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What Is a VIP Program, How to Create One & How Do They Work?

ByAparna Seshadri

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In a market saturated with innumerable ecommerce brands, standing out and fostering genuine customer relationships is highly challenging. Brands use VIP programs to hook their customers and foster a sense of brand loyalty. These programs cater to both brands and customers in terms of benefits. They are highly effective in fostering customer engagement and participation and provide customers with benefits like discounts, exclusive deals, etc. It also creates a sense of exclusivity for the most valued customers.

This guide will explain what a VIP program is, how it works, how you can create one, and five successful examples that you can use for inspiration.

Table of contents

What is a VIP program?

A VIP program is similar to a customer loyalty initiative where a business provides exclusive perks such as discounts, access to premium goods, content, and other rewards to a specific group of customers. Membership in this program may involve a fee or be contingent on specific metrics, such as purchase history or engagement levels.

How do VIP programs work?

VIP programs vary significantly across businesses, with loyalty programs being common. In these programs, devoted customers progress through VIP tiers based on a points system, often earned through repeat purchases, or you can buy into the program. Points accumulate for various actions, including brand advocacy, social media engagement, hashtag use, and positive reviews.

Upon reaching a new tier, customers may unlock new rewards, including free shipping, discounts, and exclusive early access to upcoming products and services. The following is a list of different experiential rewards ​​that cater to a wide range of customers with a variety needs and interests:

  • Exclusive shopping sessions

  • Special events pass

  • VIP events

  • Members-only clubs

  • Early access

How to create a VIP program?

Running a VIP program requires strategic planning. The following steps outline the process of establishing a VIP program for your business:

1.Define the goals of your program: Before you start to define the other aspects of your VIP program, the first step is to determine the objectives of your program. You need to define what you expect to get out of this program. It can be customer acquisition, customer retention, increased, etc.

2.Decide on the structure of the program: You can decide on the structure of the program, whether it would be a tier-based system, point-based, or revenue-based, among others. It makes it easy to track your customers' progress through the program so that you can bridge the gap between entry-level shoppers and your best customers.

3.Decide on the rewards that you’re giving out: Conduct surveys or analyze customer data to understand customer preferences. Tailor rewards to align with VIP members' values, offering exclusive experiences like personalized services, behind-the-scenes access, or limited-edition products.

4.Implement it and analyze: Once you have decided on the structure, the rewards, and other variables, you can go ahead and implement the VIP program. Utilise customer loyalty softwares like Loyalzoo, Loyalty Gator, among others, as they provide data on unique rewards and exclusive experiences.

5. Promote effectively: Develop a strategic marketing plan to promote your VIP program. Use various channels, including social media, email campaigns, and in-store signage, to reach and engage your audience. With an ESP like Mailmodo, you can create interactive emails at ease with the no-code drag-and-drop editor.

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What can VIP loyalty programs do for your business?

Since the VIP program forms a tier in the loyalty program, it differs in the way it offers as it can significantly impact the business:

1. Elevating Sales Volume and LTV: It helps strategically boost sales volume as you recognize and retain key customers.

2. Shaping Customer Behaviors: It helps shape customer behaviors by crafting rewards that drive targeted purchases and actions, effectively engaging top customers.

3.Uncovering Motivators and Segments: It helps uncover the specific motivators that drive your customers. Identifying the customer segments helps engage most with your brand and discern the rewards that resonate.

4. Enhancing Brand Advocacy: It strategically enhances brand advocacy through positive word-of-mouth, focusing on high-value customers to reduce churn and broaden audience reach.

5 examples of highly successful VIP programs

Here are the 5 examples of highly successful VIP programs that operate within the loyalty program:

1. Sephora beauty insider

Sephora's beauty insider VIP program stands out as a widely popular feature both in-store and online, boasting an impressive 25 million members. This substantial membership base underscores Sephora's commitment to delivering personalized experiences to each customer.

The program features three tiers: Insiders, VIPs, and Rogues, with Rogue members in the top tier significantly contributing to the company's sales and growth.

2. Obus’ Obus Travel Club

Obus exemplifies effective lifestyle marketing by tapping into the adventurous spirit of its customers, notably through travel-inspired clothing. This approach distinguishes Obus amidst the vast competition in the fashion industry.

Obus further captivates its customers' sense of wonder by introducing VIP tier names, guiding them from a Wanderer to a Voyager. This strategic progression encourages customers to aspire to and attain coveted status levels, fostering a deeper connection with the brand.

3. Myntra’s Insider program

Myntra Insider is Myntra's customer loyalty program designed to provide exclusive benefits and privileges to its members. They enjoy a range of perks, including early access to sales, exclusive rewards and benefits, and free shipping on all purchases.

The program is tiered, offering different benefits based on the Insider's engagement and loyalty. Higher tiers are typically for VIPs as it come with more exclusive rewards and privileges.

4. Adidas Creators Club

The Adidas Creators Club is an exceptionally successful VIP program due to its diverse range of rewards and multiple avenues for earning them. Structured into four tiers, the Creators Club offers increasingly enticing rewards as members climb higher in status. At the pinnacle, members enjoy exclusive perks such as invitations to special events, including complimentary concerts, games, and meet-and-greets with athletes.

Advancement through the VIP tiers of the Creators Club is based on a points system, essentially making it a dynamic points program. Members accumulate points through diverse activities, including purchasing Adidas products, tracking workouts on the Adidas Running and Training apps, providing reviews for their purchases, and participating in Adidas Runners events.

5. Designer Shoe Warehouse

DSW, which stands for Designer Shoe Warehouse, operates a conventional VIP loyalty program that grants customers points for every purchase, coupled with tiers of rewards that become accessible as customers increase their spending.

The program features multiple tiers, unlocking more enticing benefits as spending increases. There is no physical loyalty card; instead, the online system identifies members by name, phone number, or payment info. Rewards include free shipping, 5% back on purchases, and special discounts.

Takeaways

Customers who participate in VIP programs receive benefits and perks tailored to their specific needs. As we navigate the path of loyalty reinvention, the significance of creating personalized experiences and fostering genuine connections becomes crystal clear. In this era of choices and competition, standing out requires more than just products or services—it demands a commitment to customer satisfaction and crafting memorable experiences. These programs create a deeper connection between customers and brands by providing exclusive access to premium experiences, early access to upcoming products, personalized experiences, and invite-only events.

What you should do next

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Frequently Asked Questions

VIP loyalty programs often offer exclusive perks, early access to products, and personalized rewards to enhance customer satisfaction and loyalty.

Typically, customers become VIP members by meeting specific criteria, such as making frequent purchases or reaching a certain spending threshold.

VIP status is usually non-transferable and tied to the individual account. It cannot be shared or transferred to another person

If VIP memberships have an expiration date, customers may lose access to exclusive benefits and privileges after the expiration unless they renew or meet the criteria again

What should you do next?

Thanks for reading till the end. Here are 3 ways we can help you grow your business:

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