A Guide To Customer Loyalty Programmes For Businesses

As brands and markets have grown over the years, business has become more competitive than ever. For many businesses looking to engage in this highly competitive market, creating great loyalty programmes for customers is a perfect way to boost customer retention. 

Nowadays, customer retention is equal to, if not more important than, new customer onboarding. By offering loyalty programmes, both the business and the customer benefit. These initiatives don't just retain customers, they also create deeper bonds. This guide is going to take a closer look at customer loyalty programmes for businesses, exploring their benefits, the types you can get, and how different businesses implement them. 

What Is A Customer Loyalty Program?

Designed as an important strategy within business to encourage customers to continue buying a given product at the business, customer loyalty programs tend to be frameworks that offer discounts, rewards, exclusive benefits, or promotions for customers who are regularly transacting with the business. This creates a loyalty to the brand and a sense of belonging for the customer, whilst the business retains comfortable trade. 

Types Of Customer Loyalty Programmes

Whilst there is no one-size-fits-all programme that every business will use, there are a few different tried and tested tactics and strategies that businesses have modelled successfully in the past. The type of loyalty programmes often depends on what sort of business and industry it is, but can also vary depending on the customer base. 

1. Promotion Programmes

These are systems that are set up to offer customers different free promotions or bonuses on products that the business is selling. They often come with Ts&Cs over specifics, but will allow customers to pay into one given stream to receive something in return for free or at a discounted price. These types of programmes are most extensively used in online casinos and the gambling industry, where platforms will offer bonus bets, promotions for better odds, or free spins. These programmes entice bettors into new platforms and retain existing customers by providing improved chances at prize pots. Many online casinos now offer these sorts of promotions, but if you are in Australia, checking out Gavin Beech's list of the best online pokies for 2025 will allow you to scope out great promotion programmes to start you off. 

1. Points-Based Programmes

The most common and flexible model of loyalty programmes that businesses adopt is the point-based one. This essentially will see customers earn points for every purchase or transaction they make. These points can then be collected, saved, and redeemed for rewards further down the line. The likes of Starbucks allow customers to earn points with every coffee, which eventually will amount to enough points for a free one.

1. Tiered Loyalty Programmes

These are often used by airlines and credit card companies. They will implement a tier system (for instance, silver, gold, platinum) and, depending on how much the customer is engaging with the service, will allow further unlocking of perks. For credit cards, this sees bigger spenders allowed to move to higher rates of lending, whilst airlines will reward frequent flyers. 

1. Gamified/Mission Programmes

These sorts of programmes will include an additional aspect to your purchase, which may make you more inclined to continue to do business with the given business. This could either be through a brand's social and environmental missions, where customers can donate to good causes they align with, or through the gamification of purchases, such as run clubs, challenges, or badges, which continue to keep customers coming back for more.

1. Subscription Programmes

Paid programmes or subscription programmes are incredibly popular with businesses nowadays. This will enable customers to pay a fee for access to exclusive content and benefits. These types of programmes are often used by TV streaming companies such as Amazon Prime. Subscription programmes often also have referral programmes built in. This means existing customers will gain bonuses for referring new customers and act as by-proxy brand ambassadors.

Designing An Effective Loyalty Programme

There are a few basic tactics that businesses will want to use to ensure they have crafted the best programme for their brand. Knowing what kind of customer you have and how the customer interacts with your product is pivotal. By understanding this, you can tailor your programme to what your customers need. 

Defining the objective of your programme is the next best step. This means that you can clearly set out what the structure of the programme looks like, which can be clearly relayed to customers when needed. Once you have clear objectives, choosing the right reward programme that is best suited to the type of business you are in will matter. This should always align with customer expectations and should be attainable for customers. There's no point in having a rewards system if customers feel like they can never get any rewards from it. These rewards should also try to reward diverse customer actions, as well as remain targeted. 

Once you have this base working to promote the programme, along with integrating marketing tools to track and optimise it is imperative to ensure you are making a programme which is dynamic and effective. This will prevent the programme from going stagnant and failing. Making use of social media, tracking tools, and personalized communications tactics is crucial for this stage. 

Why Loyalty Programmes Matter?

A major benefit of customer loyalty programmes is that they are very cost-effective. Whilst you may be giving rewards to your customers, this can be significantly cheaper than trying to attract new customers. Retaining customers is imperative to business survival. 

Whilst retaining these customers, you are also going to ensure an increase in revenue from these existing customers who will continue to engage with the product or service from a brand they feel secure with. Not only this, but the satisfied and loyal customer is bound to advocate for the business with their friends and family, which will expand the brand. 

Conclusion

If, as a business, you manage to avoid an overcomplicated programme and utilize technology to analyze how it is going, then you should see your company's loyalty programme become a success. Ensuring it is tailored and relevant to the customer base, a loyalty programme can be a great growth tool for any business. Offering these sorts of loyalty programmes will see brands provide discounts or rewards, which is sure to drive purchases, deepen relations with existing customers, and expand the brand. A good loyalty programme can make it easy for your customers to stick with your brand in such a saturated market.