Successful Loyalty Programs in Luxury

Industry

The successful implementation of loyalty programs in the luxury industry has been far from perfect but one thing is to be said, loyalty in luxury works… it actually works really well. Especially when trying to retain the specific type of customers that really represent your brand image and for a luxury brand that is a wealthy customer.

One key statistic to take note of is the fact that “wealthy consumers make up only 20% of households but they account for 40% of all consumer spending”. These types of customers are at the core of luxury brands, therefore it is vital to appeal to them not only through the products but also through the experiences and stories that come from the brand, which are often conveyed best when there is good brand-fan communication that is established through solutions such as loyalty programs.

The Brands that Succeeded

As previously mentioned loyalty in the luxury industry has seen both sides of the coin, the success of it all and the failure of using technology.

Some brands have taken their first step to secure a more successful future for their brand, through the use of technology by ditching simple earn & burn programs for a perk/tier system that consumers can join and “level up” in.

Hugo Boss

Take the “Hugo Boss Experience” for instance, this innovative loyalty system uses a perk system that is free to join for consumers and uses a lot of experiential rewards in comparison to transactional ones. Introducing cool hybrid rewards like free door-to-door uber delivery of purchased products, for an extra luxurious feeling.

Hugo Boss Experience Program

By making the customer feel like they are being spoiled and like they are the center of the world. They are the most important part of your business, therefore you should always work on enhancing the experience through loyalty programs like these.

Luisa Via Roma

Another example of a brand that successfully built greater brand loyalty and enhanced its brand image, is Luisa Via Roma.

The Privilege Program

Their “Privilege Program” uses a ‘status’ system, which essentially resembles a tier system with different benefits based on the user status. Some of these benefits include early access to upcoming products and even luxury experiences personalized for the user. It’s these types of rewards, which users truly appreciate and ultimately use as determinants for their next purchasing decision.

NICCE Clothing

Alternatively, another successful loyalty program was NICCE Clothing’s loyalty token system. Their ‘N coin’ is earned on purchases as well as different actions such as referrals or even using social media actions (likes/follows). These types of earning options incentivize positive user behavior as well as grow brand loyalty as a whole.

NICCE's Loyalty Program

Above is an example of NICCE’s loyalty program, as can be observed the interface is easy to use, so it comes as no surprise that fans are willing to go through all these steps to get extra coins to spend on vouchers for shopping and even for shipping.

Key Takeaways (TL:DR)

What should be taken into account is the success of technology and the way brands are utilizing this technology to provide customers the best experience.

  • Give your customers variety in the options.

  • Make the process enjoyable and exciting for the customers.

  • Try to shift vertically and create new loyalty systems instead of moving horizontally.

  • Brands that are capitalizing on loyalty with new tech are experiencing greater one-on-one communication and are enhancing the brand image, which in turn boosts brand loyalty.

Loyalty in the luxury industry has been developing in the right direction and technology is certainly supporting this transformation but again we can’t make this change for granted. Instead, it is vital that we involve ourselves in the process and seek to better understand how these success stories can be used effectively as learning opportunities.

“When true technology adoption is achieved, the life of the user is improved.” – Dannah Cahn

There are no special tricks or short-cuts, the answer is within our grasps. Technology is the means to transformation and not the end itself, it is critical to understand this and clearly reflect on the current state of the industry as well as what the next steps are for luxury. With this, brands can pave the way for innovative ways of loyalty to nourish the industry.

Stay tuned for more posts in the coming weeks and as always stay safe, stay loyal, and always stay hungry!

More soon,
Your qiibee Team

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