{"id":19789,"date":"2021-12-09T00:00:00","date_gmt":"2021-12-09T08:00:00","guid":{"rendered":"https:\/\/www.helpshift.com\/glossary-term\/loyalty-program\/"},"modified":"2023-11-02T12:27:59","modified_gmt":"2023-11-02T19:27:59","slug":"loyalty-program","status":"publish","type":"glossary","link":"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/","title":{"rendered":"Loyalty Program"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/#Whats_the_Point_of_a_Loyalty_Program\" title=\"What\u2019s the Point of a Loyalty Program?\">What\u2019s the Point of a Loyalty Program?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/#Why_Are_Loyalty_Programs_Important\" title=\"Why Are Loyalty Programs Important?\">Why Are Loyalty Programs Important?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/#How_Do_Loyalty_Programs_Work\" title=\"How Do Loyalty Programs Work?\">How Do Loyalty Programs Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/#Types_of_Loyalty_Programs\" title=\"Types of Loyalty Programs\">Types of Loyalty Programs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/#Loyalty_Program_Rewards_and_Incentives\" title=\"Loyalty Program Rewards and Incentives\">Loyalty Program Rewards and Incentives<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/#How_Does_Helpshift_Support_Customer_Loyalty\" title=\"How Does Helpshift Support Customer Loyalty?\">How Does Helpshift Support Customer Loyalty?<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.helpshift.com\/glossary\/loyalty-program\/#Related_Resources\" title=\"Related Resources:\">Related Resources:<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<p>Loyalty programs are a great way to build customer engagement, encourage repeat purchases, and access a treasure trove of customer data.&nbsp;<\/p>\n\n\n\n<p>What is a loyalty program? It\u2019s a way to attract new customers and maintain existing customers by offering perks and rewards for their continued business. In one form or another, loyalty programs have been around for hundreds of years, whether it&#8217;s the old-time shopkeeper giving a big customer a special rate or an airline handing out discounts to frequent flyers. Today\u2019s loyalty programs can encompass everything from digital sales to purchases made with partnering companies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Whats_the_Point_of_a_Loyalty_Program\"><\/span>What\u2019s the Point of a Loyalty Program?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Chances are good that you\u2019d make sales without a loyalty program. Why go through the extra work?<\/p>\n\n\n\n<ul><li>Loyalty programs encourage repeat purchases. In turn, this increases the <a href=\"https:\/\/www.helpshift.com\/glossary\/lifetime-value\/\">customer lifetime value<\/a> (the amount of profit per customer over a set period of time). And because keeping current customers is cheaper than recruiting new ones, it can be more cost-effective, too.&nbsp;&nbsp;<\/li><li>Loyalty programs provide lots of customer data. Think about a grocery store loyalty card. When you use it, the grocer can not only see what you buy each week, they can also see what items are bought together, when things are purchased, and what triggers a purchase (e.g. coupon, discount). Add that to demographic info (if you provided it during the signup process) and that\u2019s a lot of information to be mined.<\/li><li>Customers like loyalty programs. They add an element of fun and excitement to an otherwise routine transaction. They can also promote feelings of \u2018belonging to the club\u2019 and a sense that the company appreciates that customer\u2019s business. Finally, they may also encourage communication between the brand and its audience; when customers feel heard and valued, they\u2019re more likely to become <a href=\"https:\/\/www.helpshift.com\/glossary\/brand-advocacy\/\">brand ambassadors<\/a>.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Are_Loyalty_Programs_Important\"><\/span>Why Are Loyalty Programs Important?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As you can see, loyalty programs have an important place in your customer retention and revenue-building strategies. But to be successful, it\u2019s important to recognize which loyalty program type is right for your customers and for your company. It\u2019s also important to understand how the different reward types work. If you make the right choices, you\u2019ll see just how profitable loyalty programs can be.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Do_Loyalty_Programs_Work\"><\/span>How Do Loyalty Programs Work?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Most loyalty programs can be broken down into just a few categories. And many programs will have elements of more than one category; for example, you can have a spending-based program that uses <a href=\"https:\/\/www.helpshift.com\/glossary\/gamification\/\">gamification<\/a> to motivate customers. Also, programs can use one or more kinds of incentives to keep customers\u2019 interest.<\/p>\n\n\n\n<p>As you\u2019ll see, most loyalty programs combine multiple elements from both lists. That\u2019s what makes them unique to the company and appealing to the members.