Types of Loyalty Programs

There is no single solution for all types of businesses, ever. For this reason, today that we will talk about loyalty programs, we are going to talk about 6 possible types of loyalty program for your company. As I often comment, there is no universal answer for all companies, so it is always important to understand and analyze what options are available before making any decisions. 

Types of programs: 

Subscription-based programs: 

Generally, the biggest hook of online loyalty programs is that they are free to use. Customers see this as getting free coupons and gifts, even if acquiring these benefits requires them to make a purchase or complete a specific action. However, if you have a well-established brand and offer truly desirable services, such as Amazon, Spotify, etc. You can make the program based on a subscription to your service or product. Some people can stream the membership, but those who opt for it will be much more likely to commit more to the service and get the most out of their subscription. 

Points-based programs: 

One of the oldest mechanics of the loyalty program, earning and consuming what you save, is about earning points and then spending them. In a more up-to-date approach, customers can earn points for a variety of interactions, not just purchase transactions, for example sharing product pages on social media, completing their profile, or signing up for a newsletter. Point systems are easy to manage and quick to implement, perfect for businesses that want to get started quickly. 

Staggered Programs: 

Tiered programs are most of the time the favorites of online shoppers. The system allows them to progress through the program, earning better benefits as they spend more money or earn more points. Higher tiers are associated with more unique brand experiences and rewards for fewer customers, rewards that many people will work towards. Because the levels represent a status not only with your social circle, but also within the brand. Customers are more inclined to make additional purchases to avoid losing their status. Lastly, ranking up requires a serious investment, which means members are less likely to give up their benefits just to start fresh in another brand's loyalty program.  

Benefit Programs: 

Benefit programs completely abandon the earned points system. Profits are a great focus if you have a unique service or are just looking to increase goodwill among your customers. For these reasons, this type of program is ideal for brands that aim to make the shopping experience more enjoyable or to generate brand awareness. 

It is important to be clear about the pros and cons of each program. Not only to see which one sounds more beautiful but to actually do the financial analysis that every project deserves, since, being benefits, discounts, or whatever they want to say, it is an incentive that for the company means cash flow that is ceasing to be received by your product or service.