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What Is a Customer Loyalty Program? Definition and Examples

What Is a Customer Loyalty Program? Definition and Examples

By Jessica Jacob
04 / 06 / 2022

Is customer loyalty program truly a key for a successful marketing strategy? 

If you've tried various ways to retain customers, and yet are still faced with a “meh” result time and time again, maybe you need to pay attention to a known method made special for loyal customers, a customer loyalty program.

Studies have found that acquiring a new customer is at least six times more expensive than maintaining an existing customer. As we all know, the level of satisfaction and customer loyalty is one of the keys to success in developing a company. Without customers, the company automatically does not receive income. This, of course, can result in the company not being able to survive in the long term.

What Is a Customer Loyalty Program? Definition and Examples

For this reason, the loyalty program is a growing priority for businesses. 

Marketers' usage of customer loyalty program platforms is expected to rise by 80% in the next two years, according to the fifth annual "State of Marketing" study report. 63% of high-performing marketers are currently using loyalty program platforms, according to the survey.

Discounts aren't the only benefit of customer loyalty programs. They give clients timely and appropriate offers based on their purchase history and data provided by the customer, and they improve the overall customer experience. By developing unique alliances with similar firms, companies may expand their consumer base and provide even more enticing benefits.

So, what is a loyalty program? How to apply it to customers? Get the full answer by reading the article about the loyalty program below.

What is a customer loyalty program?

A customer loyalty program, by definition, is a marketing strategy that acknowledges and compensates consumers who buy or transact with a company on a regular basis. Companies can provide points or benefits to consumers who spend a certain amount of money, promoting them to a higher degree of loyalty. Customers who get these extra incentives and privileges are more likely to become regular customers or perfectionists - brand evangelists. Free stuff, presents, discounts, or internal benefits like early access to new products are all possible rewards.

Companies may be hesitant to give free add-ons, but it's a technique that doesn't have to be expensive. However, according to psychologist Norbert Schwarz, paying as little as ten cents might establish a reciprocal bond between two individuals.

What is a customer loyalty program?

According to studies, clients that participate in customer loyalty programs spend up to 18% more than other customers.

Delivering a modest product or service with a purchase is a terrific approach to reinforce your consumers' recent purchasing decisions. Everybody enjoys getting something for nothing. And for every dollar spent on customer loyalty programs, a corporation is sure to gain a slew of rewards. On the other hand, when customers quit your firm, their revenue stream will be lost forever.

Research also says that 95% of customers feel that trusting a firm boosts their loyalty. Furthermore, according to studies, 91% of customers think that their confidence in a firm encourages them to buy more regularly.

Also read: What is Customer Retention? Try These 7 Tips To Boost Yours!

How Loyalty Programs Benefit Your Business

You should start paying serious priority to customers loyalty programs if you haven't applied them yet. It can provide you with a lot of benefits that you can hardly get from another marketing strategy.

Here are some of the benefits of implementing a loyalty program for business:

1. Build Relationships with Customers

One of the biggest benefits of the loyalty program it implements is building close relationships with customers. By implementing a loyalty program, you can provide more satisfaction to your customers. This indirectly provokes positive emotions in customers for the products or services you provide.

2. Differs you from Competitors

In this day and age, every company seems to have to be smarter in making its business look different from its competitors.

Why? Because business competition will be getting tighter as time goes by. You automatically won't be able to win it if you can't make a big difference.

For this reason, it is very important to create a loyalty program for your customers so that they can differentiate you from your other business competitors

If the program you design looks more attractive, then your customers are more likely to want to buy your product again than any other product.

3. Creating Customer Advocacy

If you are able to offer an attractive loyalty program, it is likely that your customers will be happy to recommend your business brand to people around them, such as family, friends, relatives, and business partners.

This will automatically build what we call customer advocacy. This activity is commonly known as a marketing advocacy strategy.

Your customers will be happy to introduce your company brand. Surely this will provide many benefits for you. Why? Because you no longer need to spend money to build brand awareness.

4. Better Customer Retention

Today, customers make purchasing decisions not just on price, but on shared value, interaction, and overall experience with your brand.

5. Cost Efficient

It is more cost effective for your company to maintain customer satisfaction than to constantly have to acquire new customers.

