We've all heard marketing strategists and brand managers wax poetic about the merits of Starbucks and Panera Bread when it comes to the loyalty game. Who's making the biggest splash right now? Here, we take a look at five companies with their eyes on the prize.

1. From the Pros: 5 Companies With Loyalty Programs That Actually Work
We’ve all heard marketing strategists and brand managers wax poetic about the merits of Starbucks and Panera Bread when it comes to the loyalty game. Who’s making the biggest splash right now? Here, we take a look at five companies with their eyes on the prize.

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One.
DSW Rewards

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DSW thrives on an almost weekly rotation of products that
drives repeat visits and purchases, so the shoe behemoth
didn’t have to twist too many arms to join its now-beloved
rewards program.
The system itself is fairly straightforward: Customers earn
points for every purchase, and those points eventually
turn into $10 reward certificates. Though the system isn’t
breaking a ton of ground, the brand is doing something
right; as of 2012, nearly 90 percent of its sales came from
program members.

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Why It Works
A high level of dedication to its ever-evolving product line
certainly doesn’t hurt, but the real win is how easy DSW
makes it to earn rewards. Customers get 10 points per
dollar on full-priced merchandise – and half of that on
clearance items – and it only takes 1,500 points to score
one of those certificates.
If you think that much access is ultimately asking for a
major financial hit, consider this: More than 20 million
members currently shop through the rewards system, and
the brand constantly drives unplanned purchases through
double-points events and special offers. Plus, DSW is able
to use data from the loyalty program to inform shopping
behaviors and trends, and that allows the company to tailor
its experience to how customers are already behaving.

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Two.
Amazon Prime

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Think of this one as a loyalty program in disguise. The
much-lauded Amazon Prime doesn’t come with earning
potential – that’s strictly the domain of the company’s
credit cards – but it bundles cheaper shipping, exclusive
deals and a whole host of free movies and television shows
into one annual cost.
The result, of course, is greater consumer allegiance to
the brand as a whole, especially when you factor in the
member-only free access to Amazon- and HBO-produced
content.

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Why It Works
Though customers have to pay for access to the benefits,
Prime’s potential savings well exceed the price of
admission within a month or two of use. It also appeals to
two distinct customer bases – those who order physical
items from the site and those who use streaming services
– while encouraging crossover purchases between both.
In other words, the free two-day shipping incentivizes
streaming customers to buy tangible goods, and the
free streaming gives ordering customers a reason to
favor Amazon over Netflix or Hulu. It’s an almost flawless
way to keep customers locked into the brand for literally
everything.

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Three.
Sephora Beauty Insider

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Like DSW, Sephora gets a little boost from inherent
customer excitement about the beauty and fragrance
industry as a whole. One peek at the droves of self-described
beauty gurus on YouTube proves that this
is a market capable of handling more than its fair
share of saturation.
Where Sephora out-competes department stores and
other dedicated beauty retailers, however, is with
a loyalty program that strives to create engaging,
long-lasing connections between the brand and its
fans. Beauty Insider is based on the standard earn-to-
redeem system, but its rewards are anything but
basic; customers can choose from limited-edition
products and makeup sets that are completely
exclusive to members and often designed
specifically for Sephora. Plus, the brand’s members-only
newsletters offer an extremely editorial edge to
the entire affair: proof that creative is just as crucial
as purchase drivers when it comes to achieving
customer loyalty.

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Why It Works
First and foremost, Sephora understands how its
customer base functions. Though some shoppers
certainly buy anything and everything, plenty stick
to their specific loves: makeup, fragrance and body
care with several levels of sub-interest attached to
each. To appeal to that behavior, Beauty Insider
eschews the one-size-fits-all approach for a system
that allows members to choose their own rewards
and earn season-specific product offerings. The
result is increased passion about not only the
program but also the brand itself.

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Four.
Target REDCard

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REDcard may hover closer to the credit realm, but its
benefits far outpace what even a standard loyalty program
could achieve. Through a network of store-branded debit
and credit cards, customers save five percent on every
purchase and get access to extras like free shipping and
additional return time. The result benefits the brand as
much as it does the customer; in 2013, nearly 17 percent
of Target’s sales came from cardholders, and membership
encourages a crossover between online and store-only
purchases.

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Why It Works
Who doesn’t want a discount on purchases they were
planning to make anyway? Because Target offers
everything under the sun and has an undeniable
advantage when it comes to encouraging impulse buys,
REDcard gives customers a reason to choose the retailer
over similar big-box brands. What’s more, that across-the-board
discount goes a long way in shifting overall attitudes
about the store. Though Target was already extremely
competitive with retailers like Walmart and Meijer, many
consumers mistakenly believed it to be the most expensive
of the bunch. This additional discount levels that playing
field.

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Five.
Jamba Juice Insider Rewards

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If you live near Jamba Juice’s coverage area, you’re
certainly aware of its role as the go-to brand for health-conscious
juices and smoothies. A points-per-purchase
loyalty program was a no brainer, but even the brand itself
couldn’t have predicted the success of Insider Rewards
when it rolled out in early 2014. Within six months, the
program had earned more than a million members, and
Jamba Juice executives believe they’ll double that number
by early 2015. Talk about a success story.

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Why It Works
Insider Rewards is relatively cut and dried, but the
program isn’t winning on those details: It’s all about the
technology. Rather than force customers to carry a card
or interrupt a transaction to ask an employee to add points
to their account, Jamba Juice uses a cloud-based system
that requires only a phone number for both registration and
redemption. What’s more, this method automatically alerts
customers when they’ve qualified for a reward and uses
behavioral data to tailor those gifts to the individual. It’s
a back-end redesign that completely alters the front-end
experience. In this golden age of mobile, that’s the way to
go.

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And of course, here is our shameful plug: we at FiveStars
can help you create a fully customized rewards program.
Your customers can sign up with just their phone number,
and it runs right on your POS. We work with you to set up
automated marketing and promotions campaigns using
the data we help you collect, including incentives to bring
back lapsed customers and special rewards on birthdays.
Setting up your customer engagement and retention with
FiveStars allows you to sit back and relax; we do all the
work for you.
Learn more about us at fivestars.com.