Friends & Family Discounts: Just Another Name for a Loyalty Program?

Posted by Natalie Roemer 

Have you ever had the fleeting temptation to apply for a job at one of your favorite retail stores, sacrificing your corporate salary for something closer to minimum wage just so you could benefit from the employee discount?  In reality, the fifteen percent ($35.00) you would save on those two-hundred and fifty dollar, undeniably irresistible shoes would be recuperated in roughly one hour of work at your current place of employment, yet the draw of being inside that family circle is enough to trump any logic proven by basic math in planning your next career move!

The power of the desire to be in the insiders’ club capitalizes on a common human phobia: the Fear of Missing Out (FOMO).  If there’s a discount to be had, and somebody standing next to me is entitled and I’m not, I WANT IN THAT CIRCLE!

Most marketers would do anything to get customers plotting, prying and fighting to get an opportunity to lay down their dollars or pledge their loyalty to capitalize on some exclusive benefit.  So, how can you leverage the FOMO associated with a true Friends & Family program, yet offer it broadly enough to maximize potential buyers screaming to get in the circle? If you offer it to everyone, isn’t it just like any other sign-up-for-free loyalty program? Not to discount the benefits of free-for-all loyalty programs; you can refresh on all the benefits in one of our recent blogs; but if you want to create exclusivity and understand the benefits of a smaller circle loyalty program, read on!

Blood is thicker than water: Creating at least perceived exclusivity

I looked at a few retail clients who offer Friends and Family loyalty programs with any criteria other than, or in addition to, free sign up.  Here are a few examples I found, and how they leveraged email to promote engagement with their brands: charges their Club O Rewards members a small nominal fee for free shipping on all orders, 5 to 40 percent in Club O Rewards on purchases, and access to exclusive deals. In the true spirit of the love and gratitude that goes along family and friendship, Overstock offers these exclusive benefits at no cost to military, students and first-responders.


Sephora offers free initial entry into the Beauty Insider program, with potential upgrades to VIB and VIB Rouge status based on dollars spent.


Although entry to both programs is available to all, the additional criteria needed to join, whether purchased or by vocation, lend the exclusivity necessary to reinforce purchases and brand interaction typical of friend and family relationships.

Growing the love: furthering interaction with your brand through email

Once you’ve built a coveted family relationship with your subscribers, consider boosting your email program engagement through:

  • Email announcements of exclusive sales or sale previews.
  • Offer extra reward points toward higher or prolonged status for clicking on special offers or previews in emails, and for site visits.
  • Further your email engagement by rewarding friend referrals.
  • Encourage redemption of reward points when the balance expiration is imminent.
  • Offer opportunities to promote to higher family status with incremental spend or engagement activity.
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About Natalie Roemer

Natalie Roemer is a Technical Account Director at Return Path. Her brain's passion for analytics, consulting, and communication has found its zen in her current role. In her spare time, she can be found skiing on the snowy beaches of the Rocky Mountains, or creating something artsy at home. Connect with her at

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