The thought of a loyalty program, for most customers, conjures up images of a quick, free enrollment process that entitles them to rewards, incentives, and discounts in exchange for their undying support (not to a certifiable wealth of personal data).  Recent programs, however, have turned this model on its head and placed the onus on the customers to dedicate themselves to a brand, rather than the other way around.
This trend is caused by the increasing prevalence of paid loyalty programs, also known as “premium tier” programs. These programs have ushered in a new look for customer loyalty, one in which customers are encouraged to “vote with their dollars” and make an upfront financial investment in exchange for continued rewards and benefits offered only to these premium members.
This is the central theme of a new report from loyalty and CRM leader Inte Q. The report explores the tendency for customers to join these VIP programs, as well as the advantages for well-known brands to put these systems into place.
“Brands find value in these programs because of the self-funded nature - they generate a recurring high-margin revenue stream without inventory costs, capital investment or financial risk,” said Bill Stewart, Chief Revenue Officer for Inte Q. “Paid-tier programs are paving new ground in the mature field of loyalty marketing and brands are using these programs to take customer engagement to new heights. Think Amazon Prime, GameStop or Restoration Hardware - these companies understand the value.”
The most famous of these premium programs is almost undoubtedly Amazon Prime. With Prime, visitors to the ecommerce giant pay $99 annually for access to benefits including free two-day shipping, deep discounts on items, a video streaming service similar to Netflix, and a Kindle lending library that offers monthly free ebooks to members. For the brand, this allows increased focus on the most loyal customers, rather than needed to spread rewards across a larger consumer base.

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