Contemplating different types of loyalty programs for your customers?
Well, you’ve come to the right place. The bonus? I'll show you around loyalty program automation software demo so that you can also get started with your own.
Let’s dive straight in.
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What is A Point-Based Loyalty Program?
Pause for a second and bring to memory the most common loyalty program.
Point-based loyalty program, right?
The reason why most of your retailer peers go with this is for its rapid growth. So, you can also get started with it right away for your business.
Well, in a point-based loyalty program, your customers who spend more get more incentive points. That is, with each and every qualifying transaction that your customers make, they accumulate points.
Your users can either redeem their points for credit towards their next purchases or get access to special member-only deals or benefit incentives. These are just the basic means by which many retail businesses reward users with more points. And you can mimic that.
How to Automate the Points-Based Loyalty Program?
Example of a Points-Based Loyalty program
Petco Pals leverages the points program to reward its loyal customers. Typically, users earn 1 point for every $1 spent. When they reach 100 points, they get a $5 coupon. So, a customer must spend $100 to get a $5 reward. And this $5 coupon can only be redeemed on the next purchase.
But the points will expire 45 days after the issue date. And in case the customer makes no purchase for 180 days, then his balance will be reduced to 0.
While this makes it difficult for infrequent customers to take advantage of the rewards, there is a greater possibility of them turning into frequentists for the same reason.
Keep this in mind, though. To effectuate a hassle-free, beneficial points program, you need to set your goals. And let the points accruement process be transparent to your customer.
When Should You Use Points-Based Loyalty Program Campaign?
If you want many people to sign up, then the points program is best. But it can not help with increasing engagement. Because it allows low differentiation and low value. So, this program is all about customer acquisition only.
What is A Tier-Based Loyalty Program?
If you want to reward your customers for reaching milestones with your business, then tiered loyalty programs are just what you need. The more your customer spends, the higher the tier your customer enters.
This is a great way to increase customer engagement, for every tier adds exclusivity to the program. While with the points program, all your customers get the same reward, with the tiered program, your valuable customers get valuable rewards.
Since each tier comes with better incentives, a gamification element comes to the mix. The milestones and progress bars encourage your users to come back to your store over and over again to earn points. And the best part, this makes the program fun while also easy to understand.
If you want to take this tiered loyalty program to the next level, you could also show your users the percentage of total users in each tier. This will allow your loyalists to see their status relative to their peers in the program. Eventually, this will play on the competitive desire for a limelight social status.
This program also drives home the message that not all customers get the same rewards. So, your most valuable customers automatically feel the most valuable.
How to Automate Tiered Loyalty Programs?
To automate your tier-based customer loyalty program, try Ingage. In this video below, you can see how you could automate a tier-based loyalty program using Ingage.
Example of Tiered Loyalty Program
Now, to help you get started with tiered loyalty programs, let’s take e.l.f’s example. e.l.f’s Beauty Squad Loyalty Club has three tiers - Extra, Epic, and Icon. The more points a member accrues, the more exclusive the rewards they can benefit from.
When Should You Use A Tiered Loyalty Program Campaign?
Note that the tiered loyalty program automation does not offer a lot of value to lower-tier members. But this is the best for your VIP customers, for it touches on the paid loyalty territory where the best incentives require spending. So, this loyalty program can nurture your customers to purchase upfront for the later advantages.
Here is the brownie point: Besides, the sense of exclusivity that tiered loyalty offers enhances your loyal customers to become brand advocates.
What Is A Cash Back Loyalty Program?
A cashback loyalty program is much similar to the points program. Just like how your customers need to spend more to earn more points, here, users need to reach a certain spend amount to get a certain amount back.
You can either reward them through coupons or cash. And you can lay out the condition on where it has to be exclusively used - on a product or a brand.
How to Automate Cash Back Loyalty Programs?
Rewardster is a good starting point for your cashback customer loyalty program automation. Its pricing model increases with every feature. And take a look at the video below to understand how you can use Rewardster to automate cash back loyalty programs.
Example of Cash Back Loyalty Program
CVS ExtraCare Program allows its members to earn 2% back in ExtraBucks Rewards when they use their loyalty card. The reward program does not impose a lot of restrictions. So, members can use the cash back on almost everything at CVS.
However, the only catch is that members who fail to spend $50 in qualifying purchases or do not reach a minimum of $1.00 in ExtraBucks rewards towards the end of the earning period can neither get their incentives nor have their earnings carried over.
This makes it hard for infrequent shoppers to avail themselves of the rewards.
When Should You Use A Cash Back Loyalty Program Campaign?
If you want a loyalty program automation with few barriers to sign up, then the cashback loyalty program is a good choice. It is easy for your customers to understand the value proposition you offer for their purchases. And simultaneously, you can drive additional sales when your users redeem the incentive.
But the only problem is that, in this program, you reward both profitable and unprofitable customers alike. And there is little room for engagement.
What Is A Paid Loyalty Program?
This is totally different from the above loyalty program types. In fact, premium loyalty programs are the future for your retail stores. They require your customers to pay upfront for instant benefits that they can benefit from at any time.
Instead of prolonged waiting times to earn their rewards, your customers can relish the instant gratification brought about by the premium loyalty program. Since this program is valuable, you will find greater customer engagement, order frequency, and average order value (AOV).
What is more, you can also collect the data about your best customers.
This program would not get you as many sign-ups as the others I mentioned above. But this will help you strengthen your rapport with your best customers, those who will be happy to pay to join your program.
And as you get on with paid loyalty programs, you need special expertise to build, manage, and optimize the same. Customer relationship management and employee training are vital. With CRM cum loyalty automation software like Ingage, you could render the best customer experience possible.
How to Automate Paid Loyalty Program?
Automating paid loyalty programs need custom development. Get in touch with Ingage if you are looking for a solution.
Example of Paid Loyalty Program
That is the heart of premium loyalty programs. And Amazon is no stranger to the game.
As its premium loyalty user, I like that I can get the best possible shopping incentives no matter when I shop, for investing $119 a year. Besides, the benefits of Amazon Prime are not purely transactional. I get experiential bonanzas like video streaming and others out of this program.
When Should You Use A Paid Loyalty Program Campaign?
If you are at a stage wherein you need to engage your most valuable customers on a higher level, then the paid loyalty program is an optimal choice for growth. While your low value and casual customers might find the membership fee a barrier to sign up, your VIP customers would definitely find it beneficial.
But while building this, listen to what your customers are really interested in and take it up from there.
The answer to this question purely depends on your goals.
Do you need to level up your customer acquisition efforts? Then, go ahead with a cash back or points loyalty program automation.
On the flip side, want to delight your loyal customers and transform them into brand ambassadors? Go ahead with a paid loyalty program automation.
Want to balance it out and better the customer engagement game for your new, existing, and valuable customers? Get started with a tier-based customer loyalty program automation.