Customer Loyalty Programs - Ensuring you're recruiting the right crowd and ensuring customers "feel the love"

Recently I saw that THE ICONIC launched a very cute activation in Melbourne; the Front Row Christmas Pop-Up with free coffee, cannoli and gifts. And as someone who has proudly worn the ICONIC lanyard… I love a good brand moment, it really ‘got me looking.’

But the Loyalty/CRM nerd in me couldn’t help raising an eyebrow at a couple of things:

1) Freebies = sign-ups… but then what?

Nothing spikes enrolments like a free coffee or a lovely first purchase discount (ICONIC staff past and present know this better than anyone). But whenever you use freebies to drive sign-ups, you often end up with a beautiful graph and… not much behaviour afterwards (or behaviour that requires further incentives to do what you want them to do.) People grab the cannoli, grab the gift, grab the sign-up and then disappear into the abyss, never to purchase again unless they are given something to encourage them to do so. A strong program should make customers think: “I want to join because this program is valuable… not because cannoli exists.” And yes, anytime you incentivise enrolments you also invite a little bit of fraud. (Not always bad if you know how to spin it; future article coming on creative fraud management, stay tuned.)

2) Tiers are about recognition, not just decoration

Customer Tiers are there to celebrate your best customers and give them a different level of service. Airlines absolutely nailed this playbook years ago; beautiful lounges, upgrades, priority everything. But online brands face a harder challenge; “How do we make VIPs feel VIP when most interactions are digital?” That’s exactly why offline activations are gold. They’re the moment to show your high-value customers, publicly, that their loyalty counts. For a brand-new program like Front Row, imagine the impact of a little VIP magic: priority queue, elevated gifts by tier or just to the top tier if time was an issue. It would’ve reinforced the meaning of the tier and given loyal customers that subtle status glow. (Let’s be honest, people love to feel a bit special.)

And this isn’t a dig at The ICONIC, far from it. It just popped up on my Insta this morning and triggered my inner loyalty gremlin (now that I have lots of spare time.) Plenty of retailers miss opportunities to showcase status publicly, to show customers the true meaning of being a valued customer (above others) and shift value perception away from discounts. In a market desperate to escape the “up to 40% off everything forever” trap, loyalty tiers and value-added experiences and gifts are the strongest levers brands have left.

Reward behaviour. Celebrate loyalty. Reduce discount dependency. And maybe… bring back more cannoli (and a good gluten free option)