Loyalty programs are good ways for companies to show how much they care for their esteemed customers. Successful businesses are the ones that are not only concerned about how to entice more new customers but those who dedicate their time and efforts to retain the existing loyal customers. 

Several business surveys showed that the rate at which a company loses customers is greater than the rate at which they gain new ones. Hence a company must pay more attention to retaining their loyal customers through effective loyalty programs rather than spending more money, time, and energy on advertising to gain new customers. 

It’s more a wiser decision to spend your marketing dollars nurturing your relationship with your loyal customers. They have already chosen to show how much they believe in you by purchasing your product. 

Research showed that Retaining your loyal customers can boost your profit margin by 80%. Establishing a loyalty and rewards program is one of the best ways to show your faithful customers that you care for every dollar they spend on your product. 

Loyalty programs keep your customer interested in patronizing your products or services. When the competition is on the rise in this new business age, people are not ready to stay with a company that neither recognizes them nor their money. 

However, many loyalty programs that have been organized to bring customers closer are instead chasing them away. Most companies are not getting the concept of loyalty marketing right. Research showed that about 60% of customers who have been a member of a company’s loyalty program have opted out within the last year. Those companies invest their money on a failing loyalty program that does not bring returns. 

This need to address the root cause of the fall of many loyalty programs will usher us into discussing some keys to successful loyalty programs.

The following are critical elements in every successful loyalty program:

  • Mouth-watering Rewards  

Some loyalty programs are failing because the acclaimed rewards are not tangible enough to convince customers to stay. Many loyalty programs focus on offering customers small prices, one free product after a large purchase, or chances to travel for a vacation in a country that customers might not even be interested in. 

Research showed that over 70% of customers prefer a loyalty program that will make them save money. If you want your loyalty program to serve your intended purpose of sustaining your existing customers, bear this fact in mind. 

  • Emotional appeal

Customers don’t like to subscribe to a company’s loyalty program if they are emotionally connected with the brand. Research on customers’ behavior showed that most customers prefer a particular above other competitors not because they are producing better quality but because the company has a way of appealing to their emotions.

Customers desire to buy from a company that is ready to provide a full customer experience rather than a company that will only offer them products. A study unveiled five things that make customers feel emotionally connected with a brand:

  • They care about me
  • They understand me
  • They make me feel special 
  • They care about the world 
  • Their products are for people like me. 

A good loyalty and rewards program must appeal to customers emotio0ns to make them happy to stay. 

  • Digital optimization

A good loyalty and rewards program must be accessible for customers on mobile devices. Most customers cannot tolerate a malfunctioning mobile app for transactions. Most companies recorded low traffic when customers started complaining about their mobile app. Without a doubt, customers feel more comfortable with a program they can easily access on their mobile devices. 

A successful loyalty program must also be interactive. Customers love a website or a mobile app they can talk to. Even if your loyalty program is mobile-friendly, it will not sustain customers for a long if it is not fun to use. A customer-engaging loyalty and reward program must have exciting features that can draw and retain customers’ attention anytime.     

  • Thinking beyond transactions 

You are creating a loyalty program because you want to convince your customers that you are also interested in them aside from the business transactions you already share. So, let your program reflect your mind. 

It is smart to rewards activities such as following your social media pages, writing reviews, downloading your apps, sharing your posts, and more. 

Here are examples of three great loyalty programs you can learn from to create a better customer experience.

1. Points-based loyalty program 

Points-based loyalty programs are regarded as the most common type of loyalty programs. This type of program is more popular because it is easy to operate. Customers earn points and redeem them in terms of credit for their next purchase. In this loyalty program, customers can track their points through their loyalty cards, mobile apps, or online accounts.

A points-based loyalty program seems to be the most understandable for customers because most companies adopt this system to reward their customers. Most customers know how it works, how to use it, how to join, and more. 

2. Tier-based loyalty programs 

Tier-based loyalty programs start with earning points for every purchase. Tier-based programs are in levels like video games. In this program, customers are expected to make more purchases after attaining a level to unlock another level where he/she will start enjoying greater benefits and more opportunities. 

This system motivates customers to deliberate efforts to advance to the next level, which means more spending. The greater the benefits, the more the purchases. Tier-based loyalty program seems to be the most engaging program for customers because it gives them a level to strive for and motivates them to buy more. 

3. Mission-driven loyalty programs 

Some loyalty and rewards programs are not based on points and tiers. Some companies try to integrate their loyalty programs with their mission. If your company has a social mission, this type of program will work better for you. 

Relating your customers with your mission enables you to build a stronger customer engagement and encourage consistent patronage that will last for an extended period.  A mission-driven loyalty program makes customers feel like they are making impacts in other people’s lives with every single purchase, whether big or small. 

Ben & Jerry’s is an example of a company that uses this type of loyalty program successfully. 


Customers become loyal to your brand when you engage them. So, loyalty and rewards programs are reasonable means of keeping them. Picking from the above-listed examples of great loyalty programs will help you build a stronger customer base and drive more purchases. 

Leave a Reply

Your email address will not be published. Required fields are marked *