💲4 Proven Customer Loyalty Programs That Work | 🕹Gamify, Reward & Delight Customers

Loyalty programs go great with E-commerce and help retain existing customers.

Customer Loyalty Programs integrate and reward brand recall, a win for every brand that successfully pulls it off. Dating back to punch cards and coupons, loyalty programs run by algorithms make it simpler to be handled in mass numbers while tracking useful customer behaviour insights.

Here are 4 models with examples in a nutshell. Stuff outside the nutshell can be found here.

1. Point-Based Loyalty Program

Your users can either redeem their points for credit towards their next purchases or get access to special member-only deals or benefit incentives. These are just the basic means by which many retail businesses reward users with more points. And you can mimic that.

Petco Pals leverages the points program to reward its loyal customers. Typically, users earn 1 point for every $1 spent. When they reach 100 points, they get a $5 coupon. So, a customer must spend $100 to get a $5 reward. And this $5 coupon can only be redeemed on the next purchase.

2. Tier-Based Loyalty Program

If you want to reward your customers for reaching milestones with your business, then tiered loyalty programs are just what you need. The more your customer spends, the higher the tier your customer enters.

This is a great way to increase customer engagement, for every tier adds exclusivity to the program. While with the points program, all your customers get the same reward, with the tiered program, your valuable customers get valuable rewards.

Since each tier comes with better incentives, a gamification element comes to the mix. The milestones and progress bars encourage your users to come back to your store over and over again to earn points.

Now, to help you get started with tiered loyalty programs, let’s take e.l.f’s example. e.l.f’s Beauty Squad Loyalty Club has three tiers – Extra, Epic, and Icon. The more points a member accrues, the more exclusive the rewards they can benefit from.

3. Cash Back Loyalty Program

A cashback loyalty program is much similar to the points program. Just like how your customers need to spend more to earn more points, here, users need to reach a certain spend amount to get a certain amount back.

You can either reward them through coupons or cash. And you can lay out the condition on where it has to be exclusively used – on a product or a brand.

CVS ExtraCare Program allows its members to earn 2% back in ExtraBucks Rewards when they use their loyalty card. The reward program does not impose a lot of restrictions. So, members can use the cash back on almost everything at CVS.

4. Paid Loyalty Program

This is totally different from the above loyalty program types. In fact, premium loyalty programs are the future for your retail stores. They require your customers to pay upfront for instant benefits that they can benefit from at any time.

Instead of prolonged waiting times to earn their rewards, your customers can relish the instant gratification brought about by the premium loyalty program. Since this program is valuable, you will find greater customer engagement, order frequency, and average order value (AOV).

What is more, you can also collect the data about your best customers.

As its premium loyalty user, I like that I can get the best possible shopping incentives no matter when I shop, for investing $119 a year. Besides, the benefits of Amazon Prime are not purely transactional. I get experiential bonanzas like video streaming and others out of this program.

Our team has put up a detailed guide on these models, cheers if it helped🍻!

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