A loyalty program is designed to change customer behaviours. A well-designed programme should drive customer growth, motivate customer retention and inspire customer acquisition. Personalising the programme to the audience will build their emotional connection with the business. Traditionally, loyalty programmes include a mixture of hard benefits (rewards and discounts) and soft benefits (service benefits, VIP rewards) that reward the customer for their purchases. The program will usually be closely integrated with the brand identity and culture as well so that the program is consistent with the wider customer experience.
Customer loyalty is the result of multiple positive experiences with the brand that build up trust over time. It’s about building a relationship with the customer so that they are connected, valued and understood by the business.
Loyalty continues to bring positive outcomes for brands and the impact on advocacy, retention, and spend remains strong. The 2020 study by Bond found that 72% of customers are more likely to recommend a brand with a good loyalty programme, 78% of customers are more likely to keep doing business with a brand with a good loyalty programme and 64% of customers modify their spend to maximise point earnings.
The vast majority of British people are members of loyalty programmes and are fans of them too:
- 75% are current members of programmes
- 73% think loyalty programmes are a great way for brands and businesses to reward customers
- 52% think all brands should offer a loyalty programme