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Secret Ingredients to Customer Loyalty Marketing

customer loyalty marketing

Acquiring a loyal customer base is the dream of every business. A loyal customer base helps bring in more customers through word-of-mouth marketing, increased conversions, and a higher ROI. A loyal customer base is also essential for establishing your business as a trusted brand. Retaining the existing customers and establishing a long-term relationship with them is the objective of customer loyalty marketing. Loyalty marketing has been existing for years and many businesses have reaped its benefits. In this digital era, loyalty marketing has become ever more prevalent and businesses are coming up with innovative loyalty marketing programs. It is because retaining existing customers is much easier than finding new customers and it also generates more revenue. Online platforms such as social media and eCommerce websites and applications have opened up new avenues for customer loyalty marketing, making it an important aspect of digital marketing.

Customers love to choose a brand that seems loyal to them and provide generous offers that genuinely benefit them. Many research has shown that loyal customers tend to spend more on every repeated purchase and recommend the brand to others. On the other hand, a customer loyalty program, if not implemented correctly, can backfire. It might be taken as a cheap tactic to make more money out of the customer’s pocket. So, creating a customer loyalty program that is for the sake of the customer is vital. Your customers chose you over many others who are competing for their attention. Saying “thank you” by rewarding customers and reminding them that they are special to you is the key to successful loyalty programs. Building online forums for customers on social media and review sites can help you create deeper customer relationships. You will get real-time reviews and will be able to rectify your mistakes and improve your services. In short, you have to be loyal to your customers first and earn their loyalty in return. 

Although loyalty programs have been existing for decades, these have to be reimagined for the digital space, where there is cutthroat competition for customer’s attention and customers have hundreds of other options to choose from. There are many loyalty marketing strategies that are widely used in modern digital marketing strategies now.


Commonly used loyalty marketing strategies are:


Point-Based programs are one of the most common loyalty marketing tactics and are used by small and large businesses alike.  Every time a customer makes a purchase, you award them a certain number of points equal to a certain amount of money. They can use these points in subsequent purchases. It is used to encourage regular and frequent purchases. Flipkart gold coins, Dunkin Doughnuts Perk Rewards, etc., have successful point-based loyalty programs.


Tiered loyalty programs have a loyalty and reward ladder in which the most loyal customers get the highest rewards. It involves providing an initial reward when customers join your program and encouraging them to make regular purchases and spend more to get better rewards. Hyatt has a very famous tiered loyalty program with different levels like discoverist, explorist, and globalist.


Paid loyalty programs are often used by large enterprises that provide multiple services. Customers have to pay a fee at the time of joining and at timely intervals to enjoy the benefits which are not available to unpaid users. Club Mahindra’s color-coded membership loyalty program based on seasons and vacations is a great example of successful paid loyalty programs in India.


Value-based loyalty programs involve providing customers something that your target audience values than money, discounts, and cash-backs. Businesses have to get creative and find out the interests of their customers to develop a unique value-based loyalty program. Social missions related to conservation, environment, and education can be part of a value-based loyalty program.


Coalition loyalty programs are done by multi-brand partnerships in which the brands involved help each other grow together with strategic programs. Payback is an example of multi-brand coalition programs.

There are many examples of highly successful loyalty programs from which you can draw inspiration when creating a customer loyalty marketing tactic for your business. Let us look at some of the enterprises that have earned a large customer base and revenue through unique customer loyalty marketing strategies.


Some of well-Known Brands that utilize Loyalty Marketing strategies.


Amazon has one of the most successful paid customer loyalty programs. Customers can pay a small amount of money for a Prime membership of Amazon and enjoy several exclusive benefits and perks. Customers can sign up for a membership on a monthly or yearly basis. They also get a one-month free trial for the annual subscription plan. There are many reasons that this loyalty program is so successful. Firstly, it is affordable to most people. Secondly, the benefits that come with it are too attractive to ignore for people who use Amazon services regularly. It includes free and fast delivery, prime video and music subscription, special sales, discounts, gaming, and kindle subscription that are not available to non-prime customers unless they pay for it separately. Amazon’s variety of services allows it to provide a loyalty program package like this. Prime members shop from Amazon more often than other customers making the loyalty program a huge success.


Starbucks reward is one of the most popular loyalty marketing programs in the world. With its own mobile app and easy online sign-up option, Starbucks has created a customer base with its star reward program.  Every time a customer makes a purchase, they earn stars, and, with other complimentary timely offers, Starbucks keeps their customers happy. One reason for its success is the massive scale of the Starbucks network, as you are sure to find a Starbucks shop in every city.


Times Network has a number of online and offline publications and ventures. Every time a person does an action on any of Time’s digital resources such as reading, commenting, or watching videos, they earn points which can be converted to deals and discounts of many brands.


To Sum Up

Creative and innovative customer loyalty programs can help your business grow as a brand online with the help of your loyal customer base. Cashbacks, discounts, coupons, membership, and special sales are all part of loyalty programs. The different types of loyalty programs can be tailored according to the needs of your business and what customers are looking for. You can choose a hybrid model like most businesses with tried and tested loyalty programs. With the right customer loyalty marketing strategies, you can speed up your online growth and increase ROI. It will also help in attracting new customers. Loyalty programs work on faith, trust, and customer experience. Businesses have to make sure that every time a customer takes your service, you are loyal to them.

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(Head of Digital Marketing)

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