If you want to stand out, it is time that you consider loyalty programs. Whether you have an online or offline business, loyalty programs can never go wrong. When you hear a loyalty program, it is a marketing tool that rewards the buying behavior of customers.
There are many types of loyalty programs available. There are some businesses that utilise only one type while there are other companies that combine two or more. To determine what your business needs right now, here are the different types of loyalty programs:
Tiered programs
This loyalty program is basically an advanced point system. Tiered programs reward the initial loyalty of customers and encourage more purchases. The principle is easy – if the customers reach a certain number of points, they will be upgraded to the next tier and will receive other exclusive benefits.
To determine if it is the right solution, you should know the advantages and disadvantages of tiered programs.
• Advantages: in this program, customers are less likely to desert your program once
they reached a higher tier. The program targets VIP or your most valuable customers.
• Disadvantages: for new customers, they might be discouraged because they will start from the bottom. In most cases, this only rewards the select top-tier customers.
Points program
The concept of points program is simple – the customer will be rewarded with certain points after the purchase. To determine if this is the right solution, you should know the advantages and disadvantages.
• Advantages: the points program is easy to understand and it also avoids price
discounts. There are some customers who acquire many points but are not necessarily using them.
• Disadvantages: in this program, there is a point expiration. This may discourage customers especially if it has a short time frame expiration.
Subscription program
In this type of program, the customers are required to pay monthly or annually to join the VIP member club. To determine if this is the right loyalty program, you should know the advantages and disadvantages:
• Advantages: this program offers more value to customers because of the strong
benefits. When you consider this, your business will make upfront money. More importantly, customer spending will be higher.
• Disadvantages: for first-time customers, they are not likely to consider this program. They will eventually join after a few purchases. Additionally, the initial payment or the program’s monthly subscription can be a barrier for new customers.
Punch cards
This is a loyalty program that will provide the customers with “punches” after purchasing certain products or services. To determine if this is the right program for your business, you should know the advantages and disadvantages:
• Advantages: this is easy for the customer to comprehend. As a business, this program
costs low because you just need to print the cards and hand them out. You can also generate a digital version of the cards.
• Disadvantages: this program will not allow you to capture information about your customers. It can also be difficult to monitor or track because there will be customers who will ask for more stamps.
Conclusion
It is not a secret that loyalty programs like Brand Bucks are considered effective marketing tools. With the right mix of loyalty programs, it can increase the growth of your business. It can also help you retain customers and more importantly, it can improve brand reputation thereby attracting new customers.