5 Types Of Customer Loyalty Programs You Can Use To Boost Customer Retention

Customer loyalty is important to every business because repeat customers make up a large chunk of a company’s revenue. If you can retain customers, you can spend less time and money finding new ones and more time creating the best products and services you possibly can!

One great way to increase loyalty is to build emotional connections. If you have passionate, dedicated customers, not only will they spend more money, they will also recommend you to their family and friends, boosting revenue even more.

The question is, how do you increase customer loyalty?

Loyalty program for customer loyalty

Customer loyalty programs can be a great answer because there are many different types of programs to choose from; here are five of those:

1. Point Programs

When you think of accumulating points, you probably think of credit cards, and for good reason. They encourage customer loyalty by providing points for using their card, which encourages people to accumulate as many points as they can.

You can use this same strategy with just about any business, and the more ways you give customers to accumulate points, the more they will interact with your company.

A few ways you can allow customers to accumulate points include:

  • Handing out points for every purchase.
  • Giving more points for high-end or expensive purchases.
  • Giving points for signing up for an electronic newsletter.
  • Encouraging participation on social media with points.

Just make sure you give customers something good to spend their points on. Allow them to use their points toward future purchases or a discount on a future order.

2. VIP Club

There are a lot of stores out there using innovative loyalty programs. Some of the best make their customers feel like VIPs.

In many cases, VIP clubs come with a cost. Members pay a fee to gain access to better products and services. However, that doesn’t mean your VIP club has to cost extra. You can also provide membership to long-term customers, or those who spend a lot of money with your business.

Once enrolled, they should have access to services that regular customers do not. For example, they could receive special discounts or learn about new products before they are released. You can host special parties for VIP members, or provide a higher level of service, like 24/7 customer support.

3. Partnership Programs

Some businesses operate on an island because they think working with other businesses means working with the competition. That simply isn’t true. There are actually many benefits of partnering with other businesses, no matter what business you’re in!

One way a partnership can pay off for your business is that it can provide your customers with even more value. You could provide them with discounts when they are referred to your business by another company, or you can work directly with another company to offer their products or services, and vice versa. Not only will you discover new customers, but they’re more likely to stick around when you offer them things above and beyond what your company can offer them directly.

VIP membership program for enhancing customer retention

4. Spending Programs

One of the simplest loyalty programs is a spending program. It simply encourages customers to spend more by offering something in return. It could be points, which were mentioned above, but it could be something as simple as offering free shipping after reaching a certain purchase amount.

These are popular with customers because they can tangibly see how they are benefited by spending more money, but they can be a huge benefit to businesses too because they are easier to maintain than some other loyalty programs.

5. Value-Based Programs

Innovative customer loyalty programs are out there, if you know where to look. They are often some of the most successful too because they offer real value to customers.

For example, a well-designed app can provide real value to customers, encouraging them to return to your brand again and again. Donating money is another great way to create customer loyalty. By agreeing to donate a certain portion of their purchase to an organization they care about, they are more likely to spend money with you again in the future.

Value based programs don’t necessarily have to cost any money either! You could simply provide insider information about your industry to boost loyalty.

When customers feel emotionally attached to a brand, they will spend more. Build that attachment with a loyalty program. It may take a little bit of work upfront, but you will enjoy more customers who spend more with your brand in the long run.