Customer or “loyalty” programs undergo revival as an ideal way to collect customer data and build brand identity. Choosing the right type of customer program is crucial to reap the benefits it provides. This article will explore three main types while offering shining examples of each. Loyalty awaits.

CUSTOMER PROGRAMS GET ANOTHER CHANCE

The major shift toward omnichannel strategies and personalization opened new possibilities and responsibilities. To cater to each customer, you need their data. Collecting them for marketing purposes grows increasingly difficult as new regulations emerge.  

At the same time, you may have noticed a surge in loyalty or customer programs. While overlooked back then, it is now the best way to collect customer data to power automation and personalization.

Besides increasing retention, they help solidify your brand identity. According to Zippia.com, the average customer spends 20% more as a loyalty program member. 

Let’s look at some of the essential types of customer programs.

POINT-BASED PROGRAM

This type involves gaining points for a specific action (a purchase, product promotion, or writing a review). While straightforward, it still increases engagement, collects customer data, and builds loyalty. 

Customers can exchange said points for a discount, with each point representing a monetary value. Additionally, you can exchange points for services or unique products. Clarity, simplicity, and transparency should also be among your topmost concerns when implementing this customer program. 

The North Face works on a basic point-based program, but the range of its rewards stands out among the rest. With up to a 12.5% return rate, its VIPeak offers high rewards in a neatly structured, simple, and cleverly named customer program. 

TIER-BASED PROGRAM

This customer program centers on levels of loyalty. Whether by acquiring points or buying, the customers gradually reach higher and higher membership tiers with increasingly exclusive rewards. The main advantage is superb customer engagement, as each buyer attains status with his purchases. The feeling of being valued does wonders for retention.

Nowadays, programs add gamification elements to engage customers further and hook them. Completion bars, challenges, or achievements motivate customers to buy more and engage with your brand.

One exciting example is Marriott Hotels, which offers five tiers awarded based on customers’ hotel stays over a certain period. Customers gain extra services the higher their tier is, ranging from better Wi-Fi to later check-outs to lounge access. 

According to Kalibri Labs, in 2019, pre-COVID, this hotel chain increased the number of repeat customers staying overnight by 62% after implementing their program.

SUBSCRIPTION-BASED PROGRAM

This type of customer program goes in the opposite direction: customers pay for monthly or annual subscriptions. In exchange, they get substantially more rewards and services: discounts, free deliveries, etc. Logically, this program aims specifically at customers with the most potential and value.

Subscribers become more active and engaged as their purchase frequency increases. Moreover, according to a survey by McKinsey, 60% of customers are likely to spend more after paying the subscription. 

Not surprisingly, the king of subscription-based programs is Amazon Prime. Each member gains copious amounts of goods for just a few euros a month:

• Free delivery options
• Early access to time-sensitive deals
• A rapidly growing streaming service full of original content

Time is of the essence; therefore, offering faster delivery for products bought online is an excellent motivation for customers. 

WELCOME THE RETURN OF CUSTOMER PROGRAMS

There are more variations or combinations of the above. Still, you will likely implement these three types to some degree in your customer program. 

A word of caution: if you also sell products in brick-and-mortar stores, you must find a way to let your customers identify with each visit. Devise and communicate a customer program that motivates buyers to use it: cash-back, members-only discounts, or exclusive products. The sky is the limit.

If you are in the retail, entertainment, hospitality, e-commerce, or pharma industry and contemplate adding your brand with a customer program, CDP & CRM CareCloud can help you out. Our platform offers far more than customer data management.

Within its catalog of indispensable apps is also one of the most complex solutions for customer programs: create, develop, and manage the program you envisioned. Join the ever-increasing roster of high-profile clients such as Volkswagen, Benu, GOPASS, and others. 

Build rock-solid customer relationships with CareCloud.