REI Co-op Membership Case Study

June 07, 2022

Whether you are an outdoor enthusiast getting ready for your occasional winter hike, or a first-timer seeking an adventure for a couple of days, it is possible to find whatever gear you’re looking for at Recreational Equipment Inc., more popularly known as REI. Their loyalty program, REI Co-op membership, is one of the most notable in the outdoor industry primarily for its modest $20 fee and incredible perks.

This post will walk you through the ins and outs of the REI Co-op membership program, why it is viewed as an excellent rewards program, and some of the areas the brand could work on to make it more attractive to new and existing customers.

How does the program work?

Customers who intend to become a Co-op members sign up by paying a $20 one-time fee to become lifetime participants.

For customers who join between January and July 2021, the program offers a $20 Member Bonus Card to its newest members. They have the opportunity to earn a $20 reward if they make a purchase of at least $50 at REI and add the $ 20-lifetime membership to the cart as they shop. This promotion essentially offers new members access to the program for free if they adhere to its terms.

There are a variety of perks one can earn as an REI Co-op member.

Used Gear Trade-In

Members can trade in their gently used outdoor gear for REI gift cards.

Bike & Ski shop services

This perk is highly advantageous for biking and skiing lovers who live close to an REI store. Most of their in-house stores have Ski and bike shops stacked with all the equipment needed for an adventure. In addition, members enjoy 10% off the purchases they make at any of these shops.

Rentals

Another benefit of joining the program is that members can rent camping gear and equipment while saving as much as 33% in the process.

Insider Tips and Forum

As a brand that promotes community, REI members can access an exclusive forum to share inspiration, information, and experiences on their outdoor adventures.

Adventures, Events, and Classes

REI incorporates experiential rewards into its program by giving members special pricing packages for REI adventure trips. They also organize special free classes and events to join either physically or virtually to learn or have fun.

REI Gift Card

When a member applies for the REI Co-op World Elite Mastercard and is approved, they can earn a $100 gift card after their very first purchase. With this MasterCard, members can also earn 5% back on their purchases, 2% cashback on mobile wallet purchases, and a 1% back on purchases made anywhere else.

Member Dividends

REI’s most unique perk offers members a share of the Co-op’s annual profits. Member Dividends comprise a 10% cashback on each eligible REI purchase made within the year. So, for instance, if a member purchased $1000 worth of eligible REI gear, they will earn a dividend of $100 that year. Members can either redeem the amount by requesting a check or by shopping with the rewards.

What are the good things about the program?

The REI Co-op membership program has achieved great success, reaching over 17 million members because of its numerous benefits. It includes access to their in-store garage sales, exclusive discounts, cashback, fast and easy returns, among others. Let’s take a look at why this program works.

Community Engagement

Aside from the standard benefits members enjoy, REI also offers its co-op members a say in the company’s decisions by allowing them to attend their annual member meetings and the franchise to vote for the Co-op’s board of directors. Again, members receive a share of the company’s annual profits through the 10 percent member refund. It is extremely attractive for shoppers because the brand is rewarding members and has created a group of individuals with a shared interest in the outdoors.

Clarity

Outdoor enthusiasts have come to love REI’s loyalty program because of its clarity and simplicity. As seen on its explainer page, members pay a $20 one-time fee to become members and enjoy 10% cashback on every purchase. Exploring their explainer page gives customers, both new and regular, a clear view of the perks they can enjoy when they sign up as a member. In addition, the company has taken the time to outline the catchiest benefits of the program on their main page and attached redirect links for customers who would like to learn more about specific perks.

FAQ Page

One of the most noticeable portions of the REI Co-op membership benefits page is the Frequently Asked Questions page. The brand has carefully listed some of the most pressing questions their customers would ask and provided answers to each of them. New visitors would be encouraged to join the program because there is absolute transparency. People tend to trust brands more when they are more transparent about their operations. Underneath most of the questions, the company has also made its customer support contact details available. It is an excellent initiative and a sign to shoppers that the brand is keen on giving them the best customer experience.


How could they have made their rewards program more attractive?

Ensure high-value customers feel appreciated

One of the best ways to make your most loyal top-tier customers feel valued is to offer them more perks in your loyalty program. Unfortunately, it is the area where REI seems to be lagging. While membership tiers don’t fit in with their cooperative style, the brand could have added more excitement to its loyalty program by introducing some additional membership levels. Adding a gold or platinum tier with more perks, for instance, could tremendously boost sales and push already loyal members to strive for more. Customers feel more inclined to improve their purchasing habits when there is a sense of prestige attached to their membership. If there were more advanced levels where customers had to reach a certain threshold to enjoy, regular members would undoubtedly feel the need to aim higher. Top-tier customers would relish the sense of exclusivity they derive from its attached rewards.

Briefly put, the REI Co-op membership can undoubtedly improve by providing some of the exclusive perks typically found in traditional loyalty programs. REI has built loyalty among its customers in the broader context by focusing on giving them a fantastic experience and a strong sense of community. Some members find the company’s donation to non-profits an even better reason to associate with the brand than the incredible rewards they offer.


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