How To Build A Great Loyalty Program For Your Luxury Brand
- Sep 28, 2022
- 4 min read
Updated: Sep 29, 2022
Written by: Marion van der Krogt, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Retain & grow your very important clients with a VIC program that is exclusive, effective, and efficient. Luxury brands have always focused on building excellent relationships with their top-tier clients since customer engagement is key to any business that intends to be around long-term. A loyal top-tier clientele might even tie a brand across times of crisis. For example, Dolce&Gabbana’s couture division was thriving even during COVID-19, thanks to their clienteling efforts to retain their pre-pandemic top spending customers.
While most global luxury brands do run VIC (very important clients) loyalty programs already, those programs are often shrouded in secrecy to those without insider knowledge or who are not VIP clients of the brand themselves. As a former VIP marketing manager for Gucci and founder of luxury clienteling & CRM consultancy Alox Consulting, I can lift the veil on what makes a great VIP customer program for your luxury brand, whether you are an independent designer brand, bespoke product business, or a big box luxury retailer.
The 3 Must Haves Ingredients for your luxury brand’s VIC Program
To run a successful VIC program, your initiative needs to be built around the following three key ingredients: Exclusivity, effectiveness, and efficiency. Your VIC program needs to be exclusive enough to wow even the most pampered high-net-worth individuals. Your VIC program also needs to be effective; it needs to contribute to the achievement of your customer development goals. Finally, your VIC program needs to be efficient. Your systems and processes need to be well documented, optimized, and supported by technology.
Let’s dive into each of the three areas in more detail:
1. Exclusivity
Membership Level: Not everyone is a VIC and that’s ok. Don’t be afraid to be very exclusive. You are running a luxury brand and your VIC program needs to reflect that. It should be designed purely around your top-tier clientele, most likely your top 5% or 10% purchasers. Exceptions are at your discretion and might be made for a client who might not be a top spender but shows a great future potential or has repeatedly referred other top spenders to your brand. AI will be able to help with the prediction of future behavior through segmentation (https://www.brainzmagazine.com/post/data-enabled-leadership-staying-ahead-of-change).
Singular Focus: I always recommend clients start at the top and work their way ‘down’ when creating a loyalty program. Always ensure your top-tier loyalty program runs smoothly before you launch a second-tier loyalty program so as not to dilute your attention on your most valuable clientele.
Initiatives + Benefits: your program’s initiatives need to be designed around the purchase behaviors of your top clientele. Since sales discounts do not drive your VICs your initiatives need to focus on providing exclusive experiences such as VIP backstage events, money-can’t-buy activities, and luxury gifts (e.g. exclusive products that are specifically designed and manufactured for your VICs).
2. Effectiveness
Clear Program Outline: Ensure your VIC loyalty program is clearly defined and processes are standardized and documented.
Measure the Impact: Your VIC Program needs to contribute to your customer growth goals. Ensure you measure and evaluate the program’s impact regularly. Loyalty Management Platform Antavo’s Global Customer Loyalty Report 2022 shows that only 67% of brands who run loyalty programs measure the ROI of it. Of those who measure impact, 93% report a positive ROI. Whilst measuring ROI itself is not a guarantee for success, by conducting regular program performance evaluations with all main contributors and stakeholders of the program and tracking your KPIs (key performance indicators) you can make ongoing course corrections if necessary ‒ which increases the probability of a positive outcome.
Communication and training: New team members that will contribute to the VIC Program are formally introduced and trained on the program's process and systems. This includes both customer-facing team members (e.g. sales associates and stylists) and back-office staff (e.g. marketing & CRM at head office and customer support staff)
3. Efficiency
‘Process first’: Automation and support through IT systems are a must-have for any luxury loyalty program. But this doesn’t mean you need to go ‘technology first’, although technology vendors will tell you exactly that. Your approach to efficiency through IT needs to be ‘process first’. Technology needs to support your processes and procedures, not the other way around. You’ll need to select or customize technology so that it fits your desired process. Only then can you achieve both effectiveness of your program and implementation efficiency.
Automation: Set your VIC program up to be scalable with automation as the size of your top-tier clientele grows. An ideal way to achieve this is by selecting technology that allows you to automate a vast majority of your processes and frees your time up to connect with your top clients one-on-one.
Cross-channel: Your VIC program must work across your brand’s purchase channels, both online and in person. You need to ensure that all information on both the program and the VIC is tracked and accessible across all channels. This ensures you don’t lose sight of the client’s overall relationship with your brand across various touchpoints.
As a luxury brand owner, you are in the business of providing massive value to your clients. Your VIP clients come to you for a luxury experience they can’t receive anywhere else. To build excellent and long-lasting relationships with your top-tier clientele, you must implement a VIC loyalty program across the trifecta of Exclusivity, Effectiveness, and Efficiency.
Are you curious how your current VIC efforts measure up across the 3 must-have areas of Exclusivity, Effectiveness, and Efficiency?
Access your complimentary VIC program evaluation here and receive a free report with tailored recommendations to take your luxury brand’s VIC program to the next level.
Marion van der Krogt, Executive Contributor Brainz Magazine
Marion van der Krogt is a luxury clienteling and CRM strategist. She helps high-end brands supercharge their top tier clientele by designing and implementing VIC (very-important-client) programs that create repeat business, deepen customer loyalty and stimulate high-end referrals. She is CEO of Alox Consulting, the premier luxury clienteling and CRM consultancy with clients across 3 continents. Marion’s mission is to bring innovative VIP client programs and strategic clienteling initiatives to independent luxury and bespoke brands around the world.
