4 Reasons Why Food & Beverage Brands Need a Loyalty & Rewards Program to Stay Ahead of the Curve
customer retentionNov 5, 2021

4 Reasons Why Food & Beverage Brands Need a Loyalty & Rewards Program to Stay Ahead of the Curve

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If anyone knows how competitive the food and beverage industry is, it’s you.

Trending hot spots pop up every day. New products hit the shelves in the blink of an eye. And you’re likely competing online with companies from all over the world too.

So you may be feeling frustrated and unsure of how to get ahead of your competition.

One avenue you may not have tried yet is using a loyalty and rewards program. 

These incentivize customers to keep coming back to your brand. Since research shows 65% of a company’s business comes from its existing customers, this may be just the answer you’re looking for [*].

So in today’s guide, we’ll show you why loyalty and rewards programs are so effective in the food and beverage space. Then we’ll conclude with a real-world example so you can see what one of these programs looks like in action.

Let’s start with the basics:

What is a Loyalty and Rewards Program?

A loyalty and rewards program allows your brand to reward customers for staying loyal to your business. 

Once your customers sign up for your program, they’ll start accumulating points for completing specific actions you set out for them.

In your loyalty program, you can give points to customers for:

  • Signing up for an account
  • Downloading your mobile app
  • Making a purchase
  • Trying a new product 
  • Engaging with your brand on social media
  • Submitting a high-quality review
  • Birthdays, anniversaries, special occasions, etc.

These points then unlock special gifts or rewards for your customers. These may include discounts, free shipping, a free sample, or other incentives. 

The goal?

To keep your customers coming back.

Customers enrolled in your program will want to keep racking up points to redeem their rewards. They’ll be invested and won’t want their earned points to go to waste.

That’s why statistics show 52% of American customers will join a loyalty program offered by one of their favorite companies [*].

Gamifying the experience encourages customers to keep purchasing from your brand and have fun along the way. It’s a win-win for your customer experience.

The best part?

These incentives actually pay off more for your brand.

4 Reasons Why Food & Beverage Brands Need a Loyalty & Rewards Program

Food and bev brands will score the following perks when they implement a loyalty program and actively foster it:

1. Increased Customer Engagement

If you want customers to choose your food or beverage brand over your competitors, you need to make it worth their time.

Of course, this starts with having an exceptional product. But your competitors are likely also offering something your customers perceive as high-value.

So why not beat them on the customer engagement front?

A loyalty and rewards program helps you give back to customers when they actively choose your brand over others. They’ll happily continue to engage with your brand every time they earn points or unlock a coveted reward.

This extra bit of motivation may be just the push they need to come back for more. And this should help you inch out further ahead of your competitors.

2. Boost Brand Loyalty and Create More Brand Advocates

Once your customers realize they’ll get rewarded for picking your brand over another, they’ll be more eager to purchase solely from you. 

This quickly increases your repeat purchases, boosts brand loyalty, and ups your customer retention. All these benefits work in your favor, as research shows [*]:

  • 60% of customers will purchase more frequently from their favorite companies.
  • Loyal customers are 50% more likely to try new products.
  • They also spend an average of 67% more than new ones.
  • A 5% increase in customer retention may boost revenue by 25% to 95%.

But here’s the best news: your loyalty and rewards program may soon turn casual customers into devoted brand advocates.

Snagging these cheerleaders is the ultimate goal, as they’ll sing your brand’s praises to everyone in their network. 

They’re more likely to leave glowing reviews of your company online. And they’ll certainly tell all their friends and family to join your program.

In that research just mentioned, happy customers will share their positive experiences with a brand and typically refer 11 people to it.

So having more brand advocates will spread your brand’s reach and help catapult your customer base to new heights.

3. Higher Sales from Your Best Customers

We already mentioned that loyal customers typically spend more and are more willing to try new products.

But you can take things a step further by adding a VIP level to your loyalty program, which will increase sales from your top customers even more.

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VIP tiered loyalty programs are like an exclusive club your customers will be dying to get in. Gaining access to this level requires more spending (i.e., points) from your customers. 

But it will be so worth moving into the next VIP level to earn better perks. These may include exclusive discounts, express shipping, first dibs on new product launches, and exclusive event invites.

VIP levels pump up sales from your top customers (who are already spending more than your average customer) while simultaneously allowing you to reward them for being so awesome. 

In turn, they’ll be encouraged to shop more, increase their average order value, and love your brand even more. 

This exclusivity also helps motivate your not-yet-top customers to get to this level. 

So you’ll be boosting sales in several ways, just from implementing a loyalty program that includes high-level VIP tiers and perks.

4. Reduce Customer Acquisition Costs

Besides boosting revenue, loyalty programs can also help you slash your customer acquisition costs (CAC).

Instead of having to compete in costly pay-per-click (PPC) bidding wars, you can encourage your existing customers to send family and friend referrals your way -- especially if doing so unlocks a special reward.

This is a cheaper alternative to PPC because you’ll only pay a small referral bonus rather than an expensive cost-per-click that’s not guaranteed to convert.

It’s also more effective because your existing customers serve as better testimonials than any paid ads could. In that research mentioned before, 81% of customers trust recommendations from their friends and family.

Plus, since new customers know the referral source, they’ll be less hesitant to make a purchase from your brand, which can help you close sales sooner.

So now that you know how vital a loyalty program may be for your food and beverage business, let’s look at an example of one that’s doing this right:

Harney & Sons: A Food & Beverage Loyalty & Rewards Program in Action

Harney & Sons, a third-generation high-quality tea company, knows how to build a rewarding loyalty program that drives sales and creates happy customers.

You can see from the image below that their loyalty program offers people 50 points just for signing up:

Customers then earn 1 point for every $1 they spend. But Harney & Sons also has a ton of different ways to earn points (you get 50 points on your birthday!):

The brand even gives customers multiple options for redeeming their points, as seen in the images below. This ensures that each customer is incentivized by what matters most to them:

Harney & Sons then offers an exciting and rewarding VIP program for its best customers. The base-level VIP tier gives customers a 1x multiplier on points, while the highest Tea Lover level gives them a 1.5x multiplier plus 1,000 points just for reaching this elite category.

Harney & Sons also knows how to ask for referrals and actually get them. Referring a friend unlocks a $5 off coupon for new customers and 100 points for existing ones, making it totally worth their customer’s time to do so:

This loyalty and referral program checks all the boxes on what to do to really incentivize customers, which means it has a much higher chance of delivering on the perks we discussed in today’s guide.

So if you’re not sure how to map out your food and beverage loyalty program, this Harney & Sons example could be used as fantastic inspiration.

Final Thoughts on Using a Loyalty & Rewards Program for Your Food and Beverage Business

A loyalty and rewards program can help your food and bev brand increase engagement, customer loyalty, brand advocates, and sales -- while slashing your acquisition costs.

But that’s only if it’s done right.

Fortunately, it’s easier than ever to build a loyalty program as good as the Harney & Sons example you saw a moment ago.

Partner with a top-rated loyalty and rewards program like ours, and you can get your program up and running in no time. You can launch a loyalty program that seamlessly matches your branding and website, so your customers will trust the process and feel confident signing up.

You’ll be able to reap all the perks highlighted in today’s guide -- and you’ll probably wonder why you didn’t do this sooner.

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