customer loyalty programs

It is a fact that it requires more planning and effort to attract a new customer than to keep an existing one for startups and small businesses. Therefore, it becomes crucial for you to turn one-time buyers into repeat consumers. Considering from a business perspective and revenue, there is a secret weapon called customer loyalty programs that benefits your business in increasing the number of users.

So, what exactly is a customer loyalty program?

What are customer loyalty programs?

A customer loyalty program is a system where companies offer to bring steady customer satisfaction through rewards for frequent purchases of their products or services. It is one of the most prevalent tactics to encourage consumers to make repeat purchases or to get benefitted from your business.

If you are a startup or a small business, here are the seven best customer loyalty programs that you can replicate to keep your customers returning.

1. Insider Programs

One of the most effective ways of customer retention strategies is to acknowledge your loyal customers through newsletters. These are called “Insider Programs” and benefit customers by rewarding them with exclusive discounts, advanced access to sales, and special events.

Customers want exclusivity, and insider programs are one of the most used customer loyalty programs to reward your loyal patrons. So, offer special pricing or perks to members or subscribers of your mailing list.

For example, Vichy Laboratories’ insider rewards program lets the customers enjoy their exclusive offers, early access to their exclusive promotions and new products, and so much more. So, it gives buyers an incentive to keep them coming back.

Combine the insider program with your customer loyalty and watch your customer base grow.

2. Mission-Driven Loyalty Program

Next in order is one of the effective customer loyalty programs tied to a philanthropic cause. Here, the customers sense positivity for supporting a company that they know is contributing to a humanitarian cause, and it motivates them to continue shopping. So, mission-driven loyalty programs are rewarding that make customers feel good.

For example, under the umbrella of P&G’s global philanthropic program ‘Shiksha,’ with a theme ‘Live, Learn, and Thrive,’ it is empowering girls’ education in India’s Rajasthan and Jharkhand. It reveals that people are concerned more about education and doing a noble thing by accepting donations for contributing towards educating the less fortunate children since its inception. Their program gives customers a feeling of ownership in helping social causes.

3. Points-Based Loyalty Program

Points-based loyalty program is one of the most cost-effective ways to implement your offers. It is a way to motivate consumers to earn reward points for their every purchase from shopping or using your services.

Points-based customer loyalty programs give customers an incentive to spend more. It let your buyers accumulate bonus credits which they can redeem for perks, cashback, freebies, etc. It is not just about purchasing something, but they earn points once they share their experience on social media by leaving reviews or downloading apps on their phones, or celebrating birthdays.

For example, Taco Bell India rewards 1000 bells on every purchase of ₹250 or more, and once you earn 3000 bells you will get an amazing Taco treat from the menu.

4. Tiered Loyalty Program

A tiered loyalty program is like a points program, but it rewards customers in a different way. The incentives are based on how much the patrons have spent on their purchases. For example, the buyers will get a special discount if they spend a minimum of $500 a month. In another way, these programs offer exceptional incentives for users who spend more or are willing to take several bundles.

The Starbucks loyalty program awards a free drink after consumers purchase at least 12 drinks, and the rewards will increase as they spend more for drinks or food.

5. Subscription Loyalty Programs

Subscription loyalty programs are paid loyalty programs where users pay an upfront fee to get their valuable rewards. The purpose is to focus on the consumer as the brand’s unique selling point.

Subscription programs benefit customers because they can save money. They have the option to pay either an annual price or regular monthly charges to get exclusive access to deals, services, events, and information. Also, it can be another incentive for patrons to love your products or services.

6. Refer-A-Friend Program

Referral programs offer customers an exclusive discount or a reward when a user refers a friend to make a purchase. It is free advertising for businesses because it encourages the customers to spread the word about the brand as it creates a special feeling for them with the company.

Referral programs can become attractive because users will get rewards for bringing new customers to a business. It shows the user loves the brand and enjoys the monetary prize for referring a friend.

7. Gamified Loyalty Programs

Gamified loyalty programs are fun. They encourage customers to keep playing because of the exclusive rewards earned through playing games. Just complete the tasks or missions, including liking the social media handles, posting reviews, or downloading the gaming applications to get bonuses. It makes them feel appreciated, and they are more likely to spend more money to play games.

Some examples of gamification include scavenger hunts, contests, and surveys.

The Bottom Line

It applies to every industry that no two customers will have the same loyalty preferences. Some like discounts, while others enjoy exclusive access to benefits. So, customer loyalty programs give reasons for users to keep coming back for more.