Customer loyalty programs come in different shades and patterns, depending on the business nature, and multiple programs can be combined for a business. The different forms that customer loyalty programs take is based on diverse models. Meanwhile, a customer loyalty program refers to a well-structured strategy that includes software, hardware, communication, commercial incentives, marketing tactics and event planning to build a more significant brand stature for a more substantial and prolonged relationship with customers.
This article discusses some of the best types of customer loyalty programs available for businesses to explore.
8 types of Loyalty Programs
- Point-based loyalty programs
Point-based loyalty program systems are perhaps the most expected programs significantly in the ecommerce sector. One of the reasons this system is standard is the ease of use. As you spend more, you earn more points and eventually get the expected reward. In other words, each time a customer purchases an item or service from the business, the system award points.
The acquired points depend mostly on the size of the purchased item and can also accumulate over time. After the designated time, the points translate into different rewards such as discounts, special customer relationship offers, and monetary benefits on the available items. In all, the customers receive the inspiration to buy more to earn more points and more rewards.
- Spend-based loyalty programs
Spending related customer loyalty programs offer loyalty credits to regular customers who make repeated sales. This system works similarly to the point-based system, but in this case, the loyalty rewards are on the amount the customer spends. Also, it is straightforward to create, understand, implement and maintain the program. In terms of the outcome, the method effectively makes customers spend more and reduce the churn rate.
- Value-based systems
In a value-based loyalty program, the business owner aligns the customers’ interest in the brand’s vision. Fundamentally, every customer has a value goal or expectation in the heart. And that is what they always look for whenever they are about to part with their money. Moreover, these customers’ purchasing power can also increase as they notice more value in the product or service. Therefore, to get customers to purchase a brand continually, the business owner must create more value for the customer.
Also, it is crucial to define the business values that align with the customers’ brand. In other words, the length of the relationship between the two parties depends on how many common values they share. For instance, if you have an online pet store and need more customers for repeated sales, you may create more animal welfare values. As you do so, loyal customers begin to derive more value from your business and are willing to stick to your brand.
- Hybrid loyalty program
In a hybrid loyalty program, the company combines more than one type of loyalty program to form a viable system. For instance, you can combine a point-based system and a value-based system for your e-commerce business. This way, business owners can optimize the two systems’ benefits to achieve better results than they would have done with only one system. Customers can also reach new loyalty programs as they implement the newly introduced methods and strategies.
- Paid programs for VIP membership
Another type of customer loyalty program for your top-rated customers may include creating a VIP membership club. This club may attract a monthly or yearly subscription fee for the particular benefits that come with it. For instance, the benefits may come at special prices, priority notification for new products, unique opportunities, special services, and other special offers. The VIP member club should also come with other unique benefits that are exclusively available to the club members that entices other customers to join.
- Partnered program
In a partnered setting, the customer loyalty program can bring both the customers and the business management into effective collaboration. For instance, the customer retention strategy may include creating more room for partners and investors in offering little stakes. The business’s growth largely depends on building and sustaining these relationships to grow the business.
Also, as the business makes room for more loyal customers to have a stake in the business, they have a sense of ownership that demands more. More so, they continue to do all they can to nourish the business to survive. At the same time, business owners can add extra values through exclusive offers relevant to targeted customers.
- Tiered loyalty programs
Tiered loyalty programs include balancing out a business’s desired goals with the attainable ones towards more consistent buyers. Also, the system allows loyal customers to enjoy some initial benefits that motivate them to do more to attain a higher level, which has more significant benefits.
Therefore, the tier program creates a cadre system where different buyers’ levels attain different loyalty levels with increasing rewards. Also, loyalty in a tiered system draws up loyal customers who continually improve their points that promote them upwards. And as they receive increased points, they climb higher in their loyalty levels and qualify for more significant rewards.
- Game program
Many people, significantly younger ones, love to play games. So, how about integrating a gaming system into the customer loyalty program to achieve the set purposes. Therefore, as a business owner, you may design a gaming application that encourages successful players to repeat purchases and get more results.
The more they get successful about the game, the more benefits they get through the customer loyalty program. Simultaneously, the customers who play the game can also entertain themselves while strengthening the brand’s popularity and acceptance. This double pleasure is a worthy reward for loyal customers.
The benefits of implementing these best customer loyalty programs include a combination of several opportunities that balance the desired of all involved parties. More so, whether it is a point-based, value-based, or spend-based system, the business stands a good chance to improve the relationship between the customers and the business owners. Simultaneously, it is easy for business owners to encourage customers to pursue their interest while making many sales and adding value in the win-win relationship.