5 Types of Customer Loyalty Program!

Loyalty marketing is based on strategic management, in which a company focuses on customer behavior loyalty by driving a customer loyalty programs.  A good loyalty marketing strategy can make company keep up a good relationship and increase customer retention rate with a customer by a rewards program. When driving customer loyalty programs, must pay more focus on building customer loyalty and improve customer experience. While satisfying customers’ needs, is also cultivate customers’ emotions and habits towards products. 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 loyalty reward 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 programs:

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 can earn point by purchasing 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 earn point, the more you gain.

When Starbucks launched an app to manage customer’s loyalty points, it was an innovative idea. For customers, they must order or pay with the Starbucks app if they want to earn loyalty points. For Starbucks, they can gather information, habit, location of this app through this app. Empowering them to have more opportunities to know more about their customers.

2.Tiered Program

Customer tiered is a customer reward program that defined by the highest purchase they’ve spent in a year or over their lifetime. Through this rewards 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 loyalty reward program, a company can lower the ratio of discount items to avoid the undervaluation of the product mean time to keep customer satisfaction.

Shop.com’s Cashback program is introduced beautifully with an opt-in popup, people purchase on their website or partnership store can get cashback. If people register as a member and list a referral, shop.com will pay the referral 1/2% cashback on their qualified purchases.

Uber cashback customer loyalty program is different from Shop.com. Uber encourages users referral to their friends to get a cashback.

4. Fee-Based Loyalty Programs

VIP of this case study strategy is to attract customers paying a membership 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 loyalty reward program. Costco membership system is a good example of this case study, the Costco membership stipulates people who want to shop at Costco must sign up a Costco membership and pay an annual membership fee so that they can shop at Costco with 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 Costco membership annual renewal rate is close to 90%, the membership fee has increased their sales and member’s repurchase rate.

Another example of Fee-Based Loyalty Programs is the Amazon Prime membership program. The Prime member needs to pay an annual fee and they will get access to unlimited free shipping in 2 days. Amazon also usually used a cashback program to encourage customers to buy more.

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 customer reward program to entice more sales opportunities.


To launching a reward program, here are some basic guidelines and tips.

1. Simple

If your rules are difficult to understand, it may make your customers feel confused and refuse. So, make it easy and simple to use, easy to join is an important rule.

No one likes to share too much information with an eCommerce retailer, keep the information you really need and attached your privacy policy.

Make sure your program’s rules are easy to join, if customers feel difficulty to earn or spending in your program, they may ignore it.

2.End Goal

When you started a strategy, you must have your goal, your loyalty program rules are set to achieve your goal.

3.Relate with your customer

You cannot only thinking about yourself, but you must also think about your customers. What did your customers need? What they can get if the join your program actively, this is what you customer care about. Meet the demand, build a personal connection with them.


You’ve invested a lot of time creating your customer loyalty program, but if no one knows about it, it might useless. You need to promote it, maybe expose via email, social media, official website or your store. Although it may be just a relatively captive audience, but the people who are visiting your official website are probably interested in your company. The official website is an important way to expose your customer loyalty programs.

Building customer loyalty needs a long-term plan, customer loyalty programs are 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 to cultivate customers behavior loyalty, so you can turn your customers into advocates for your brand and have the valuable returned customer.

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