Effective Loyalty Reward Schemes

Refillable packaging: Unlocking mass adoption. Consumer unfriendliness is the No.1 reason refills fail. It’s a strategic imperative for beauty brands aiming to connect with eco-conscious consumers. Despite clear benefits, friction persists. Scaling requires removing emotional and practical barriers. The global refillable packaging market, valued at $42.5B in 2023, is set to reach $53.6B by 2027 (CAGR 6%), yet adoption remains limited beyond early users. >>Offer tangible INCENTIVES<< Build loyalty programs around refill usage, offer discounts, cashback, or exclusive perks for bringing back containers or purchasing refills. Make the economic benefit visible. For example, L’Occitane reports that 90% of its eco-refill users return due to cost savings alone. +74% Gen Z consumers say they are more likely to be loyal to brands that reward sustainability behaviors. >>SIMPLIFY Customer Journey<< Make it as easy as buying new. Remove friction with subscriptions, simple e-commerce, clear refill stations, and mobile support like QR codes. For example, a pilot by Unilever, simplifying the refill station process led to a 54% increase in repeat usage. +39% consumers cite inconvenience as the main reason they avoid refills. >>Communicate: Radical CLARITY<< Educate consistently with signage, staff, social media, and tutorials. Tackle hygiene concerns and be transparent, especially in beauty. 78% Gen Z want to know exactly how sustainability claims are delivered. +Only 28% consumers fully understand how refillable systems work. >>Overcome psychological BARRIERS<< Use behavioral nudges to frame refills as smart, ethical, and cool. Ease entry with reminders, trials, and starter kits. Rebrand refills as “recharge” or “reset” to fit lifestyle identity, key for Gen Z, who value purpose-driven choices and routine-friendly solutions. >>Create a CULTURE of Refill<< Make refillables part of the brand's community narrative. Spotlight real users in your social media. Use UGC, testimonials, and influencer partnerships to normalize refill culture. +32% higher conversion rates for refillable lines in Brands using social proof tactics. >>Design for APPEAL<< Make refill packaging premium, ergonomic, and stylish. Gen Z and Millennials value aesthetics as much as ethics. Think luxury materials, modular formats, and personalization. Fenty Beauty, for example, turns refills into fashion statements. +67% consumers say refill packaging lacks the design appeal. Final Thoughts: Refill is a movement, if friction is removed. Objections are design and communication challenges. To go mainstream, make sustainability the easy choice: incentivize, educate, simplify, and celebrate reuse. Find my curated search of examples and get inspired for your next success. Featured brands: Aime Wild Susanne Kaufamann Stich Make Sense Fenty Edone Maya Happy Me Laneige Fara Homidi Fils #beautybusiness #beautyprofessionals #sutainablepackaging #refillablepackaging

I keep hearing the same complaint from UPI RuPay credit card users that “Why don’t we get anything back on daily chai ☕ or sutta 🚬 spends?” As most cards reward you for minimum spend of 100, 200 or 500 INR txn this use case gets ignored. Real life use case is to just spend ₹10 at the nukkad tea stall on daily basis and some time to grab bread from nearby grocery store. Now if there is a problem I had to do what I do best. I researched and found a card which reward me for even ₹10 at the nukkad tea stall 🎉 It is Kredit.pe Yes Bank ACE Credit Card. - Lifetime free - Flat 2% cashback on merchant UPI spends (No limit on cashback earnings) - Flat 1% cashback even where CC-on-UPI isn’t live (capped at ₹10k) - Easy approval with just ₹25k/month salary - Super simple app experience - Not the reason to get it but they give ₹1000 joining bonus in Kredit.pe cash - many other benefits on offline and online purchase but you should use your primary card for that And compared to others, none of other UPI cards are good enough for this case. - Axis Super Card’s 3% reward sounds great, but min txn of ₹100 and tough approvals, very few actually get to use it even if they ignore chai bread use case for a moment. - Kiwi (1.5% to 4.2%) now needs a ₹100 minimum spend (up from ₹50), which kills rewards on petty daily spends and require >1.5 lac spend/yr to get 4.2% return. - The rest sit at 1–1.5%, with caps, fees, and too many conditions. So What is the catch, everything can't be perfect. - Redemption of this cashback is via vouchers with tiered slabs like smartbuy capping of 70% but here capping is 6-100% depending upon voucher. - Not the smoothest, but definitely not painful either. So Kredit.Pe x YES BANK Ace is the only credit card that makes ₹10 txn rewarding and it’s not a small feature. That’s a quiet disruption hiding in plain sight who is building for real India. If you’ve been searching for a card that actually rewards daily petty expenses or big ones if you forget your cards at home like me then you might just have your answer here. ( 👇 Link to apply is in comments, only get it if it makes sense for you.) Note: I do get a small referral bonus if you apply through my link and it will support my work. This isn’t a paid promotion though honestly, I wouldn’t mind if someone will pay me for all this research and experimentation. 😉

