The Rewards of Loyalty Programs for Challenger Brands

May 25, 2023 | blog | By Kim Smith

Loyalty programs can be a powerful tool for any brand to build customer loyalty and increase retention. Finding innovative ways to use loyalty programs can play a strong role in building a challenger brand. Sally’s Beauty Supply, Headspace, and Rothy’s are all examples of how challenger brands are revolutionizing loyalty programs.

It’s all about the customer.

Some challenger brands disrupt traditional loyalty programs by offering unique and personalized rewards to their customers—rewards that go beyond providing discounts or points, and offer customers experiences that truly resonate with them.

The Sally Beauty Rewards program offers customers exclusive access to events, personalized product recommendations, and a personalized rewards dashboard. By tracking customers’ purchases, Sally Beauty Supply provides them with relevant product recommendations and rewards based on their preferences.

In addition to personalized rewards, Sally Beauty Supply also offers members early access to sales, free shipping, and birthday gifts. By offering these benefits, Sally Beauty Supply creates a sense of community among its customers that builds brand loyalty, differentiates the brand from its competitors, and establishes itself as a challenger in the beauty industry.

Get them playing.

Gamifying a loyalty program creates a unique and memorable customer experience. Headspace, a popular meditation and mindfulness app, has seen tremendous success with its loyalty program, Headspace Plus.

The company has been able to retain and attract customers by providing exclusive content and features, including gamification elements that make the meditation experience more engaging and interactive.

A couple of examples are the “Streaks” and “Mindful Minutes” features. “Streaks” tracks the user’s daily meditation practice and gives out rewards for consecutive days of meditation. Users are encouraged to keep up their daily practice and continue their streaks by earning rewards such as bonus meditations and badges. “Mindful Minutes” allows users to track their total meditation time and set goals for themselves. Users are motivated to achieve their goals and improve their mindfulness practice by earning rewards and badges.

By providing a more engaging and interactive meditation experience, Headspace has been able to increase customer retention and attract new customers who are looking for a more fun and rewarding meditation practice.

Speak to what your customer cares about.

Challenger brands are often more nimble and able to pivot their business models to include a focus on social responsibility. This can include initiatives like reducing waste, using sustainable materials, or giving back to the community. Some challenger brands have even incorporated social responsibility into their loyalty programs, creating a more holistic approach to brand loyalty.

One such brand is Rothy’s, a sustainable footwear company that uses recycled plastic water bottles to create their shoes. In addition to an eco-friendly mission, Rothy’s has a loyalty program that rewards customers for recycling their old shoes. The program is called Rothy’s Circular, and it allows customers to send their worn-out Rothy’s shoes back to the company where they are either recycled into new shoes or repurposed into other products.

Rothy’s Circular not only incentivizes customers to recycle their shoes, but it also helps to reduce waste and create a more circular economy.

The program has been a huge success for Rothy’s, with over 1 million shoes recycled through the program since its launch in 2019.

Recently, Rothy’s took its commitment to sustainability even further by launching a new ballet flat that can be fully recycled. The flat, called the Can Can, is made from 100% recycled materials and can be fully recycled again and again. This new product is part of Rothy’s larger mission to create a more sustainable fashion industry.

By incorporating social responsibility into its loyalty program and product offerings, Rothy’s has been able to create a more meaningful connection with customers and build a strong community around the brand. This approach to loyalty has helped Rothy’s stand out in a crowded market and attract customers who are looking for more than just a fashionable shoe.

Loyalty programs can be game changers for challenger brands looking to build a strong customer base and increase brand loyalty. By going beyond traditional rewards and offering personalized experiences, gamification, and social responsibility initiatives, brands like Sally’s Beauty Supply, Headspace, and Rothy’s are revolutionizing the loyalty program landscape. As more challenger brands continue to embrace loyalty programs as a powerful marketing tool, it will be interesting to see which will find even more unique and engaging kinds of programs designed to provide their customers with a sense of greater value and win their brand loyalty.

MIKE SULLIVAN is president and CEO at LOOMIS, the country’s leading challenger brand advertising agency and a top Dallas advertising agency for digital, social, mobile and user experience. For more about challenger branding, advertising, and marketing, leadership, culture, and other inspirations that will drive your success, visit our blog BARK! The Voice of the Underdog and catch up on all of our posts.

For more about LOOMIS, or to discuss how we can help your company succeed, CLICK HERE

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Kim Smith

at LOOMIS, the country’s leading challenger brand advertising agency


We challenge underdog brands to think differently. We help them find their voice, and urge them to blaze new trails to make sure they stand out from the pack. Whether you need an agency of record or support on a project, we are here to help you win.