8 Types of Customer Loyalty Programs

Customer Loyalty Programs

Businesses have been using points schemes, tiered programs and even paid membership loyalty programs to try and retain loyal customers, But some businesses decide to use only one model; Customer Loyalty Programs, while others may combine two or more. A loyal customer trusts that the brand will do the right thing for them and in the value, they receive from using the product.

What is Customer Loyalty Program?

A customer loyalty program is a structured strategy that combines the use of communication, software, hardware, gamification commercial incentives, marketing tactics, event planning etc, in order to help brands build a stronger relationship with their customers. The goal of a Customer Loyalty program is to increase retention and eventually advocacy. How can you be sure which type of loyalty program is the key for your brand? Here are the most popular types of loyalty programs, and help you figure out which type of loyalty program is right for your brand.

Why are customer loyalty programs important?

The benefits of customer loyalty programs include:

  • Better customer retention: Customers are making purchasing decisions not just on price, but on shared values, engagement, and their overall experience of your brand.
  • More customer referrals: If your customers enjoy the benefits of your customer loyalty program, they will tell their friends and family about it.
  • Cost efficiency: It’s more cost-effective for your business to retain happy customers than it is to consistently churn and acquire new ones.
  • User-generated content: Programs that encourage happy customers to publish reviews and ratings on websites and social media create authentic ambassadors for your brand.

1. Point Programs

The point programs are the most common Customer Loyalty Programs around the commerce world, as they are the simplest ones. Every time a customer makes a purchase in-store or on your website, they get a certain amount of points depending on the size of their purchase. These points are translated into some type of reward. It can be a discount or a special customer treatment, customers seem to work toward collecting a certain amount of points to redeem their reward.

2. Spend-Based Loyalty Programs

Customers get loyalty credits for the amount they spend at a business. This Customer Loyalty Program is very easy to understand, create and maintain. It is also proven to be an effective way to increase transaction amounts and reduce churn rates.

3. Tiered Programs

The tier program is based on levels of loyalty. Customers get points whenever they purchase something. The more points they receive, the higher the loyalty level they will reach. The higher the level, the more rewards they will get.

4. Paid Programs – VIP member club

Customers pay a monthly or annual fee to join your VIP member club with access to special services, discounts or unique opportunities. The paid Customer Loyalty Programs should include benefits that are exclusive to members or either wise it will lose their value.

5. Value – based Customer Loyalty Programs

If you structure a loyalty program that is aligned with your customer’s values, they are more likely to become brand ambassadors. The question here is: How do you reward your customers without rewarding them?

What Customer Loyalty Program To Choose?

If you are simply trying to get as many consumers to sign up for your loyalty program as possible, then a traditional free program might be the best fit. if you are concerned about getting your most committed customers to engage with your brand, premium loyalty could be exactly what you need to elevate those relationships to the next level.

How Systrix can help you build great customer loyalty programs

We have sufficient competencies to create fully-fledged customer loyalty platforms since both software development expertise and a deep understanding of loyalty management belong to our specs. Besides, our project managers and engineers can assist you in preparing terms of reference for your loyalty management program. Contact us right now to start your journey across the exciting development process of your tailor-made loyalty management software.   

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