5 Types of Customer Loyalty Program!

Customer loyalty is the favor of a customer to continue purchasing products or services from a specific company. Through this action can build mutual trust and keep interdependence between companies and customers. 

An industry report by Loyalty Point discovered that 80% of customers will buy more from a business if they have a rewards program. As this program continues growing in popularity,  there are getting more strategies available that you could easily find in the market. Our 5 picks for the most popular customer loyalty program:

1.Point Program

This is the most common and simple way for a business to rewards its customers. The basic principle is whenever your customer makes a purchase, they will get a certain amount of points and they will be able to redeem a gift or other rewards in any forms by using the points. That means the more you spend, the more you gain.

2.Tiered Program

Customer tiered is defined by the highest purchase they’ve spent in a year or over their lifetime. Through this program could help a company differentiate its brand community and offer a specific reward that value for them. This method will keep them feel happy and unique to be part of your company’s members.

3. Cash-Back Loyalty Program

Cash-back Program is to reward the customer by paying them an amount of percentage from the purchase price. With this program, a company can lower the ratio of discount items to avoid the undervaluation of the product mean time to keep customer satisfaction.

4. Fee-Based Loyalty Programs

VIP of this case study strategy is to attract customers paying an annual fee to join as a VIP member and enjoy special services, discounts or unique opportunities. Usually, customers who did mass purchasing periodic would definitely benefit from this program. Costco is a good example of this case study, people who want to shop in Costco must sign up a member card and pay an annual fee so that the member can buy Costco products at a super cost-effective price. This strategy has set Costco apart from a competitor and increase returning customers. Membership fees are considered a sunk cost. From a buyer point of view on how to make every cent count is to stay spending. It is worth noting that the member annual renewal rate of Costco is close to 90%.

5. Partner Program

By practicing this Partner Program, you are going to cooperate with another business which can benefit both party’s customers with value that is relevant to them and goes beyond what the company can exclusively offer them. Many insurance companies have using this reward system to entice more sales opportunities.


Customer loyalty is a truly innovative approach that can create huge value for retailers. In order to achieve, you must make your strategy, value proposition that aligns with your business, so you can turn your customers into advocates for your brand and have the valuable returned customer.

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