• by Ryan Kite-Hedges , October 8, 2024

Loyalty programs are so pervasive today, it’s estimated that 90% of brands provide one. Brands tout rewards and access for purchases, with points as the most frequent digital currency. This value exchange creates a transactional feeling to what should be a relationship building attachment between customer and brand.

Points have a place and purpose, mainly as a method to track reward potential. Brands mirrored each other with different twists on point values and rewards, but all using the same transactional behavior.

Loyalty doesn’t need to feel transactional, while still making it easy for customers to understand how their purchases are fueling rewards and benefits. Here are some additional methods for consideration to build better creation of value that build a relationship with your customers.

Frequency plays within loyalty work best for high-traffic businesses. Imagine a program where the visit with purchase drives benefits, instead of the total dollar amount spent. This behavior shows the customer that brands value their business over their expenditure, helping drive the customer’s decision to pick this brand over another. Brands can add additional texture to frequency-based programs with unlockable benefits if customers visit a certain number of times per month or year.

Product-specific programs reward the user based on targeted product purchases. You see this frequently in large retailers that offer bonus gift cards for purchasing a certain volume during that visit. This style of program can work with points or specific rewards tied to the customer’s favorites or chosen items the retailer wants to incentivize. It is important to balance brand-pushed incentives with what customer’s most frequently want to, and do, purchase.

Always-on programs can be the hardest to pull off, but also the most rewarding of all models. Imagine a program that benefits the customer just for being an ongoing customer. Once customers make a purchase, they’ve achieved entry to a suite of benefits or rewards. The criteria for maintaining access can be based on frequency or total spent. The nature of the always-on benefits makes up for the transaction requirements, given the program benefits the customer indefinitely.

Surprise & delight is the simplest, and often can be the most fun type of loyalty program.These programs work on surprising and delighting customer based on a purchase. The customer won’t know they are receiving a bonus in their shipment or a free meal when they order online. But the surprise nature of the gift creates a stronger sentiment toward the brand, and a desire to try to be delighted again and again.

Partnership exchange programs are when brands give customers benefits outside of their own brand that are complementary or specifically beneficial to the customer base. These work particularly well with brands that want to reward purchase, even infrequent purchases, by adding value to those purchases. Think of a free partner gift when spending over a certain amount, or ongoing discounts to a partner brand that is in an adjacent space of the brand.

All these programs keep customer behavior top of mind, while avoiding the trap of pushing alternative currencies that can have declining value over time. Customers want to know a simple way to benefit from their loyalty.