Loyalty programs are a great way to secure earnings and ensure customer engagement. They are essentially marketing programs where the user earns some benefit by being loyal to the brand through the regular purchase of products and services. This further enhances the brand relation with the customer to the point where they may advocate for it.
There are many types of programs for a company to choose from. However, selecting the incorrect one can result in loss of customers thereby loss in sales and perhaps reputation of the brand. You do not want that to happen, do you?
Learn which loyalty program suits your business needs and makes your customers more loyal to you.
There are four main types of loyalty programs.
Point per Purchase
What Is It?
The concept of this program is to reward points to the consumer for every purchase they make. Accrual of points gets them a range of benefits such as discounts, rewards, gift cards, and sometimes even free products and services.
It is a simple and efficient scheme of spending more to earn more that is easy for the consumers to track. People like to work hard towards accumulating points especially as the rewards increase in value over time.
Which Business Should Use It?
Just like customers find it easy to follow, most businesses find this program easy and simple to implement regardless of industry. Tracking points can be done through a physical card for large businesses or a plain punch card for small businesses.
Multi-Level Customer Rankings
What Is It?
They are similar to the point-based program except the customers get segregated into multiple levels. These levels can be displayed through badges or other iconography and consumers achieve them by gaining more points. Higher tiers award better and more rewards.
This system creates genuine value for the customer as it becomes a status symbol. The additional perks attached with each category further makes the customer appreciate the business.
Which Business Should Use It?
Businesses that have infrequent but large purchases such as those in the travel or automobile industry should employ this program. Even high-end luxury brands can utilize this program.
Refer a Friend
What Is It?
Every business likes positive reviews but the best way to make sure your customers hear them is through a referral program. In this, there are listed incentives that are awarded when a customer refers a friend or a relative and then that friend uses the brand. Family and friends’ advice is preferred by 77 percent of participants in a study conducted by Nielsen on product information awareness.
Which Business Should Use It?
Any business can use this method as the words of your close associates are credible compared to those of strangers. However, the rewards must be of a higher value to make the program seem worthwhile. Also, you cannot be too hasty about asking a customer to refer someone as it can be a deterrent.
Play Games To Win
What Is It?
Spin to win, scratch the sticker, and pull the lever are examples of gamified programs where the customer is enticed to play the games to win prizes. This interactive experience invites them to keep making purchases for the chance to win a better reward.
Which Business Should Use It?
Firms from all sectors can use this type of program as it makes the buying journey for the customer more compelling. The games should be targeted according to the type of product or service the company provides. However, the initial expenses of developing the game will run high hence, it should ideally be used by businesses with a significant budget.
Conclusion: Select the Right Program
Now that you have read about the four types of loyalty programs and their benefits, you can select which one is most suitable for your firm. Remember to always keep the consumer in mind while finalizing as their desire to participate is what will make your program successful.
