🟣 Building Beyond Transactions with Effective Loyalty

On the Pod 🎧

Lastest episodes:

• S9:E51: Ex-PepsiCo Strategist Unveils Brand Positioning Frameworks that Transform DTC Brands → Kathy Guzman
  

• Cutout 8: Building a Barbecue Brand that Keeps Customers Coming Back → Kosmo Khosravi

• Cutout 7: Why Community-Driven Brands Are Disrupting Traditional Markets → Oren Schauble

• Cutout 6: How to Build a Polarizing Brand that Drives $40M in Revenue → Alex Neist

• Cutout 5: How Strong Branding and UX Can Weather Economic Storms → Nirav Sheth

COMMERCE TIPS

9 Types of Loyalty Programs:
Which Is Right for You?

Last week, I wrote about the foundational steps of setting up a loyalty program, from evaluating your business’s readiness to designing meaningful rewards and integrating the right technology. Now that you have a solid understanding of the basics, it’s time to dive deeper into the specific types of loyalty programs available and how they can drive customer engagement and retention.

So, this week, I’ll be explaining various loyalty program strategies tailored to different business goals and customer behaviors. Whether you’re looking to boost repeat purchases, drive referrals, or increase average order value (AOV), there’s a strategy that fits your needs. Plus, I’ve prepared a summary table that you can download for quick reference. Let’s dive in.

1. Points-Based Programs

Strategy: Simple and effective—customers earn points with every purchase, redeemable for discounts or rewards. It’s great for driving repeat purchases.

• Primary Objective: Boost purchase frequency.

• Implementation Difficulty: Medium

• Top Shopify Apps: LoyaltyLion, Smile.io

2. Tiered Loyalty Programs

Strategy: My personal favorite, customers move up tiers as they spend more, unlocking better rewards. Ideal for encouraging long-term loyalty and driving higher average order values (AOV).

• Primary Objective: Reward high-value customers and increase AOV.

• Implementation Difficulty: Medium

• Top Shopify Apps: Smile.io, LoyaltyLion

3. Referral Programs

Strategy: Leverage word-of-mouth by rewarding customers for referring friends. It’s a cost-effective way to acquire new customers.

• Primary Objective: Increase customer acquisition.

• Implementation Difficulty: Low

• Top Shopify Apps: ReferralCandy, Yotpo

4. VIP Programs

Strategy: Offer exclusive perks to your top customers, often for a membership fee or spending threshold. Perfect for creating a sense of exclusivity.

• Primary Objective: Enhance customer loyalty among top spenders.

• Implementation Difficulty: Medium

• Top Shopify Apps: Bold Memberships, LoyaltyLion

5. Subscription-Based Programs

Strategy: Customers subscribe for regular deliveries of your products, often with a discount. Ensures consistent revenue and convenience for them.

• Primary Objective: Build consistent, recurring revenue.

• Implementation Difficulty: High

• Top Shopify Apps: Recharge Subscriptions, Bold Subscriptions

6. Cashback Programs

Strategy: Reward customers with a percentage of their purchase as store credit or direct cashback. Encourages higher spending and repeat visits.

• Primary Objective: Increase average order value (AOV).

• Implementation Difficulty: Medium

• Top Shopify Apps: Rise.ai, Smile.io

7. Behavior-Based Programs

Strategy: Reward customers for actions like leaving reviews or engaging on social media. Helps build a strong community around your brand.

• Primary Objective: Deepen customer engagement.

• Implementation Difficulty: Medium

• Top Shopify Apps: Yotpo, Stamped.io

8. Punch Card Programs

Strategy: Digital punch cards reward customers after a set number of purchases. Simple, effective, and great for repeat business.

• Primary Objective: Encourage repeat purchases.

• Implementation Difficulty: Low

• Top Shopify Apps: Stamped.io, Smile.io

9. Social Media Engagement Programs

Strategy: Reward customers for interacting with your brand on social media—sharing posts, tagging friends, or using specific hashtags. Increases brand visibility.

• Primary Objective: Boost brand awareness and build a loyal community.

• Implementation Difficulty: Medium

• Top Shopify Apps: Growave, Yotpo

$100M+ BRAND STORIES

How HUM Nutrition Grew Into a Personalized Wellness Powerhouse 🌱

You’ve probably seen HUM Nutrition’s ads on Instagram or heard influencers talking about their supplements. But did you know that this $50M+ powerhouse was co-founded by Walter Faulstroh and Chris Coleridge in 2012 to make personalized nutrition accessible to everyone? Their success has skyrocketed, largely due to a Direct-to-Consumer (DTC) approach that blends personalized service with smart, strategic content marketing.

How They Grew So Fast:

1. Influencer-Driven Social Media and YouTube Strategy

HUM Nutrition’s growth is powered by a sharp focus on influencer marketing across Instagram and YouTube. Rather than chasing follower counts, they’ve honed in on creating genuine connections through a community of content creators and high-impact influencers who actively share user-generated content (UGC). “Instagram has been a powerful channel for us, driving a 30% increase in sales each quarter,” says Walter Faulstroh, HUM’s co-founder, in an interview with The Quality Edit.

But their strategy goes beyond the basics. On YouTube, HUM collaborates with influencers who seamlessly weave their products into everyday content, making it a natural part of their daily routines. They embed HUM into content that feels real and relatable in order to build trust. This Director of Influencer Marketing job description they put out, show how obsesed they are with measuring metrics like ROAS and CAC.

What HUM is doing is more than just marketing—they’re creating a dedicated community that supports and sustains their growth in a competitive market.

2. Personalized Customer Experience:

At the heart of their growth is HUM’s personalized quiz, designed to recommend the right products based on individual health needs. Kelly Mendoza, Senior Growth Manager, explains that this approach is key to converting first-time visitors into loyal customers. This quiz is more than just a tool—it’s a crucial part of how they’ve built long-term relationships with their customers as highlighted in this interview.