6. User Generated Content

Programs that encourage happy customers to post reviews and ratings on websites and social media creates true brand ambassadors for your brand.

Examples of Customer Loyalty Program

Examples of Customer Loyalty Program

1. Membership

In this method, a business can offer customers a sense of community by asking them to join as members. If customers are interested and register for this program, they can join and prepare to become members of the created club membership.

They will later be pleased since they will receive several perks as a result of their membership. Discounts, exclusive member promotions, or exclusive member services are some of the perks you may provide them.

2. Limited events

Another example is a limited event program. This limited event program will be offered either privately or publicly by the business.

This restricted event program can, however, be provided subsequently to other or particular events, or at the conclusion of the event year, for the general category.

In this instance, the business may provide huge benefits to its loyal clients, such as large discounts.

3. Partnership

The next method you can apply in conducting a loyalty program is to create a partnership.

In this program, each client will benefit in the form of an opportunity to become a partner or business partner within the company. In addition, customers will also benefit from special pricing offers.

The partnerships that are offered to clients and often implemented by many brands are in the form of software. Customers who have an important and famous influence in cyberspace can participate in the promotion of the company's products.

Since the customer has helped the brand in promoting the product, the customer will also have the right to get the product for free and some gifts are given according to the agreement that is agreed together.

Also read: Five-Step Approach To Maintain Your Business Reputation

How To Build Loyalty At Every Stage Of The Customer Journey

So, how should your business build a better customer loyalty strategy?

Customer loyalty is a valuable commodity. If a competitor makes a better offer, your customers will accept it—even if they have a positive history with your brand. According to the second annual State of the Connected Customer Report, 57% of customers stopped buying from the company because competitors provided a better experience.

Companies must build credibility through personal customer interactions that remember what happened before between the customer and the organization. It is also a good idea to offer added value to customers, by inviting them to participate in product-related online forums.

However, having a well-designed customer loyalty program enhances the customer's relationship with their brand. Of course, bringing up a feature or two at the point of sale can be what drives a customer to buy.

Gradually, however, businesses hope to build momentum as customers join—with the goal of strengthening relationships that will last a lifetime. Typically, this means you'll be giving your customers an ongoing opportunity to maximize their loyalty rewards. You can also offer them intelligent, targeted communications that celebrate their “milestones” with the brand, as well as their individual needs and preferences.

A New Focus On Customer Experience

The role of the marketing department changes as the loyalty program becomes the network that drives the customer experience. Marketers used to be responsible for placing products, crafting messages, creating ads, and posting on social media. But many are now turning to customer journey management and retention already with the brand.

If the future of marketing lies in a drastic change where marketing is the bridge builder across multiple experiences - from first touch, to sales support and customer service - it is important to create a common vision for the customer across an organization's business units. Marketers are increasingly tracking customer data, backed by rapidly developing capabilities like artificial intelligence that help them extract and understand ideas.

Today, for example, about six out of 10 marketing teams track customer satisfaction and retention. According to the State of Marketing report, the average marketing organization currently uses 14 data sources, a number that is growing by about 20% each year.

Additionally, a dedicated customer loyalty platform provides a way for businesses to manage the customer experience beyond the point of purchase. This software can help companies track important metrics such as response rate and retention rates. This allows them to evaluate the performance of loyalty programs, and see how customers feel about the company as a whole.

Also read: Customer Experience, Key for Successful Business

Make Your Customer Loyalty Program Easier With OneTalk by

After reading the customer loyalty program, how it benefits your business, and all about the customer loyalty program, it’s time to put your knowledge to use. There is no better time than now to make your own customer loyalty program.

Messages and other forms of communication with customers is the best way to put this customer loyalty program to use. Send special discount messages, promos, and other limited privileges for your customer loyalty program. 

How can OneTalk help you? With OneTalk by, a trusted omnichannel messaging solution, you can do this easily to multiple customers in multiple channels. Broadcast Messages is a feature with various advantages. Not only can you send multiple messages at once with this feature, you can also send them to a segmented receiver with Contact Segments. While at it, you can schedule your messages and send multiple messages in various types–such as sending texts with images or videos.

Contact OneTalk by now and prove how loyalty programs can change your business for the better.

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