Case Study
How Headphones.com Built a High-Touch, Tiered Loyalty Program with Lantern to boost LTV by 25%
May 9, 2025
Headphones.com, a premium audio retailer, partnered with Lantern to launch a tiered loyalty program that deepens customer engagement, reduces reliance on discounts, and drives long-term value in response to rising acquisition costs.
About Headphones.com
Headphones.com is a leading audio equipment retailer known for offering premium headphones and audio gear to discerning consumers. Founded by passionate audiophiles, the brand has grown its reputation on expert product knowledge, exceptional customer service, and a high Average Order Value (AOV) that reflects the premium nature of its catalog.
Despite impressive sales and a loyal base of audiophiles, Headphones.com sought to address rising customer acquisition costs (CAC) and engage existing customers more effectively. They needed a flexible loyalty solution that matched their brand’s high-end positioning without relying on blanket discounts.
The Challenge
Meeting Premium Customer Expectations While Controlling CAC
Skyrocketing CAC: During COVID, Headphones.com saw a 30% increase in customer acquisition costs, prompting a pivot towards deeper customer retention strategies.
Incomplete Loyalty Solutions: A previous points-based loyalty widget limited the brand’s ability to fully represent their brand experience. Discount-focused programs threatened to erode Headphones.com’s premium image.
Long Purchase Cycles: Customers purchasing high-end headphones tend to do so less frequently, making it essential to incentivize repeat purchases and maintain brand engagement over a longer period.
“For a higher AOV brand, constant discounting just wasn’t an option. We wanted a loyalty program that would reflect our premium positioning and focus on offering real value to our best customers.”
— Taron Lissimore, Director of Ecommerce @ headphones.com
With the old loyalty platform failing to deliver, Headphones.com removed the program altogether and began searching for a solution that could do more than just award points and coupons.
The Solution
A Tiered Loyalty Program Powered by Lantern
Headphones.com implemented Lantern to build a tiered loyalty program that focused on rewarding their best customers with meaningful perks, rather than simple discounts. By doing so, the brand could:
Offer a Seamless, Embedded Experience
Lantern allowed Headphones.com to embed loyalty components directly into their storefront, ensuring a cohesive shopping experience aligned with the premium brand feel.
Segment and Reward Customers by Value
Tier Structure: By creating multiple tiers (e.g., Silver, Gold, Platinum), Headphones.com encouraged repeat purchases and rewarded loyal customers with perks like shipping upgrades, store credits, and gift cards.
Clear Win-Back Opportunities: Lantern’s flexible reward system allowed the brand to identify and win back lapsing customers by offering next-tier incentives.Prioritize Retention Over Acquisition
With acquisition costs soaring, Headphones.com rebalanced their ratio of new-to-repeat customers from 70/30 to 50/50, increasing contribution margin by focusing on more profitable repeat purchases.
“Lantern gave us the tools to build a premium loyalty experience that truly resonates with our high-value customers. The tiered approach helps us engage, delight, and retain them—all without eroding our brand value with endless discounts.”
— Taron Lissimore, Director of Ecommerce @ headphones.com
The Process
Implementing the Tiered Loyalty Experience
Migration and Setup
Data Export: The team exported historical loyalty data from their previous solution but did not implement a replacement until they discovered Lantern could meet their high standards.
Custom Rewards and Perks: Headphones.com designed tier-specific rewards, focusing on benefits (like free shipping and gift cards) that reinforce brand loyalty.
Klaviyo Integration
Personalized Campaigns: Using Lantern’s integration with Klaviyo, Headphones.com built automated email flows for different tiers, ensuring every communication was contextually relevant and aligned with the tier’s benefits.
Bulk Reward Issuance: The “wallet feature” in Lantern allowed the team to issue rewards in bulk, perfect for targeted promotions and seasonal campaigns without adding extra manual overhead.
Replacing Multiple Apps
Consolidating features like wishlists and referrals under Lantern reduced the number of apps on their site, improving site speed and creating a more streamlined experience.
“We used to rely on multiple apps to manage loyalty, wishlists, and more. Lantern simplified everything, so we can focus on building better relationships with customers.”
— Taron Lissimore, Director of Ecommerce @ Headphones.com
The Results
Growth Through Retention
By implementing Lantern’s tiered loyalty solution, Headphones.com improved customer retention and boosted profitability through the following wins:
Repeat Purchases
Repeat Cycle: The average purchase cycle dropped from 198 days to 98 days, thanks to clear incentives that kept the brand top-of-mind for their audio-enthusiast customers.
Customer Mix Shift
Previously, 70% of revenue came from new customers versus 30% from returning. After launching the loyalty program, that ratio moved closer to 50/50, reducing dependency on expensive new-customer acquisition.
Higher Contribution Margin
Shifting away from heavy discounts and focusing on premium perks helped boost margin. Loyal customers now return more often, at less cost, improving overall profitability.
Time Savings for Marketing & CX Teams
The ability to issue rewards in bulk and seamlessly segment in Klaviyo drastically cut the manual labor needed to keep customers engaged.
Looking Forward
Deeper Retention Strategies
With the tiered loyalty program delivering strong results, Headphones.com plans to expand on its retention-focused approach:
Personalized Upsells: Leverage more granular data to suggest complementary accessories and product upgrades for top-tier customers.
Exclusive VIP Experiences: Host VIP events or product previews for high-value tiers, further differentiating Headphones.com in the market.
Deeper Email & On-Site Customization: Continue refining automated email flows and on-site experiences based on each customer’s loyalty tier and purchase history.
“Lantern transformed our loyalty approach. We’re excited to continue innovating and giving our best customers the white-glove treatment they deserve.”
— Headphones.com Team
Final Takeaway
For premium brands like Headphones.com, a points-based widget or discount-driven approach can fall short. By partnering with Lantern to build a tiered loyalty program—and integrating it into their store experience—the brand successfully shifted the customer mix towards profitable repeat purchases. The result? Reduced acquisition costs, a shorter purchase cycle, and a more engaging, on-brand loyalty experience that keeps customers coming back for high-end audio gear time and again.