3. Content and Education:

Education is central to HUM’s content strategy, building trust and positioning the brand as an authority in the wellness industry. “Education is key to building trust and long-term loyalty with our customers,” Faulstroh mentioned in the same interview with The Quality Edit. This commitment to educating their audience has helped drive repeat purchases and strengthen customer loyalty.

4. Selective Retail Expansion:

While HUM’s growth has primarily been DTC, they’ve strategically expanded into retail with high-end stores like Sephora. This selective approach complements their online presence, reaching customers who prefer shopping in stores while still maintaining strong online sales.

Takeaway:

HUM Nutrition’s rapid rise is no accident. Their blend of influencer-driven social media, personalized customer experiences, educational content, and strategic retail expansion has positioned them as leaders in the wellness space. If you’re looking to replicate their success, these are the strategies to focus on—build a strong online community, personalize the customer journey, and never underestimate the power of education.

Commerce headlines

• Temu is recruiting U.S. and European brands to diversify its marketplace, which has mainly featured Chinese sellers. Despite offering lower fees and prioritizing new sellers, Temu faces challenges as many brands may avoid associating with the platform due to potential reputational risks.
  

• Portless, a supply chain company that fulfills e-commerce orders directly from China to customers' front doors worldwide, has partnered with ZigZag, a returns solutions provider, to streamline international returns. ZigZag’s solution enables retailers to manage returns locally within destination countries, bypassing the need to ship items back to their origin. This method facilitates in-country disposition, resale, donation, or consolidation. The collaboration aims to reduce delivery times from China and Vietnam to just six days, enhancing cash flow, boosting inventory agility, and minimizing environmental impact while delivering a better returns experience for customers

• Klarna, the Swedish buy now, pay later firm, plans to cut its workforce by nearly half, utilizing AI to boost efficiency and reduce costs. CEO Sebastian Siemiatkowski emphasized AI’s role in narrowing the company’s quarterly loss and improving revenue per employee. Klarna, has already reduced its staff from 5,000 to 3,800, and aims to cut further to around 2,000. The company is also preparing for an IPO with major financial advisers.

HEALTH IS WEALTH

Grounding

This summer, on our annual family camping trip to Dorset, I noticed something remarkable. For those unfamiliar, Dorset is a picturesque county on the southern coast of England, known for its stunning coastline, rolling hills, and quaint villages. It’s a place where nature feels close, almost alive, and this year, I felt it more than ever.

I’ve never really paid much attention to my health data while camping, aside from a curious spike last year when my heart rate variability (HRV) more than doubled—from a 50ms average to 116ms. At the time, I thought it was a glitch and ignored it. But this year was different. I was determined to understand what happens when you spend extended periods in nature.

Night #1: A Surprising Shift

The first morning, I woke up around 8 AM feeling incredibly refreshed—nine hours in bed, seven hours of solid sleep. Oddly enough, my air mattress had deflated, leaving me almost directly on the ground. Yet, I felt energized, almost as if I was plugged into the Earth itself.

When I checked my Whoop data, my resting heart rate (RHR) had dropped to 49, and my heart rate variability (HRV) had jumped from an average of 49 to 66. This wasn’t just a blip.

Night #2: Consistency in the Data

After another night, the pattern continued—nine hours in bed, seven hours of sleep, and my RHR dropped even further to 47, my lowest ever. Clearly, something was happening, and I needed to understand what.

Discovering the Power of Grounding

It turns out that this experience wasn’t just a fluke. I started looking into the concept of Earthing or Grounding, where direct contact with the Earth’s surface can calm the autonomic nervous system (ANS). This shift from a stressed state to a more relaxed one could explain the changes in my RHR and HRV.

Research backs this up. A study published in Integrative Medicine: A Clinician’s Journal found that even 40 minutes of grounding can balance sympathetic and parasympathetic functions, improving stress response and overall heart health.

Why It Matters

In our stress-filled lives, simple practices like grounding can have powerful effects. Whether it’s walking barefoot in the grass, spending time at the beach, camping in your garden, or just lying on the ground, reconnecting with nature can significantly benefit your well-being.

So next time you’re in nature, take off your shoes and connect with the Earth. It might just be the natural reset your body needs.

MINDSET OF WINNERS

Ask for Help: It Takes a Village

Lately, I’ve been watching less TV. I don’t have Netflix or Disney+, and I rarely turn on the news. While I have subscriptions to Apple TV and Amazon Prime Video, I don’t actually watch them. The only TV show I’m following right now is Celebrity Race Across The World 2024 on BBC. This season’s South American leg has been fascinating.

For some context, the show pairs celebrities with non-celebrity partners and challenges them to race across a continent with limited funds and resources. They must navigate local transportation and overcome various obstacles along the way.

In a recent episode, the leading team, Kelly Brook and her husband Jeremy, faced a major setback when they couldn’t board an earlier bus due to a lack of local currency, forcing them to wait over seven hours. Meanwhile, the trailing team, BBC Radio 2 presenter Scott Mills and his husband Sam, encountered a similar issue but found a group of Mormon evangelists who accepted USD. By asking for help and exchanging their money, they managed to catch up and surpass the leaders.

My Takeaway:

We often get stuck, thinking we can solve problems on our own or in our own time. However, we might overlook the fact that help is often available around us and can come at little cost to others. It’s important to recognize that asking for help can be the key to overcoming obstacles and moving forward. Reaching out can turn challenges into opportunities and make a significant difference in achieving our goals. I’ve been putting this into practice recently and finding it makes a real difference. Remember, it takes a village, so don’t hesitate to ask for help.