Inveterate’s foundational loyalty programs yield tangible results in record time

We live in an instant-gratification economy. Anything a person could ever want is right at their fingertips. So even if someone’s been buying from a brand for years, they probably aren’t checking their account to see how many loyalty points they’ve earned — let alone calculating what they’re worth.

Our verdict: Points-based loyalty rewards don’t work.

Yet, brands still need loyalty programs, not only to celebrate the culture around their products but to ensure when customers choose to spend in their category, they choose your brand over a competitor’s.

That’s where Inveterate comes in. Our bespoke loyalty programs promote LTV and boost purchase rates in a novel way. We immediately reward customers for purchases with meaningful benefits in a currency they recognize — cash.  When members value the benefits they receive, they spend more and become more loyal to your brand.

Why points-based loyalty programs no longer work

Studies show that points-based incentives don’t change customer behavior. One reason for this? We call it the delight doldrums — a vicious cycle where customers have to be constantly re-engaged and pushed back into the delight phase because points don’t keep them there. This makes it easy for competitors to poach your customers.

As experts in loyalty, retail, and ecommerce, we’ve seen firsthand how points-based systems fail to build loyalty, let alone produce sustainable revenue. The issue is threefold:

1. Points have no obvious value. People intuitively understand how much cash is worth, but points are more abstract. Even if their dashboard shows them how many points they’ve accumulated, seeing that number won’t reflect the program’s actual value.
2. Many points systems are antiquated and complex. Points are meant to encourage redemption, which, in turn, promotes long-term customer participation and retention. But if the points system is complicated or lacks value, customers simply won’t use it. That’s because these loyalty solutions don’t align with how people interact with technology today. We’re used to instant gratification and information access, not complex point conversions.
3. Points don’t increase retention or LTV. When customers don’t redeem points, your brand misses out on the additional revenue it would gain from the money they’d spend above and beyond the reward amount. Even worse, all of that money will likely go to your competitors because points aren’t compelling customers to stay with you.

Truly pleasing customers is difficult but necessary to create customer loyalty. So, how do you please customers without using points?

A loyalty program from Inveterate. We build customer retention through relevant shopper experiences — with strategies that actually work, like cashback and pull-based rewards.

Unique loyalty journeys reward customers for their buying habits

No two shoppers are alike, so we don’t offer a one-size-fits-all solution. Instead, Inveterate’s Loyalty Journeys include unique, enhanced benefits for every shopper cohort. We also offer the flexibility of free or paid membership tiers — all in the same platform.

• Free loyalty: A free program helps you connect with new customers and collect their contact information, motivating that elusive second purchase with a simple cashback offer.
• Paid memberships: More committed (aka paying) customers receive juicier benefits, from quarterly gifts and richer cashback to quarterly credits. Shoppers who have already demonstrated love for your company will return for more.
• MVP loyalty: A more exclusive tier for top spenders should include special gifts and perks with purchases. The customers in your top tier are already buying far more than average, so perks may not increase their spending. Instead, exclusive gifts will make these high-LTV customers feel special and appreciated, and less likely to jump to a competitor. You don’t want to lose the customers most avidly displaying the purchase behavior you’re trying to build in others.

These different programs create natural customer cohort separation. For instance, a free program might aim to connect with new customers to simply motivate a second purchase while the margin invested in juicier benefits is saved for more committed customers.

Cashback is the wind in loyalty’s sails

Rather than trying to make a suboptimal points-based system work, Inveterate deals in a far better currency: cashback. Because the connection between making a purchase and receiving rewards couldn’t be clearer, cashback actually gets redeemed. In fact, 70% of cashback rewards are redeemed, compared to only 14% of points. When customers see that tangible benefit stemming from their purchase, they buy more.

For example, Bambu Earth replaced their points-based legacy system, which didn’t convert well, with cashback. Now that customers are very clear on the value they’re receiving from Bambu, they’ve increased incremental gross revenue by nearly $740,000 over the past nine months.

