The different types of loyalty programs

June 30, 2023
min read

There are several different types of loyalty programs that businesses can use to incentivise repeat business and encourage customer loyalty. Some common types include:

Points-based programs

These programs award customers with points for each purchase they make, which can then be redeemed for rewards such as discounts, free items, or special promotions.

Tiered programs

These programs have different membership levels that offer different rewards or benefits based on the amount of business a customer does with the company. The more they spend, the higher the level they achieve, and the better the rewards.

Cash-back programs

These programs give customers a percentage of their purchase back in cash or credit. This can be a fixed rate for all purchases, or a tiered system based on how much the customer spends.

Free-item programs

These programs give customers a free item or service after a certain number of purchases or after reaching a certain spending threshold.

Hybrid programs

These programs combine elements of different types of loyalty programs, such as a points-based system with tiered rewards, or cash-back rewards with free items.

Coalition program

These programs are loyalty programs that are run by a central organisation that includes multiple merchants, with all of them having membership. the member would accrue points or cash back from all of the merchants and redeem them at the central organisation.

Experience-based program

This type of program rewards customers with special experiences, such as exclusive access to events or VIP treatment.

The right loyalty program will depend on the specific needs of your business, as well as the preferences of your target audience. By considering the different types of loyalty programs available, and tailoring it to your business and customers, you can create an effective program that will drive repeat business and customer loyalty.

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