With product costs rising, your best path to growth is likely with your existing customers. Innovative loyalty programs can boost LTV, offsetting lower margins or higher new customer acquisition costs.
Astound can help you build a foundation for loyalty by unifying your customer dataset across commerce, marketing and service platforms; as well as planning, implementing and optimizing your loyalty programs.
Loyalty Starts with Data, and Data Start with Trust
The greatest investment a brand can make in its loyalty program is to build a unified data layer, across all channels and platforms. Actionable data underpins all loyalty initiatives. As your customers share info, open email/text, browse, search, create preferences, buy, etc. they’re creating valuable data profiles. The ability to harness this data, depending on how customers interact, enables you to build corresponding actions/experiences/programs.
This data sharing depends upon trust, which starts with creating value exchange messaging (e.g. what’s in it for the customer if they share their data?). Well-designed value exchanges include:
- Clear & Compelling Benefit: Customers must perceive that the benefits they receive from participating in programs are worth the effort they put in (e.g. data sharing, engagement, spending). A strong value exchange ensures that rewards are relevant, desirable and easily attainable.
- Enhanced Experience: Beyond just transactional benefits, a well-designed value exchange enhances the customer experience. This can include exclusive access, personalized offers, recognition and a feeling of being valued by the brand.
- Ongoing Value: When customers feel they’re getting good value from a loyalty program over time, their satisfaction increases, making them less likely to switch brands.
Differentiating Your Program
Loyalty programs are everywhere. According to Statista, the average U.S. consumer held 19 loyalty program memberships in 2024, but only actively used 9. It’s imperative that your program is differentiating. In 2025, loyalty programs risk going the way of early mobile apps, where consumers burned out on too many options.
Loyalty program design centers on: treating your existing customers differently from first-time customers. Many brands still miss opportunities with customers who want to be loyal. Start by evaluating which type of program best aligns to your customer and business goals. Include stakeholders in legal and finance to define the fine print and accounting methods.
While most loyalty programs focus on rewards, points, VIP levels/tiers or perks like pre-sale access, program differentiation can include:
- Non-Purchase Related Activities: Brands that link loyalty to their company mission can differentiate their programs by rewarding non-purchase related activities, encouraging customers to feel less like a commodity. Examples include The North Face XPLR Pass, which rewards exploration and community engagement. Members earn points not only for buying products, but also engaging in activities like checking in at locations or events. TOMS rewards its loyalists for donating shoes or supporting mental health initiatives.
- Gamification: Brands are now shifting their loyalty apps to game-style solutions, enabling customers to win things like free shipping or other perks. Reward values can progress as customers take part in various “challenges,” from providing their data, to sharing their experiences on social, writing reviews or meeting spending thresholds.
- Affiliate-Loyalty Program Alignment: Consider aligning your affiliate marketing and loyalty programs. Like loyalty program members, your affiliates are motivated by rewards. To illustrate, brands can recruit micro-influencers (people who love your brand on social) to become affiliates. Brands can then give these affiliates rewards in return for leveraging their influence to sign-up new loyalty program participants.
Beyond Loyalty Programs
Building loyalty isn’t just about programs. Smooth experiences are critical; one bad experience is enough to lose a customer. Aside from programs, initiatives to foster loyalty can include:
- AI Agents: Beyond automating processes for efficiency, AI agents can provide more seamless customer service than humans, boosting loyalty. Powered by the right data (e.g. customer data, enterprise data, data from past customer interactions), AI agents can find the best pathway to resolve customer service requests. Advanced AI agents can also understand motivation and urgency to provide highly personalized experiences and recommendations within intent moments, catering to customer needs.
- Seamless Online/Offline Experiences: Customers may want to shop online, build baskets, try in-store, buy in-store. Wherever your customers are, you must be able to access and action their data to create experiences that make them want to come back.
- Resale Perks: For apparel in particular, rising costs due to tariffs could ignite “pre-loved” marketplaces, spurring your consumers to seek your products secondhand at lower prices. This presents an opportunity for brands to take control of their secondhand channels, creating and marketing their own native resale platforms. Benefits not only include circular sustainability and mitigating tariff costs, but also loyalty. Oftentimes, it’s your most loyal customers selling secondhand; they’ve worn and love your product, and are now ready to free up money/space to rotate it out for something else, perhaps from you. Consider enabling your customers to sign-up and ship pre-loved products back to you to resell, in return for store credit.
Reach out to Astound today for a complimentary consultation, where we can advise you on optimizing your data, systems, loyalty strategies and programs to mitigate the impact of rising product costs.