What makes Sephora’s 38m+ member Beauty Insider program so effective? I sat down with Emmy Brown Berlind, SEPHORA’s SVP & GM Loyalty to find out. The podcast link is in the first comment. Really worth a listen for anybody working in loyalty – Emmy (and Sephora) are doing some brilliant stuff. Here are the big three themes for me (with an example of how they bring it to life): 1️⃣ Valuable, not transactional 1️⃣ → Members get real value for desired actions, BUT it isn’t just a simple earn-and-burn proposition or a barrage of discounts. Sephora really keeps the rewards fresh, with an ever-evolving mix of items available in the Rewards Bazaar, changing birthday gifts, etc. 💡 Example: last month, Sephora added an exclusive Rare Beauty (Selena Gomez’s brand) bundle with a vanity mirror, journal, hair clips, etc on the Rewards Bazaar, redeemable for 1000 points. 2️⃣ Personalized, not spammy 2️⃣ → Beauty is a really personal category. Brands waste lots of calories sending irrelevant messages to customers. Sephora uses Beauty Insider as their data engine, rewarding members for sharing data and putting it to use in a transparent, valuable way. 💡 Example: Sephora runs gamified challenges like Passport to Beauty which reward members for sharing relevant data and learning about Sephora’s offering, like 100 points for coming in-store for a ColorIQ shade matching. 3️⃣ Omnichannel, not siloed 3️⃣ → The BI program rewards members who are engaging across Sephora’s shopping and marketing channels. The in-store experience rocks and leads to tons of new product discovery, so they invest heavily in celebrating & promoting that. They’re also expanding to be in 1,100 Kohl's stores nationwide by 2025, so the in-store experience is incredibly accessible. 💡 Example: one of the Passport to Beauty ‘stamps’ was Buy Online, Pick Up In Store (BOPIS), which helps members get their items same-day while discovering new products. This is a best-in-class program in so many ways. Most importantly, it’s just plain fun for members. Gamified, evolving, omnichannel, and filled with tons of ‘wow’ moments. Definitely one of our most innovative customers at Talon.One. We’re thrilled to be supporting them on program tech. Check it out – would love to hear your thoughts 💄 https://hubs.li/Q02nx7BV0 #loyaltyprograms #loyaltymarketing #customerloyalty #sephora

Club Brugge understood the assignment: even if they lose a game 😨 they can’t lose their paying customers 🤑 Then grew attendance to 140%.. Ok so in sports what happens when a team does not win - fans don’t show up - no merch sales - no F&B revenue - empty seats: bad player experience Downward spiral. the other day I heard Thomas Rypens explaining how they wanted to be less dependent on their team's wins Meet the "Fandom" program: 1. they did conducted qualitative research to understand why fans weren't attending matches, even those with season tickets. Factors included RAIN and poor team performance etc 2. they applied the "jobs to be done" framework, realizing fans weren't just buying a seat but an experience and a sense of belonging 3. To be more independent from team performance, they introduced "The Gold Project." Fans could earn "Gold Membership" by attending 90% of games or reselling their tickets 4. This focused on achieving and earning, making the rewards "priceless" 5. 2 customer segments: in stadium / on the "sofa" (1.2-1.8 million) --- focusing on "behavioral loyalty" for the stadium fans. 6. asked fans what rewards they wanted, including things like giving the kickoff to a game, and considered the impact and effort of each reward in a matrix! 7. Results showed a stronger second year, with a 40% increase in engagement from "fluid fans" (those harder to capture due to online gaming etc.) and an 11% overall increase in attendance, reaching 111%! This led to a better atmosphere, increased F&B revenue, and ultimately, football success. My biggest takeaway? Running a football team is no easy feat 😅 many moving parts, and things can spiral down Any points that surprised you? Comment below! I really liked #3. Come to 90% of games or RESELL your tickets. Thx for the amazing days in Ghent earlier this moth Simon Tavernier, CLMP™ Amanda Fleuridas, Certified Loyalty Expert™ Tom Peace, Certified Loyalty Expert™ Olga Khoubaeva Orlando W. and all! #loyalty #football

