The sales culture we once knew is changing. Back in simpler times, key discount events dominated retail calendars. Black Friday, seasonal promotions (like Valentine’s Day), and end-of-season sales guaranteed quick sales spikes. Today, these very specific sales periods have become less relevant.
Our research has shown that discount alternatives make customers feel just as good as discounts do. While 76% of those we surveyed said that discounts make them feel positive towards brands, those same respondents feel positive about brands that offer early access to sales (72%), or new products (70%).
This blog post will explore six discount alternatives that make customers feel good about brands and increase brand loyalty.
Loyalty points and rewards
Shoppers have shown extremely positive sentiments towards brands that provide loyalty points. In fact, 77% of customers feel positive or very positive about a brand that provides loyalty points that are redeemable against future purchases.
Loyalty points are a draw for a variety of consumers at various stages of the consumer lifecycle. When deciding whether to join a loyalty program 69% say that the loyalty points and rewards are a decisive factor. Equally, 69% of respondents said that loyalty points are key to making them return to a brand after they haven’t bought from it in a while.
When asked to think about their behavior during sales peaks, 73% of respondents said that loyalty points would get them to make a purchase. Giving customers points for shopping and engaging gives them the same surge of oxytocin that discounts do, without you lowering your prices.
To make the most of this opportunity try running double point days – when a customer gets double the points for every dollar spent – or launch bonus point events in place of discounts. Some brands like Bath & Unwind, have been using double point events effectively to stir up excitement around their loyalty program.
As loyalty program members see their point balance grow, they’ll return to redeem rewards. This will accelerate their next purchase and make them feel good. So much so, that they’ll continue to return to your brands to get that feeling over and over again. Their spending will also be higher: we’ve found that customers who redeem rewards have a 165% higher annual spend than customers who don’t.
Exclusive and early access to sales and products
Exclusive and early access to sales and products is a reliable way to drive positivity about your brand. 70% of consumers feel positive or very positive about a brand if they can get early access to new products, while 72% have the same positive feelings when given early access to sales.
It is important to try to balance discounts with experiences for existing customers. You can achieve this by offering your most valuable customers early access to your sales, new products, or limited-edition items. Not only will these perks make customers feel like VIPs, but they’ll be more likely to tell others about the positive experience too.
Pinpoint who your most loyal customers are and move them into the top tier of your loyalty program. Here, let them unlock early access to your sales or new products. You could also launch an exclusive bundle or limited-edition product to loyalty program members to build that VIP feeling.
The premium skincare brand, AKT London, has an excellent loyalty program that provides exclusive perks to members in their higher loyalty tiers. For example, while you can exchange points for discounts and receive bonus birthday points at their “The Beginner” level, at “The Professional” loyalty tier you’ll also receive priority access to new product releases and exclusive discounts on products.
Free or discounted shipping
81% of consumers feel positive or very positive about a brand that offers free or discounted shipping. Our research indicates that it is one of the most important factors driving consumer positivity.
When we asked, “What makes you likely to return to a brand after making a purchase?” 69% said free or discounted shipping. Similarly, when we asked, “What makes you sign up for a subscription with a brand?” 62% said the same perk would motivate them. Evidently, better shipping options are a great way to motivate customers to get involved with your loyalty program.
Free shipping allows you to replicate the feel-good factor of a financial reward without cheapening your products with discounts.
If you can’t afford free shipping for all, try offering different levels of shipping perks based on a customers’ loyalty. For example, only offer free shipping to members in the highest tier of your program. For other customers, give them a shipping discount if they spend over your AOV. This allows you to limit the impact of low-profit margins, while still providing a compelling alternative to sitewide discounts.
To limit shipping costs while maintaining a high-standard customer experience, you could also put in place automated returns processes based on customers’ loyalty to your brand.
Contribution to a charitable initiative
Today, more consumers are conscious of the way brands are contributing to social, environmental, and other charitable initiatives.
In fact, 67% of consumers feel positive or very positive about a brand that provides them with the opportunity to contribute to charitable initiatives that are aligned with their personal values. While 62% said that this opportunity to support charitable initiatives would get them to make a purchase.
Customers are shopping more mindfully, prioritizing brands that align with their values. If you connect with your shoppers on an emotional level, when they’re ready to make a purchase they’ll come to you first as they already love what you’re about.
Show you’re aligned with your customers by letting them contribute to initiatives linked with their values. You could let them trade in loyalty points to plant trees. Or, spend their points on charitable donations.
The natural Food-Grown supplement brand, Wild Nutrition, have embraced a variety of features to craft an engaging loyalty program that is true to their brand. One of their key strategies has been creating a strong emotional alignment with customers.
When you belong to Wild Nutrition’s loyalty program, you can claim rewards that are aligned with your personal beliefs and give back to the planet. For example, when you reach 1,000 points you can plant five trees in Rwanda or in the Amazon. Alternatively, you can use your 1,000 points to donate to Plastic Oceans UK.
Customers will be more likely to spend with you again if they know their purchases aren’t only benefiting them, but the planet and others in need too. You can then also create content that shows the impact you’ve made through these initiatives and use it across your marketing to get buy-in from new customers.
Membership to an Insider community
Last but not least, we’ve found that many consumers find membership to an insider community an enticing factor when thinking about joining a loyalty program. Indeed, 55% of consumers feel positive or very positive about a brand that provides them with membership to a private community.
54% of consumers say they would be loyal to a brand if they become part of a like-minded community. This should encourage brands to give their most loyal customers membership to a VIP community that packages all their alternatives to discounts in one place.
Within this Insider community brands can post about early access to sales and give members points for engaging with key pieces of content. This will encourage customers to maintain a relationship with your brand, regardless of whether you’re running a sale.
A great example of making the most of an Insider community is the approach by Astrid & Miyu, the contemporary jewelry brand. Astrid & Miyu give their community loyalty points for completing non-transactional activities; like making referrals, writing reviews, or creating user-generated content (UGC). They then use this as evidence across their site and social media to show new customers that their products are trustworthy and that being a part of their community is worthwhile.
At a time when consumers are savvier with their spending, discounts still have a part to play in your day-to-day operations. But they don’t always bring in the right kind of customers.
Alternatives to discounts promote equally as positive sentiments towards a brand AND drive sales, and most importantly, repeat purchases.
Substituting promotions for the alternatives we’ve outlined here will reduce your reliance on discounting and build stronger, long-term customer relationships that keep your profits high all year round.
To learn more about loyalty programs and the value of discount alternatives download “The Discounting Playbook”.