A loyalty program is a scheme that makes buying again worthwhile for the customer. Each purchase earns points, discounts or perks, and the customer has an incentive to return to the same store.

Common forms#

  • Points: each purchase earns points, and points are exchanged for discounts or gifts.
  • Tiers: bronze, silver and gold with more perks for heavy buyers
  • Cashback: part of the amount returns to a wallet.
  • Refer a friend: both the referrer and the friend get a reward.
  • Special perks: earlier access to products or free shipping

Why is it worthwhile?#

Keeping an existing customer is usually cheaper than winning a new one. A loyal customer buys more and more often, recommends more readily and stays even at slightly higher prices.

What makes it good?#

  1. Its rules are simple and understandable.
  2. The reward has real value to the customer.
  3. Earning the first points is quick and easy.
  4. Customer data is used with respect for privacy.
  5. It builds a sense of belonging rather than constant discounting.

Common mistake#

A complicated program, or points that expire so nobody can spend them, makes customers angry. Also include the program's cost in your profit margin.

Loyalty program data is the basis for personalized messages, reminders and suitable offers.