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Just as consumers and businesses successfully wrap their arms (and marketing strategies) around loyalty programs, many brands and marketers have turned the system on its head with the rise of paid (often called “premium”) loyalty programs. While most still offer a freemium version of their program, the premium model allows them to connect with their most loyal customers and offer more personalized and exclusive experiences.
Even with those advantages in mind, asking your most valued customers to pay for the privilege of these amped up offerings may seem counterintuitive. But successful programs from Amazon, AMC, GNC, and more have already proven the premium loyalty format works. These premium programs continue to evolve, and have already altered the loyalty terrain in a variety of ways:
No point system? No problem. You need look no further than retail giant Amazon and its Prime program for one of the biggest shifts in loyalty: the fuzzy line between subscriptions and premium loyalty programs. The former requires buy-in for all services; the latter offers additional discounts or services to customers who pay for additional perks. Amazon Prime practically invented the premium loyalty model and continues to invent new ways to be indispensable to its customers — including Prime Day, streaming music, movies, and original programming.
This constant flow of added value has built incredible brand and emotional loyalty with Amazon’s customer base, transforming them from consumers into advocates. They’re not only financially invested in Amazon Prime, they’re emotionally invested too. As reported by Forrester, 80% of Prime customers who have been a part of the program for at least three years “trust Amazon to treat me like a valued customer.”
A premium loyalty program can narrow the playing field and help you zero in on your customers based on how invested they are in your business. Premium programs have raised the bar on personalized and exclusive experiences.
The AMC Stubs program, which recently reached a 20 million households milestone, is a perfect example of this. Its tiered system personalizes experiences for its members based on where they are in their loyalty journey. Customers can start out with the free AMC Stubs™ which provides access to basic (but valuable) benefits. From there, they can advance to the first paid tier, Stubs Premiere™, which offers more discounts and perks. And finally, Stubs A-List™ members receive the most exclusive experience: serious discounts, events, screenings, and more.
No, we’re not just talking about the cost of enrollment. Loyalty membership fees can drive some revenue, but the potential financial impact of paid programs goes well beyond that initial buy-in from consumers. Premium loyalty has already proven to increase frequency and spend among members.
The additional investment and added benefits keep customers coming back,boosting spend and loyalty in the long run. For example, premium members of GNC’s paid loyalty program visit stores and complete purchases twice as much as non-members.
Paid programs allow brands to further incentivize their most loyal customers and create advocates to spread those glad tidings even further. If you’re ready to dive into the next level of loyalty, contact Cheetah Digital here to start exploring next steps for your premium loyalty program.
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