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Tips to reap maximum benefits from Loyalty Programs

In the e-commerce and online retail world, the proliferation of brands has led to a scattering of users. With abundant options available, consumers are likely to show loyalty to those brands that provide them with personalised benefits and rewards points. Therefore, Loyalty Programs have emerged as a powerful tool for both businesses and consumers alike because, in the retail marketing toolkit, 84% of the consumers stick to a brand that offers a loyalty program. And, 66% of the consumers strive to earn rewards based on their brand switching pattern and spending habits (source: Shopify).

It’s true that, in the online shopping landscape, the competition among brands is fierce wherein, a few gigantic players like Westside, Shoppers Stop, Ajio, and Tata Neu have each developed their loyalty programs, enticing customers with promises of enhanced shopping experiences and savings.

Owing to this, loyalty programs are proving to be one of the most effective and powerful strategies for increasing consumer loyalty and revenue. Let’s delve deeper into understanding what loyalty programs are and how to use them to maximise the consumer benefit.

What are loyalty programs

Loyalty programs, also called rewards programs, are marketing strategies meant to retain consumers and hold their interest towards their brands via discounts, cashback, BOGO offers, incentives, exclusive deals and many other interesting points or rewards for continued patronage.

Such programs play a crucial role in building a brand image and a fruitful relationship with consumers as they give brands a better understanding of users’ choices and predictive purchases that they can make. For example, once Akshita Khanna, 27, Delhi, made an online purchase from a

Westside store on her birthday. Though she often purchases from physical outlets, since it was her birthday, WestStyleClub from Westside gave her 20% off. Akshita already made a purchase of Rs 7,200 where she got 20% off and now she has become a loyal member of WestStyleClub.

Loyalty program types Points-based loyalty programs:

This is the most common type of loyalty program that enables consumers to accumulate reward points that can be redeemed for perks and cashback. Ashna Gupta, a frequent shopper, shared her shopping experience expressing that, “I am a Platinum member of Shoppers Stop of First Citizen Club Membership. This membership provides me 6 reward points on every 200 spent with an extended exchange period of 60 days among other things.” It is important to keep a tab on your points so that they don’t expire.

Tiered loyalty programs:

This is a membership-type program where brands segregate consumers into different groups and rank them based on their engagement with the brand. Keeping a track is important to ensure that you don’t lose the tier benefits and are not degraded.

Paid loyalty programs:

This is also called a fee-based loyalty program where consumers have to pay recurring or one-time participation fees. For example, registration on Amazon Prime or other relatable services. Choose your plan after evaluating the hidden value in different plans offered.

Value-based loyalty programs:

This involves some percentage of donation to charity, welfare programs or NGOs. This doesn’t reward consumers but creates a special recall with them that aligns with their values. Just ensure that your money is going to the right people by doing your research.

Maximising techniques Coupon Advertising:

Luring consumers with exciting coupons is a common practice in the digitised shopping arena. Keep a track on the coupons that your fave brand is giving away to get maximum benefit. This works for food delivery brands like Swiggy and Zomato as well.

Retargeting:

Targeting the existing consumers again and over a certain period boosts brand sales. Retargeted consumers are offered specific deals and discounts that encourage them to complete the previous pending actions. From consumer point of view, it is a good idea to keep cart full for some time before buying. This will gain you more discounts when you are retargeted.

Automation & recommendation:

Automation and recommendation automatically showcase offerings to consumers that they want to see and explore.

By implementing the abovementioned strategies, brands can effectively maximise their loyalty programs, enabling end customers to enjoy their rewards and purchases.

The consumers can use these programs for their own benefit as well by keeping a track of their points and tiers in varied loyalty programs. Maximise your returns by using these small tips.