{"id":2843,"date":"2020-04-08T16:58:26","date_gmt":"2020-04-08T20:58:26","guid":{"rendered":"https:\/\/referralrock.com\/hub\/?page_id=2843"},"modified":"2024-03-12T00:19:04","modified_gmt":"2024-03-12T04:19:04","slug":"types-of-loyalty-programs","status":"publish","type":"post","link":"https:\/\/referralrock.com\/blog\/types-of-loyalty-programs\/","title":{"rendered":"8 Types of Loyalty Programs: Which Is Right for You?"},"content":{"rendered":"

Loyalty programs\u00a0are one of the best ways to motivate customers to keep buying from you.\u00a0As you\u2019ve probably seen, there are many types of loyalty programs your business can choose from. Choosing the right type of loyalty program to motivate your customers is key to offering them the most value.<\/p>\n

But which type will best fit your business and keep the focus on your customers? A cash back program? A points program? Or something else?<\/p>\n

Let\u2019s dive into the most common types of loyalty programs, so you can find the one best for your company. We break down best practices for each type of loyalty program, as well as the pros and cons of each.<\/p>\n

1. Points system<\/h2>\n

Best for:<\/strong>\u00a0New businesses and simple purchases. Points systems work well for most business types, as long as your customers purchase from you frequently.<\/p>\n

Points programs are the most common loyalty rewards programs<\/a> by far \u2013 and the first kind of loyalty program to ever spring up.<\/p>\n

In a points system loyalty program, customers earn points for performing brand-building actions. Usually, these programs reward customers for making purchases, but many also reward behaviors such as social media sharing and reviewing products. Once they\u2019ve accumulated enough points, customers can redeem their points for an incentive.<\/p>\n

Points system best practices<\/h3>\n

If you create a points system, you\u2019ll want to make sure it\u2019s simple to understand. Outline all the ways your customers can earn points, and list how many points are needed to earn each available reward. Most experts recommend\u00a0a $1 spent = 1 point structure, as it\u2019s the easiest to keep track of. However, any points-earning structure based on each $1 spent (ex. $1 = 10 points) works well.<\/p>\n

Stay away from confusing structures, like \u201cYou get 20 points for every $15 and spending $500 earns you a free makeup kit.\u201d This makes things harder for your customers and makes them a lot less likely to believe your program is worth joining.<\/p>\n

Customers love choice, so offering a rewards menu, where customers choose what they\u2019ll spend their points on, is a solid loyalty program best practice<\/a>.<\/p>\n

Also, make sure rewards feel attainable, to keep customers motivated. Think about offering several rewards of multiple values: lower-value ones for less points and more enticing ones for more points. This also gives customers a choice of how to spend points.<\/p>\n

\"dunkin<\/p>\n

Dunkin\u2019s DD Perks<\/a><\/em> program awards 5 points for every $1 spent<\/em><\/p>\n

Pros and cons of points programs<\/h3>\n\n\n\n\n
Pros <\/strong><\/td>\nCons<\/strong><\/td>\n<\/tr>\n
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    \n
  • Free sign-up and low barrier to join<\/li>\n
  • Easily accessible for customers<\/li>\n
  • Low risk for your business<\/li>\n<\/ul>\n<\/td>\n
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