Taking a page from airline programs, more retailers are adding elite levels with extra perks to their loyalty packages. But shoppers may find membership nearly as pricey as a first-class airline ticket.
In July, Sephora relaunched its Beauty Insider program, adding a reward level with free shipping, early access to new products and sales as well as VIP event invites for shoppers who spend $ 1,000 or more in a year. Around the same time, flash-sale site Gilt.com introduced its Gilt Insider Program, awarding shoppers five points per dollar spent and weekly bonuses for interacting with the brand. Tiers with extra benefits such as exclusive sales and a VIP customer service line kick in at the 5,000-, 10,000- and 25,000-point thresholds.
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“To make it fair we crafted a program that rewarded engagement, i.e. site visitation and social interaction, in addition to purchasing, so that members could advance up tiers as they earned points,” said Elizabeth Francis, Gilt.com’s chief marketing officer.
They’re not the only retailers to add extra perks for big spenders in recent years. Nordstrom and Best Buy beefed up their tiered rewards programs last year, and Starbucks, Gap and DSW are among the companies that also divide loyalty rewards by spending level.
When pretty much every retailer is offering a program with points per purchase, tiers offer that extra incentive to choose one over another, said Jeff Berry, senior director of knowledge development for LoyaltyOne. “It almost has become the overall scorecard for customers, so they understand where they are relative to where they could be,” he said.