5 Attractive Loyalty Program Types For Retaining Customers

January 22, 2021

Point-system? Tiered? Or good ol’ gaming? Discover the attractive systems your loyalty programs can run on and ensure returns from your loyal customers!

Successful loyalty programs must be packaged in equally engaging schemes to ensure loyalty as well as customer returns. For example, they could come in handy card forms that must be swiped at physical stores to accumulate or redeem points. Or it could be an app or online account that must be downloaded and activated in order to work. Whatever package you choose your loyalty program to come in, it has to run on attractive reward systems that ultimately dictate reward accumulation and redemption processes for your customers. 

Let’s learn about five of the most common types of loyalty program that do just that:

1. Point Program

Point program is the simplest loyalty program type as it is the most common. Customers basically acquire points based on their purchases, either in-store or online. The points are translated into some type of reward and is redeemable in a way or another. Basically, this system has a “spend more to get more” principle that is not only limited to purchases; the point program could count non-transactional online behaviours like liking a content online, a page, signing up to receive mail boosts, and downloading apps as acceptable measures of acquiring points ready to be redeemed at a time set by the brand. 

Samples: Chase Sapphire Reserve Credit CardThe North Face's VIP

2. Tiered Program

The tiered system is almost like the point program, but instead of accumulating and bloating the points for a quick redeem, it incorporates certain “levels of loyalty”. The loyalty levels are measured by the amount of money customers spend on one service or product. How much they spend eventually dictates the level they’re on, and increases in spending basically mean higher level placement. Consequently, a higher tier level would mean access to more redeemable rewards. This invariably encourages repeat purchases, with short- and long-term rewards available on the table for customers, redeemable anytime.

Sample: Sephora’s Beauty Insider

3. VIP / Premium Program

While the whole idea of loyalty programs is already exclusive in a sense, the premium or VIP programs take this exclusivity up a notch. Here, customers will have to pay a monthly or annual fee to be a loyalty club member. On top of the default rewards they have access to, a VIP program gives them leverage to enjoy special services, discounts, or consumer benefits crafted especially for them. The benefits are exclusive to select members alone, and this thought strokes the need for exclusivity that most customers crave in their transactions. 

Samples: Amazon PrimeSpikeBall’s SpikePoints

4. Gamification

Rewarding customers just got more entertaining with the introduction of a gamification system. Gamification or “game system” teases customer engagements that include repeat purchases and loyalty overtime. However, do remember that the game prizes must align with the profile of an intended audience. While it needs to be interactive, it should also be simple at best so it keeps spirits high for customers who wish to engage. 

Sample: UNIQLO’s Scan to Win

5. Non-Monetary / Value-Based Program

A value-based program doesn’t necessarily hit customers back with something they can redeem for themselves, rather, it touches on an inherent need to boost a customer’s self-esteem. Since this is “non-monetary”, it seeks to bridge an “ethical, value-based relationship” that allows one to connect with customers on a deeper, value-driven level. For a customer purchase to be met with non-monetary rewards, it must place emphasis on the “mutual” values shared by a business and a customer. A good example of this is when you purchase a product or service from charity organisations; an organisation may promise you that your purchase (and membership) could additionally be directed to a cause, say for example, making the lives of vulnerable children better. The emphasis on these mutual principles also encourage customers to become loyal to a brand. 

Sample: Toms’ One for One

It’s a great time to explore creative options when it comes to loyalty programs; after all, today’s market is constantly looking to be a part of something that not only gives them greater returns, but also satisfies their need for brand connection!