Ohhhhhh hey fam!

This last week, I’ve been doing a lot of shopping BUT I haven’t been spending all of my money. I’ve been redeeming LOYALTY REWARDS for free birthday gifts.

The beauty of being a loyalist is that you are rewarded for being loyal but what in us triggers the WANT and NEED to remain a part of that loyalty program? And what can we learn from this to build dope loyalty programs for our own brand or business?

Let’s break it down…

ON BEING A LOYAL ONE…

We get that loyalty programs keep your customers coming back for more. However, understanding the WHY behind WHY a loyalty program works is great way to actually build something that works and not just a random overlay onto your brand or business. There’s a reason why this is a retention tactic that works if done right.

First up, reward and gratification is the top trigger. Yes, duh Jess, we know that but before you roll your eyes…let me tell you WHY!

Immediate rewards, like a welcome bonus or first purchase discounts, tap into our innate desire for instant gratification by triggering a dopamine release, creating a positive emotional response that encourages repeat behavior. ←I want that, I need that. 

Think Sephora’s Beauty Insider program. They have built rabid fans who come in for their free birthday gift (don’t look at me 😶) and leave the store with a huge haul.

And guess what? They gonna talk about it too!

@ashleykourn

getting the sephora birthday gift just means i’ll be spending more money there 😅 beware!!!! #sephora #beautyinsider

👆👆👆👆👆👆👆👆👆👆👆👆👆
Lots of dopamine triggers being released up in here and SAMPLING to drive people to eventually purchasing. ← Reciprocity

When a brand offers something of value to a customer, such as a welcome gift, birthday reward, or bonus points, it triggers a sense of reciprocity. Customers often feel compelled to return the favor by making purchases or remaining loyal to the brand. In which, our friend Ashley has done here!

On the other hand, delayed gratification, achieved through points systems and tiered rewards, builds long-term engagement by leveraging our future orientation and the endowment effect, where accumulated points or tiers foster a sense of ownership and attachment.

Which brings us to the next point about tiered memberships and exclusivity. Tiered memberships and exclusive access lies in the psychology of status and social comparison. We want to be wanted and we want to be recognized for it. Different membership levels tap into the human desire for recognition and achievement, with incremental rewards boosting self-esteem and satisfaction. Think gamification, in a way even though we are rewarding for purchasing, people drool at wanting to get to the next level of membership.

We love an example and I got TWO DOPE AF ONES FOR YOU:

Barefaced’s No Sun Club (retention powered by our friends at Recharge). I MEANNNNN, 4 tiers and one of the levels you get ‘voting rights’?! In addition to exclusive access to product and experiences! Talk about building a hook to get your customer to stick around.

Now lets all become a KITH Loyalty Member, and make it to their Vitality level! KITH’s newest program offers three levels of their program, Molecule, Elevation, and Vitality. I mean come on, even in the name of the levels, you have this desire to want to make it to the next level. Who wants to be a little guy called ‘molecule’? NOT ME or Eli Weiss (he loves KITH)

This point brings me to the last one, the good ol FOMO and scarcity trigger. 

Listen, no one wants to be left out. If a loyalty program puts expiration on points or has an exclusive offer ONLY to the loyalist, people are going to run and not walk to it. In the case of KITH, the higher you get the more exclusive access you have access to.

When presented with exclusive, time-sensitive deals, or levels of hierarchy, the brain's amygdala 🧬 (yes, I went there), which processes emotions, triggers a heightened sense of urgency and anxiety about potentially missing out on a valuable opportunity. This emotional response stimulates the release of adrenaline, prompting immediate action to avoid regret.

Scarcity leverages the brain's reward system by emphasizing the limited availability of rewards or products. The concept of scarcity activates the brain's ventromedial prefrontal cortex 🧬 , which is involved in evaluating value and making decisions. When an item is perceived as rare, its value increases in the mind of the consumer, prompting a rush of dopamine, the neurotransmitter associated with pleasure and reward. This heightened sense of desirability compels customers to act quickly to secure the scarce benefits, reinforcing the value of the loyalty program and deepening their emotional connection to the brand.

We have made it to the end, so lemme recap for you on how to build a loyalty program to help you with your own company’s success:

• Leverage Instant Gratification: Implement immediate rewards like welcome bonuses or first purchase discounts to trigger dopamine release, creating a positive emotional response that keeps customers coming back.

• Create Tiered Memberships: Develop different membership levels with increasing rewards to tap into the human desire for status and recognition, driving long-term engagement and loyalty.

• Incorporate Reciprocity: Offer valuable samples or gifts to foster a sense of obligation in customers, encouraging them to make purchases and remain loyal to your brand.

• Utilize FOMO and Scarcity: Introduce time-sensitive offers and highlight limited availability to create urgency and heightened desirability, compelling customers to act quickly and deepen their connection to your brand.

Loyalty programs are the bridge to making every customer feel special in a more scalable way. This combination strengthens emotional connections to the brand, which leads to long term loyalty and engagement. And we LOVE a loyal customer.

See ya next week. Same time, same place?

❤️ Jess

UPCOMING EVENTS

1. THIS WEEK!!! Laura and I are hosting episode 2 of Afterhours LIVE via Linkedin on July 22nd at 5:30PM CST.
   
   We will be breaking down another brand from consumer insights, brand strategy, marketing strategies and the customer experience! We have gut feeling you won’t want to miss this one.

   🔗 SIGN UP HERE
   

2. EmpowHER (Nicole Harvey’s BB) x Sydney James are hosting a golf scramble in NYC on August 8th.
   🔗 SIGN UP HERE

3. Dillon and I are plotting and planning a very FUN AF Midcoast Presents: Casino Night for Shoptalk Fall in Chicago on October 14, 2024! 

   
   We are still in planning mode, but if you are interested in being on the list for when RSVPs are open, SIGN UP HERE.
   

4. Dillon, Nicole and I are plotting and planning SheInnovates 2!!!
   Sheinnovates is an all women’s summit for those in ecommerce. Location will be Brooklyn, NYC on November 14, 2024.
   
   If you are interested in being on the list for when RSVPs are open, SIGN UP HERE.

BEST PIECE OF CONTENT I’VE SEEN THIS WEEK…

THIS WEEK’S DOPE JOBS

Where my product marketing folks at? Recharge is hiring for a Product Marketing Manager, Enterprise: https://lnkd.in/gG7Raama

Public Rec (a Chicago company) is seeking a CMO! We love an athleisure vibe. https://lnkd.in/gRdU3PWt

My besties over at Postscript are seeking a Director of Customer Support in Phoenix. https://lnkd.in/gC7H922F

Continuing with the Chicago vibes, The Blackhawks are seeking a Brand Manager. https://lnkd.in/g_EZHtx4

Ridge is hiring for a Director of Customer Experience. If you are one of the CX homies looking, highly reco! https://lnkd.in/gkqTc4iT

👐 BONUS CONTENT 👐

Laura and I’s After Hours LIVE episode on Youtube.
Join us July 22nd at 5:30PM CST for Episode 2, SIGN UP HERE
👇👇👇👇👇

This week, I sat down with my homie Michael Bair, SVP of Customer Experience at FIGS to chat CX, CS, Data and just LIFE.

Check it out here:

And just because we out here talking about loyalty this week…

A WORD ON THIS WEEK’S SPONSOR

Recharge is a leading subscription management platform that enhances customer retention and drives business growth. With advanced analytics, robust support, and innovative tools, Recharge empowers merchants to create personalized, engaging experiences.

By focusing on the OVERALL subscription journey, Recharge helps brands build lasting customer loyalty and deepen connections, ensuring customers feel valued and appreciated.