Loyalty Program

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What is a Loyalty Program?

A customer loyalty program is a marketing strategy used with the aim of retaining customers or in other words, encouraging customers to continue choosing products or services provided by a certain retailer.

Benefits of Loyalty programs 

  • Increase revenue: The increase in loyal customers will easily lead to a considerable increase in retail profits since customers have trust in the retailers.
  • Improve customer satisfaction: Retailers can make use of program reports to measure customer engagement and alter their service appropriately. In addition, loyalty programs also express how businesses value their customers, strengthen the relationship and reinforce customer loyalty.
  • Expand brand image: Loyalty programs also support marketing activities and help to attract new customers.

Some Highlight Loyalty Programs

The point program

The point program is the most popular and simplest strategy which uses points as a kind of reward for each purchase. The amount of given points depends on how much customers have spent. When customers collect enough points, they can use them to redeem other rewards. Those rewards could be certain products or services included in the program.

The North Face (TNF) is a typical business that succeeds using the point program. Specifically, TNF gives customers 10$ for each dollar they spend. And customers are allowed to make new purchases with those points. Furthermore, customers can track their points by using the TNF application.

The paid program

When customers join a paid program, they are offered some monthly or annual pricing packages along with certain benefits and services.

The membership offered by B&N costs 25$ each year. Customers who pay for this will obtain many benefits such as free shipping, special discounts, and so on.

Spend-based loyalty programs

With this program, retailers will offer their customers loyalty credits which are calculated based on their spending during certain time periods. Retailers can also use spend-based programs to recognize high-spending customers

Azerbaijan Airlines is a good example of successfully using spend-based loyalty programs. Frequent fliers who soon reach elite status are specially served with complimentary lounge access, early boarding, and extra checked baggage allowances.

Gaming program

Retail businesses using this program will involve their customers in some fascinating activities. Through these activities, retailers can entertain customers and simultaneously encourage their purchases.

M&M’s Eye-Spy Pretzel is one of the most famous gaming programs for the new M&M candy version. When launching their promotion, M&M posted a picture of a tiny person hidden among candies and then challenged the public to find him. This strategy soon went viral and certainly brought the business many considerable benefits.


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