Loyalty programs: Customers demand more perks for their return business
Loyalty card or similar programs can be more than just a way for companies to note consumer buying habits
Customer loyalty can be a financial boon for businesses and a money saver for shoppers and clientele.
Information technology services and consulting company Accenture says about 90% of companies have a loyalty program.
Businesses large and small, chains and independents buy into the need to provide incentives to customers to keep them coming back. It might be in the form of spending money on groceries and then getting discounts on gas, it could be getting a free smoothie after a certain number of purchases, or it could be a free spa treatment once you have spent a requisite number of nights at a hotel.
More people in the United States are joining loyalty programs, according to Forrester Research, which is based in Massachusetts and has an office in San Francisco. In 2022, 86% of adults in the U.S. belonged to at least one program. That number has increased to 89% this year.
“I think part of it is driven by inflation and I think people want to save money,” principal analyst Mary Pilecki said. “They are also demanding more and want more from loyalty programs.”
Variety of programs
Sports Basement, which has 12 locations in the Bay Area, including in Novato and Santa Rosa, has the Basementeer program. Even though there is a one-time $25 fee to join, Marco Naranche, assistant manager in Novato, said close to 80% of customers belong to it.
“It’s been very successful for sure,” Naranche said. “When they sign up they are giving us their phone number which we use as their code to get the discount.”
Every Basementeer gets 10% off each purchase, including sale items, at any of the chain’s stores. The only items that don’t qualify for discounts are rentals — such as ski/snowboard equipment and tents, as well as shop labor such as bike tuneups.
The company in turn distributes 10% of profits from Basementeers to local charities, with more than $1 million donated in 2022.
Emails are used to send Basementeers information about specials; it’s also how customers get their receipts.
At Bag O’ Crab restaurants each franchise owner is allowed to implement a loyalty program specific to his or her location. North Bay locations include Vallejo, Vacaville, Fairfield and a location that opened this year in Santa Rosa.
The Vallejo site has customers accrue one point per every dollar spent. There is no cost to sign up; which can be done via an app or at the restaurant by using a phone number. Points may be redeemed for various menu items.
“We have about 10 sign-ups per day,” Derek Carver, general manager, said. “They can build up as many points as they like. We have customers with 10,000 points and some with five points.”
For people who go to Calistoga Depot in Napa Valley, they will notice a change in the incentive program. Prior to June the coffeehouse-eatery used a punch card system where five coffee purchases resulted in the sixth one being free.
Now it’s electronic, with tracking being done via a telephone number. Customers accrue one point for every dollar spent, with freebies including a barista beverage or sandwich.
“Mainly it's a way to say thank you to locals and show we appreciate them,” manager Katlin Kiehl said.
Major hoteliers have been in the loyalty rewards business for eons. This includes the Fairmont Sonoma Mission Inn in the town of Sonoma. The program is called ALL — short for Accor Live Limitless.
Points are accrued based on dollars spent — which can come via room nights, restaurants at the property, the spa and other amenities.
An advantage to belonging to Accor, which costs nothing to join, is that it’s not just Fairmont properties that are part of the plan.
“Accor Live Limitless program gives you the opportunity to earn points on purchases and stays at its worldwide properties, plus nights spent at onefinestay vacation rentals and luxury train bookings on Orient Express. Accor also has an alliance with several airlines, meaning you can earn points or use them as frequent flyer miles,” explained hotel spokeswoman Michelle Heston.
Rental car companies also have loyalty programs, and car dealerships have launched incentive programs of their own.
“Most luxury car owners are leasing. When you lease a vehicle here you get a better deal on the next lease,” Colt Davis, sales manager at BMW of Fairfield, said.
He admitted, though, “The deal is very subjective.” It’s all up to the factory, not the individual dealerships, Davis said.
