relationship based on the brand putting them at the center of everything it does.

Typically, a customer that unconditionally advocates for a brand has a strong emotional bond with the company based on a series of memorable experiences. Customers who sign up for a paid loyalty program do so because the benefits are so enticing that they have to be a part of it. These same customers usually have a history of seamless and memorable customer experiences that have endeared them to the brand. They have become brand advocates and seek a personalized, two-way relationship with the brand.

That strong emotional pull guides them during their ongoing brand advocacy.

These programs do a great job of identifying your best customers and transform them into spokespeople for your brand.

Paid Loyalty is About Instant Gratification

We live in an instant world where customers expect things now.

These types of programs are designed so customers can pay a fee upfront in exchange for valuable rewards that they can use right away. It’s the opposite of a traditional, transaction-based loyalty program where the customer makes purchases over time and receives rewards later.

Are free loyalty programs really free?

Patience, or the lack of it, defines so many customers today. A traditional loyalty program doesn’t elicit nearly the same enthusiasm for consumers as a these programs do. Consumers want what they want, and they want it now. Yes, you have to pay an annual fee with. But, as a member, you know the immense benefits and value you will receive immediately.

See why Lids’ paid loyalty program is a no-brainer for customers.

Paid Loyalty Provides Pure Allure

What a paid loyalty program boils down to is there is a “pure allure” for your best customers to want the best benefits and best value. When a brand offers a paid loyalty program, it targets its best customers with the benefits they want. Once someone signs up for the program, they can use those benefits anytime.

See how retailers are finding success with paid loyalty programs.

Where traditional loyalty programs train consumers to wait for discounts, that approach doesn’t create true brand loyalty. Instead, it creates a conditioned reaction. Creating a “pure allure” in your paid loyalty program produces even more loyal and engaged customers. When a brand offers loyalty program members benefits they can use anytime, the potential for increased engagement is great.

Paid Loyalty Focuses on Your Best Customers

While a paid loyalty program isn’t for all consumers, it is aimed at a brand’s best and most loyal ones.

Focusing on your top 20 percent of customers (who typically account for about 80 percent of your sales) should always be a top priority for any brand. Even if a paid loyalty program is launched and is successful, you should always stay on top of what your customers desire. Meeting those expectations in an ongoing manner is critical to retaining those customers and their brand loyalty.

See how free and paid loyalty programs can coexist to appeal to your entire customer based.

Paid Loyalty is the Best a Brand has to Offer

If you want to implement a program that creates the most customer loyalty, a paid loyalty program is the way to go. In a time of intense competition, retailers need to differentiate themselves in noticeable ways. A paid loyalty program can provide a path to noticeable differentiation.

When this type of program is managed correctly, the sky’s the limit for magnified engagement and sustainable customer loyalty.

This content is sponsored by Clarus Commerce. To learn more about Clarus, please visit them here.