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Loyalty_Programs\"><\/span>Types of Loyalty Programs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Most loyalty programs either fit into one of these categories or take elements from several categories:<\/p>\n\n\n\n<ul><li>Points\/spending. Whether they directly track dollars spent or award points per purchase or transaction, most retailer loyalty programs include some kind of spending element. Examples: Delta SkyMiles, Starbucks.<\/li><li>Levels. This can include using points\/spends to move up to different levels with better rewards. Examples: Starbucks Gold Star members, DSW.<\/li><li>Subscription\/membership. Although this isn\u2019t directly a loyalty program, it functions like one: customers are more likely to spend money if they already have \u2018invested\u2019 in a monthly or yearly amount that guarantees special perks like fast shipping. Examples: Amazon Prime, Peacock streaming service (paid members get access to more shows).<\/li><li>Referral. Customers who get a friend to use the service get a discount or cash back. Examples: PayPal, Vitacost.<\/li><li>Gamification. Here, elements of gameplay (like earning stars, moving up levels, or unlocking more rewards) are incorporated into the loyalty program. This is most often used in combination with other program types, but it can also be used on its own. Examples: McDonald\u2019s Monopoly sweepstakes,&nbsp; Starbucks (yes, again).<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Loyalty_Program_Rewards_and_Incentives\"><\/span>Loyalty Program Rewards and Incentives<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Of course, the whole point of loyalty programs (from a customer\u2019s perspective) are the perks. Some common choices include:<\/p>\n\n\n\n<ul><li>Freebies. Customers are given a free gift for signing up or a choice of gifts for reaching certain milestones. Example: Hilton Honors members get points to use on in-room upgrades, free stays, and free food and beverages.<\/li><li>Discounts. Customers get a percentage or dollar amount off certain items or their total bill. They may also receive special prices for various items or services. Example: World Market posts members-only deals on various wines.<\/li><li>Gifts. Members receive special gifts or discounts on their birthday or the anniversary of their loyalty program membership. Example: Anthropology AnthroPerks.<\/li><li>Community. Members get access to a loyalty club forum or membership site. Example: Sephora\u2019s Beauty Insider.<\/li><li>Cashback. Cash is given directly to customers, added to their account, or taken off their bill. Example: Discover credit cards.<\/li><\/ul>\n\n\n\n<p>It\u2019s probably quite clear why some of these features and perks will work better for some businesses than others. The key point is to <strong>focus on the customer<\/strong> and what will appeal to them,<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Does_Helpshift_Support_Customer_Loyalty\"><\/span>How Does Helpshift Support Customer Loyalty?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The best loyalty program can\u2019t overcome poor customer service. Good customer service creates stronger relationships, which adds to customer satisfaction and loyalty. Helpshift supports customer loyalty and retention through more effective customer service (thanks to <a href=\"https:\/\/www.helpshift.com\/glossary\/automated-customer-service\/\">automated customer service <\/a>and <a href=\"https:\/\/www.helpshift.com\/products\/chat-conversational-help\/\">chatbots<\/a>). Both customer service and loyalty programs provide a link to individual customers, which can encourage honest feedback and optimized decision-making.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_Resources\"><\/span>Related Resources:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Blog: <a href=\"https:\/\/www.helpshift.com\/glossary\/customer-engagement\/\">What Is Customer Engagement?<\/a><\/p>\n\n\n\n<p>Blog: <a href=\"https:\/\/www.helpshift.com\/glossary\/what-is-customer-satisfaction\/\">What is Customer Satisfaction?<\/a><\/p>\n\n\n\n<p>Blog: <a href=\"https:\/\/www.helpshift.com\/glossary\/feedback-loop\/\">What is a Feedback Loop?<\/a><\/p>\n","protected":false},"author":8,"featured_media":0,"template":"","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"Uncategorized"}]},"featured_image_src_large":false,"author_info":{"display_name":"Erik Ashby","author_link":"https:\/\/www.helpshift.com\/author\/erikhelpshift-com\/"},"comment_info":"","_links":{"self":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary\/19789"}],"collection":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/users\/8"}],"version-history":[{"count":1,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary\/19789\/revisions"}],"predecessor-version":[{"id":26344,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/glossary\/19789\/revisions\/26344"}],"wp:attachment":[{"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/media?parent=19789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.helpshift.com\/wp-json\/wp\/v2\/categories?post=19789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}