Pull-based rewards incentivize purchases

Many rewards programs celebrate routine behaviors, but that doesn’t promote the behavior change that creates valuable customers. Inveterate uses pull-based strategies to motivate customers to change their behavior and shop more — not for posting about a brand on their social media or creating an account. The LTV correlation is simple: provide valuable benefits that motivate increased purchasing and reward the thing that actually increases LTV.

For example, rewarding a new member with a $15 credit is an effective strategy that pulls them back in for a quick second purchase. This is a massive improvement on the customer waiting to accrue enough points to make additional purchases — if they ever redeem the points at all.

Why Inveterate is the solution to the future of loyalty

Inveterate is a loyalty solution unlike anything you’ve seen before. We’ve crafted programs for hundreds of brands — so we know what works.

The expertise we’ve gained from launching foundational programs for hundreds of brands ensures your program, merchandising, and marketing all align with your brand’s unique goals.

For example, a subscription model often seems like an enticing perk, and in some cases, that’s true. It’s a clever strategy if you’re trying to drive repeat business. But in many cases, there’s an even better option to achieve sustained growth. This was the case for skincare and beauty brand Bambu Earth. By offering paid memberships instead of subscriptions, not only did they get a commitment from their customers, but they increased order frequency by 163%.

To start building your bespoke Inveterate loyalty program, you’ll want to consider three aspects of your business:

Financials

Think margins, variable costs, existing repeat purchase rate, and more. For example, if your repeat purchase rate is low, implementing a Repeat Purchase model program would improve it by encouraging customers to try more products. For instance, Bambu Earth and Outdoor Vitals ensure brand loyalty by offering monthly programs that give customers credits for their monthly membership fee. The credits are equal to the monthly fee and go into a sort of savings account to purchase with the store, ensuring customers come back again and again when buying from those categories.

Business goals

Are you trying to boost customer LTV or increase repeat purchase rate, etc? For a brand trying to drive repeat purchases, we may suggest a repeat purchase model. Have you noticed that lots of Customers sign up for subscriptions, but there’s a huge dropoff after the first purchase? That’s generally customers signing up for subscription just to get a discount, so a subscription alternative program could be perfect for your brand! Do you want to offer exclusive items to your most loyal Customers? Create a program that follows an exclusivity model and creates FOMO for everyone who is not yet a member — leverage member-only collections that everyone will covet!

Customer preferences

Consider offering both paid and free memberships to fit multiple segments within your target market. The free program ensures that any prospective customer is included; the paid one rewards loyal customers and brings them further into the fold. For instance, a beauty brand may send product samples to all members but only offer exclusive discounts and premium perks to paid members.

Inveterate’s core loyalty models boost LTV and set your brand apart

With this information established, the program you need should fit into one of our five foundational program models. But you can also combine and expand on any of these to suit your goals. Let’s look at each one:

Repeat Purchase Model

In a busy DTC ecosystem, a first purchase doesn’t guarantee a customer will return for the second one. That’s why our program utilizes pull-based rewards, which make it a no-brainer for customers to pick your brand over your competitors. These rewards also incentivize behavior that contributes to increased LTV and ROI — they’re not just rewarding actions but transactions.

This type of reward includes cashback for membership sign-ups and their first order, plus recurring cashback in exchange for their membership fee. The program ensures that customers have already bought into your company so they’ll want to return.

Even ecommerce successes like True Classic need to compete in the crowded clothing vertical, so the brand set itself apart with Inveterate’s repeat purchase model. Strategies include in-cart reminders, which show customers how much they’d save if they signed up for the membership. And members then receive conversion-driving perks like early access to new products, exclusive offers, members-only gifts, and SMS notifications reminding them what rewards they’ve earned. The FOMO effect further drives signups and member participation.

The results? A 44% increase in revenue per customer across 45,000 members, plus a $2.3 million increase in incremental revenue in 8 months.