Points-only loyalty programs may look simple, but they’re quietly draining your margin. Most brands default to “1 point per $1” and rely on breakage to offset the cost. It almost never add up. Quick math: 1% breakage on $1M GMV still leaves $10K in liability on your books. With a 12% net margin, a 5% point cost takes away almost half your profit. A stronger approach is a blended model: For example, cashback on high-ticket SKUs to lift AOV, vouchers to clear overstock, and points to sustain everyday engagement. With Gameball you can easily tag products, adjust base earn to 2%, and still push 8% cashback on slow movers, all in a single workflow. How are you designing rewards that drive growth without burning through margin?

We can do better!! Destinations are doing their best to face the overwhelming affluence of tourists around the world. Tourism is booming, but many destinations are struggling to cope. Restrictions and increased fees are becoming common, but is there a better way? Denmark's Copenhagen offers a refreshing approach. Instead of limitations, they're incentivizing sustainable behaviour. Starting July 15th, tourists who demonstrate eco-friendly actions like cycling, train travel, and beach cleanups can earn rewards like free museum tours, kayak rentals, and even meals! This innovative program, CopenPay, transforms tourists from environmental burdens to agents of positive change. By rewarding sustainable choices, Copenhagen is leading the way in responsible tourism. For instance, those who arrive by bike or train at CopenHill, an artificial ski slope built on top of a new waste management centre, will be able to go down the rooftop hill for free. or Copenhagen Surf School will offer a free lunch to surfers who take part in 30 minutes of beach cleaning after their surf course. What do you think will work better? Restriction or Positive actions? Photo by Peter Lloyd on Unsplash

Bad referral programs have one thing in common: They expect too much effort for too little reward. • “Share with 10 friends and get $5 off” • “Refer a friend, and they get 10%, you get 10%” (too small) • “Earn points over time and maybe get a discount later” (nobody cares) The fix: Make it instant & worth it. - Make it feel like a “gift”, not a transaction - Give the referrer an immediate discount, not future points - Test a high value reward for a limited time (e.g., $25 off your next order instead of 10% off) People don’t refer unless it’s: 1) Fast 2) Simple 3) Actually worth their effort Put yourself in your customers shoe.. .and create a program, you'd want to be a part of.

I analyzed 100+ loyalty programs in the last 30 days. Most brands still run loyalty like it’s 2009: Earn points, get a discount, repeat. The top 10%? They’re using loyalty to change behavior- not just reward it. If I were Head of Loyalty at a $10B+ brand today, here’s exactly what I’d do to build a program that drives LTV, repeat purchases, and real retention: 1. Stop Giving Away Loyalty - Make Them Pay for It Costco, RH, Barnes & Noble. When customers pay upfront, they buy in - literally and psychologically. Forget free points. Paid memberships = commitment, retention, higher LTV and emotional sunk cost. 2. Make Loyalty Required, Not Optional - Integrate Directly into Payments Starbucks preloads!!! When rewards are embedded in how people pay, behavior shifts faster, and for longer. This is probably the biggest opportunity in loyalty right now. 3. Forget Delayed Points - Instant Gratification is More Important Immediate dopamine beats theoretical future savings. Slow accumulation = slow engagement. Instant offers = repeat behavior. The 2nd purchase matters more than the 10th. 4. Make Loyalty Emotional, Not Transactional REI, North Face, Sephora. Customers want to belong, not just save. Identity, community, and shared values are outperforming cashbacks and discounts in driving long-term loyalty. Loyalty isn’t just a discount strategy, it’s a brand strategy. 5. Invest in Status + Experiences, not Generic Perks This isn't just theory – with companies like Rapha and Lululemon offering loyalty members exclusive product drops, community events and behind-the-scenes experiences. Lean into waitlists and exclusive product drops. Less financial. More status + psychological “being in the club.” 6. Reward Engagement, Not Just Transactions MoxieLash, Pacifica, Lucy & Yak. UGC. Reviews. Referrals. Loyalty now means participation. The modern flywheel starts before checkout - and lasts far beyond it. ~~ Bottom line? If your loyalty program is still playing a game from 15 years ago, your customers are going to find better options. Today, the best brands in 2025 aren’t just rewarding loyalty- they're engineering it. PS: We analyzed 100+ programs across QSR, retail, travel, and fintech. Next week I’ll share the Top 30 loyalty programs leading the way. Stay tuned🙏

