The growing usage of loyalty programs by D2C brands

Authiored by Dhruv Verma, Founder and CEO, Thriwe

In the fast-paced, short-lived memory, and continuous exposure to social media, brands are officially fighting for time from their customers and audiences. And this goes up notches higher for brands in the D2C space, where not only are they to put themselves out, but also ensure direct feedback is received across digital platforms.

The digital-first world we live in is seeing D2C (Direct-to-Consumer) brands constantly vying for attention in an already cluttered marketplace. Competition is getting stronger than at any time before, and brands are always on the lookout for new and innovative marketing activities to keep high brand recall.

So, what can be a unique or more personalized solution for customer retention? The answer is building loyalty. Once a customer has trust and faith in your product, services and after-services, he or she will return.

Here comes the idea of building brand loyalty programs. Brand loyalty develops when a brand strives to create an experience that makes consumers feel valued, heard, and part of something bigger. When done right, a loyalty program does more than just reward—it builds emotional connections that last.

Why is it important for D2C brands to have loyalty programs in place?

Loyalty programs are no longer just about giving a discount here and there. They have evolved into personalized, community-driven experiences that keep customers engaged. It’s been proven via various studies that more than 60% of any company's revenue comes from repeat businesses and customers. More than 80% of consumers recommend brands that have good loyalty and give back programs.

As per Bain and Co, increasing customer retention by 2% can have the same impact as reducing costs by 10%.

Here is why they are a game-changer for D2C brands:

Loyal customers are the backbone of any brand. A well-designed loyalty program incentivizes repeat business, turning first-time buyers into long-term customers who keep coming back for more.
These programs allow D2C brands to build and sell an identity. It’s not just a transaction – it is about making customers feel like they are part of a tribe, creating a deeper emotional connection of the brand with their customers and consumers
In a data-driven age, the most essential asset for any brand is consumer data. Loyalty programs offer an ethical way for brands to acquire this valuable information and later by tracking customer purchases, preferences, and behavior, brands can gain insights that help refine offerings, personalize marketing, and improve the overall experience.

How D2C Brands Can Supercharge Loyalty Programs

It’s noticed that nearly 90% of consumers are likely to make repeat purchases at companies with excellent customer service. D2C brands should not just merely make loyalty programs but strive to make it a memorable experience.

Here are some tips on doing so:

Hyper-Personalization: Beyond using a customer’s name, personalization involves making every reward feel bespoke. Think of Coca-Cola’s “Share a Coke” campaign, where personalized bottles created a buzz. By recommending products based on past purchases or offering exclusive deals on birthdays, you can make customers feel seen and appreciated.
Gamify the Experience: Loyalty programs don’t have to be boring. Brands like Starbucks have gamified their rewards programs to add excitement. Think points, badges, challenges, and levels - customers love working their way up. It’s like earning XP in a video game but with real-world perks.
Omnichannel Consistency: Whether it’s through a website, mobile app, or in-store experience, your loyalty program should work seamlessly across every touchpoint. The more accessible it is, the more likely customers will stay engaged. If a customer can rack up rewards no matter how they interact with your brand, they’ll stick around.
Create a Sense of Belonging: Successful loyalty programs are not just transactional; they foster community. Offering exclusive experiences like sneak peeks, or early access to sales and events entices the members to continue with the program subscriptions. As a consumer, would you rather stay loyal to a brand that treats you like part of an inner circle or just a regular customer? It’s simple, isn’t it?
Sustainability Matters: In today’s world, eco-consciousness is crucial. Integrating sustainable choices into your loyalty program - whether it’s offering points for eco-friendly purchases or rewarding customers for recycling - will resonate with socially aware consumers.

D2C brands today have a lot of opportunities to build strong relationships with customers. Ensuring a first-time buyer stays forever loyal and turns into a brand advocate is easily possible via a good and detailed loyalty program. By focusing on personalization, community, and seamless integration, D2C brands can create loyalty programs that not only keep customers coming back but make them feel like they belong. In today’s competitive landscape, that’s the ultimate win.

DISCLAIMER: The views expressed are solely of the author and Adgully.com does not necessarily subscribe to it.