Subscription Alternative

Subscription services often have unwanted side effects like product build-up. When subscriptions are sent on the wrong cadence, customers grow resentful of the unwanted orders and may churn. Instead, a subscription alternative program can offer similar perks without the burden of receiving product on a set cadence. Customers only receive product when they need it, but you still get a commitment to buy your brand.

For example, Wandering Bear Coffee’s customers loved their coffee, but those who opted into the subscription model often ended up with more coffee than they could drink. Pausing the subscription often resulted in customer churn. But with Inveterate’s subscription alternative membership program, customers can ship coffee on-demand at a discounted member price. Among other results, Wandering Bear’s revamped loyalty program increased member net sales per month by 48%, even with a discount applied to each order.

Exclusivity

A program that focuses on exclusivity will generate a sense of urgency around purchasing from your brand. Members-only perks and a strong sense of community encourage long-term loyalty. Often, premium incentives include early access to inventory, exclusive members-only items, priority customer support, and special gifts.

When Flamingo Estate approached this membership model, they strategized on how to shift their casual customers into their most loyal customer group. To do so, they offered truly exclusive benefits such as seasonal gifts with purchase, early access to new drops, member-only products, priority concierge support, and special pricing on gift sets. These offerings have prompted members to shop 182% more frequently than non-members, with an average spend of nearly three times that of non-members.

High-Consumption

If your product is something that customers will need to repurchase for the long term, a high-consumption program may help reinforce high-volume purchasing behaviors with special benefits. This strategy often ensures frequent purchases from that customer over many years, becoming a major unlock for recurring revenue. This program could include perks like free shipping, members-only pricing on the items they’re after, or dynamic members-only discounts.

Just take a look at Carnivore Snax. Inveterate cooked up a new and exciting high-consumption membership program for them. It gives members perks like exclusive access to rarer and more popular meats while the fee they pay ensures Carnivore Snax’s longevity as a company, enabling them to offer competitive prices for their premium product. The program has lifted their AOV by 49% and increased spend per customer by 319%.

DTC Shift

If a broadly distributed brand wants to increase website purchases they should use a DTC shift program. This smartly leverages the awareness and new customer acquisition that wholesale generates while enabling the business through your highest margin channel and preventing customers from jumping to other brands in your category.

For example, Fly By Jing wanted to become a truly omnichannel brand. But if people started buying its products at Whole Foods or Target, it risked losing its personal connection with customers — and compromising its most profitable channel, its website.

So it looked for a way to take advantage of DTC’s higher margins and retain those valuable relationships by adding value for customers and encouraging them to purchase directly. Using Inveterate’s DTC Shift model, the brand increased gross revenue by $55 per member and boosted DTC order frequency by 53%.

Doing so increased website purchases and incentivized customers to shop with them rather than other brands in their category. It also provided the opportunity for fans to explore new product lines as they were released.

Overhaul your loyalty program with Inveterate for massive ROI

Creating a bespoke loyalty program with Inveterate improves metrics like attach rate and purchase frequency. We recommend starting with one of the five foundational programs explained above — based on your core business goals. From there, we can sharpen the program by dragging and dropping perks and features from other programs to create a custom program your customers are sure to love.

When True Classic partnered with us, they were hoping to combat high CAC by increasing LTV. So, we helped them develop a program to encourage repeat purchases and stand out in a competitive industry.

We implemented strategies like in-cart reminders that inform customers how much they’re saving on the purchase with their membership. Conversion-driving perks like early member access to new products, exclusive offers, members-only gifts, and SMS notifications remind them what rewards they’ve earned.

The result? True Classic’s loyalty members shop more often and spend more than non-members.

• 44% increase in revenue per customer across 45k members
• $2.3M increase in incremental revenue in 8 months
• 25% increase in order frequency for members
• 6% membership attach rate

Sound like what your brand needs? Book a demo today!