The power of SaaS referral programs is *still* underestimated. In the B2B space, a massive 86% of buyers cite word-of-mouth as the most influential factor in their purchase decisions. SaaS tools are inherently social. Professional peers frequently discuss and share their favorite tools within their communities. By incentivizing these conversations, companies create a mutually beneficial scenario. Customers receive valuable incentives and trusted recommendations. Companies generate organic growth cycles and harness positive network effects. This approach leads to viral growth loops – a compounding referral motion that leverages existing users to expand the user base. These loops can significantly lower customer acquisition costs and increase user loyalty. As the user base grows, so does the value of the SaaS tool. This creates positive network effects, often resulting in increased retention and improved user trust. But how do the best SaaS referral programs incentivize users? It's not about discounts. Creative incentives both drive referrals and showcase the product's value. Some companies offer service upgrades. Trello, for example, rewards referrers with one month of their "Premium" service for each signup, up to 12 months. Dropbox pioneered the dual-sided incentive model, rewarding both the referrer and the new user with additional storage space. Other companies provide access to premium features. Evernote uses a points system where users can unlock premium features through referrals. Value-based offers are another effective approach. GetResponse combines financial rewards with educational incentives, offering both a cash reward and a digital marketing certification. Credits can also be a powerful motivator. Airtable provides account credits for referrals, while DigitalOcean offers substantial credits for new users to explore their services. The key is to align the incentive with your product's value proposition and your users' goals. A well-designed SaaS referral program can transform your existing user base into a powerful growth engine. It's not just about acquiring new users – it's about creating a community of advocates who believe in and actively promote your product.

When set properly, referral incentives can make or break your conversion rates. Integrating effective incentives could be the key to unlocking unprecedented growth for your PLG SaaS. However, not all incentives are created equal. In the art of motivation, they can be categorized into three distinct types, each with its unique impact: 1. Extrinsic Incentives. These are tangible rewards that can be redeemed outside and inside the product experience. ⏰ Time Saved: Clockwise reminds you how much time you’ve saved with fewer meetings. 💰 Monetary Gains: Wise gives you $75 when you refer a business. 💳 In-product discounts: Dropbox gives you free storage when you refer them new users. 🎟️ Points & earnings: Plecto lets sales teams earn coins to redeem for using the product. 🔐 Exclusive features: Monzo Bank lets you skip the line to new features when referring others. 2. Intrinsic Incentives Think of incentives that reward your inner motivations. 📖 Niche Knowledge: Reforge courses give you access to niche, specialized knowledge. 🎯 Completing a Task: Linear makes completing a task a delightful experience. 🎓 Learn a new skill: Semrush Academy teaches you new SEO skills to then put into practice by using their products. 🌱 Contribute to a cause: When buying Apple (Red) products, a portion of revenue funds AIDS research. 3. Social Incentives Incentives that come from social interaction with colleagues, friends, and family, or the broader public. 👏 Public Recognition: LinkedIn awards consistent creators with ‘Top LinkedIn voice’ badges. 🥹 Personal Confirmation: June.so congratulates the team when you reach new all-time highs. 🥇 Outperforming others: Remote nominates their customers as “Top Remote Companies of the Year” Understanding how to leverage these incentives can dramatically improve user engagement and loyalty to your product or service. Found this helpful? Feel free to save it or tag a colleague. 💜 #incentives #motivation #SaaS #PLG #rewards