Everything You Should Know About Customer Loyalty

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A few years ago, building brand loyalty was quite simple: make a fantastic product, advertise it well, provide excellent customer service, and presto! You’ve created a solid customer base.

However, the digital revolution has made it more difficult for firms to engage and keep devoted customers than ever before. Today’s customer is inundated with hundreds of communications from various brands, with few distinguishing characteristics.

Organizations cannot acquire customer loyalty on a one-time basis. To keep its best customers, a company requires a well-thought-out and integrated strategy – in other words, a customer loyalty program. Customers are often rewarded with free stuff, early access to sales, products, and coupons in these programs.

Types of Loyalty Programs

Following are the different types of loyalty programs:

  • Point-Based Loyalty Program

Customers receive a certain number of points for each transaction or action in this program. Customers can then exchange these points for items, services, or savings. 

  • Tiered-Based Loyalty Program

This is a potent strategy because it fundamentally influences consumer behavior and purchase patterns. It does so by tapping into essential human qualities related to social status and acceptance. 

  • Fee-Based Loyalty Program

Highly engaged clientele prefer a fee-based loyalty program and have already decided what they want from your reward program. For fee-based loyalty programs to succeed, they must provide customers with a highly relevant value proposition. These can include free shipping, exclusive discounts, or early access to deals. Amazon Prime is an excellent example of a fee-based loyalty program that has gained widespread acceptance.

  • Cashback Loyalty Program 

Spend X amount and get Y amount in cashback programs that are accessible and uncomplicated. Several industries, including retail, banking, and insurance, have proven to lower client churn rates.

  • Reward Loyalty Program

It is also known as a coalition loyalty program, which involves a company teaming with another brand to provide rewards and incentives to a shared group of customers.

What are the benefits of loyalty programs?

A loyalty program’s primary goal is to keep existing consumers and encourage them to buy from you again. According to an Accenture study, 66% of US customers spend more on brands with which they are emotionally linked or devoted.

Here are some fascinating facts about the effectiveness of loyalty programs:

  • Loyalty programs are considered by 70% of members to be an essential component of their engagement with a firm.
  • A successful loyalty program can boost a brand’s market share by 20%.
  • Consumers are more inclined to visit an online website with a loyalty program, according to 84% of respondents.

How do loyalty programs boost sales?

Loyalty programs boost sales for companies in the following ways:

  • Increasing Customer Retention

There is an old saying, “It costs seven times more to attract a new client than it does to keep one.” In this hyper-competitive environment, a business will require a combination of effective retention and acquisition strategies to succeed.

  • Increasing Customer Lifetime Value

The entire revenue a client will generate throughout their lifetime is Customer Lifetime Value (CLV). It is a crucial metric to consider while making essential sales, marketing, product launches, and customer service decisions.

  • Increasing Brand Recognition and Awareness

Brand recognition can significantly generate sales and conversions in a competitive market with little product uniqueness. This is due to an essential human trait: we prefer to interact with people and things we are already familiar with. 

Why do customer loyalty programs fail? 

Customer loyalty programs fail for the following reasons:

  • Cryptic Communication: This is the most typical culprit in the demise of a formerly successful loyalty program. You have a problem immediately if a consumer doesn’t comprehend your loyalty program’s tiers, earn/burn policies, or incentives.
  • Attempting to Complete Everything Simultaneously: Overcomplicating your loyalty programs by including too many features (social media, referral bonuses, vouchers, and discounts) is a bad idea.
  • Stop-Building-and-Forgetting-About-It Methodology: You launched a loyalty program but didn’t bother to publicize it on your website or social media.

Repairing Inefficient Customer Loyalty Programs 

Take a step back and examine your loyalty program’s regulations objectively to see if you can understand the tiers and earn/burn requirements. 

Evaluate your customers’ average expenditure and frequency of visits. This will help you develop a reward structure that is financially sustainable for you and valuable to your customers.

Make sure that your loyalty program is covered in employee and staff training. Use gamification and leaderboards to encourage employees to learn more about the program activities and promote them to clients.

Introduce new rewards and redemption possibilities to revitalize and freshen your loyalty program. Invest in loyalty program management software that automates your loyalty program’s campaigns and other components. 


Brand loyalty programs are incredibly effective in encouraging repeat sales. According to the “Get With The Program” research, when all other factors are equal, 72% of consumers will choose a shop that offers a loyalty program over one that does not. Therefore, with all the information on loyalty programs available, it is high time for every company to plan their programs. This will help them earn higher profits and help them grow their customer base, and hold on to the old ones.

Dani Khan CEO at blogsFit. Have 1 year of experience in the websites field. Uneeb Khan is the premier and most trustworthy informer for technology, telecom, business, auto news, games review in World. https://blogsfit.com/