Why Loyalty Programs are key to Marketing Strategies

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Loyalty marketing strategy

Why Loyalty Programs are key to Marketing Strategies

Loyalty and trust have always been a part of customer transactions but in this growing market customer engagement takes on a new form. This is where customer retention
schemes come in.


The data of consumers is an invaluable resource that can help your business expand and refine its processes. Marketing strategies have always
relied on anticipating the needs and wants of consumers.


Loyalty programs not only track customer spending habits but allows access to personalised information, for example, a profile of what age bracket is attracted to what product.


A good loyalty program is personalised; it should leave the consumer feel as if their values align with the values of the organisation.


There are multiple ways of using loyalty programs effectively for your business. Knowing what your customers want, and how they carry out business, ensures that
you are able to provide the optimum customer experience, in turn, increasing customer retention.


Understanding different types of loyalty programs are paramount as this enables you to decide what is most compatible with your business.



The points-based system is a very popular choice, especially among café and convenience store chains. It works by recording the accumulation of points
gotten through instore or online purchases.


Customers then can redeem the points against the price of items. This system normally relies on being hassle-free. Clothing brand Urban Outfitters has an app that rewards customers a percentage for visiting a UO store.


People want to spend as little time as possible setting up an account and most certainly do not want to remember where they keep their loyalty card. Most popular loyalty programs have integrated loyalty software where customers can keep up-to-date on the discounts available to them.



This is a straightforward approach to customer engagement where a discounted price is available to those who avail of the loyalty program. Normally this comes in the form of displaying a discounted price next to the regular price to incentivise consumers to sign-up. The simple approach to advertising is very effective; customers want to feel like they are making a saving.



This model is more popular in products that have exclusivity surrounding them, the most successful application of the tier system is used by the make-up chain


Marketing a tiered loyalty program incentivises consumers to try to reach the next level through in-store purchasing or online engagement. It rewards exactly
how loyal customers are.



A popular example of this is frequent flier miles; people are more likely to fly with an airline that rewards them with miles in the hope that they
achieve a free flight.



Pay-Up Front
This is when customers pay a fee at the beginning of a year to receive benefits all year round. Amazon Prime and ASOS free next-day delivery use this model. ASOS know that their customers purchase items especially for events on their website, which is naturally a time-sensitive purchase.


By paying at the beginning of the year for free next-day delivery, customers can ensure that their garment arrives on time. Amazon Prime is a similar subscription service where customers can get faster home deliveries and access content unique to Amazon.



Customer engagement is paramount in the 21st centuries competitive market.Customers want to feel as if you’ve engaged with them on a personal level; mass
marketing communications are no longer acceptable.


Loyalty programs offer a way to capture the needs and want of consumers, helping to make their customer experience unique. Customer retention schemes help to achieve increased traffic,
and additional repeat visitors, as well as better engagement from existing customers.


Top tips for planning the best loyalty promotions for your business

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