Why Brand Loyalty Programs Work and How to Build Yours

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Why Brand Loyalty Programs Work and How to Build Yours

Brand | Jan 16, 2023

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Brand loyalty programs are popular with many businesses these days. There’s a reason for that. It’s because they work! Of course, every business is different and will need to design its program to fit its needs, but it’s certainly a strategy worth exploring, especially if you’re a smaller business and word of mouth is important.

What’s a Brand Loyalty Program?

A brand loyalty program is a marketing strategy designed to target the eCommerce side of the business. Through loyalty programs for small businesses, customers who frequently shop at your establishment, either local or online, are rewarded for being loyal, returning customers. It’s done as a way to incentivize and motivate them to keep coming back for more.

A brand loyalty program can include perks such as early access to sales and offers, VIP events, member discounts, etc. This can be done through many different ways––a point-keeping reward system, membership cards, and vouchers.

The value and importance of brand loyalty programs cannot be understated. It not only increases sales and revenue but also shows the customer how important they are to your business.

Moreover, the data collected through these loyalty programs can help fine-tune your marketing strategy in the future. And most importantly, especially for small, local businesses, loyalty programs incentivize customers to spread the word to their friends as well. Word of mouth can make a huge difference in the success of a small business.

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Types of Loyalty Programs for Small Businesses

There are a few different types of loyalty programs you can experiment with. What makes a loyalty program successful is tailoring it to fit your business and customer wants and needs.

Point-Based Programs

Point-based programs are by far the most common and simplest brand loyalty programs used these days.

The working theory behind them is simple––the more you buy, the more points you get. Each product on the website has a certain number of allotted points, depending on the value of the product. These points get accumulated with purchases, and can then be redeemed to buy other products. Sephora has a similar point-based loyalty program, with customers getting 1 point for each dollar spent.

Spend-Based Programs

A spend-based loyalty program is exceptionally simple and easy to understand for customers. The more you spend, the more loyalty credit you get. This credit can then be used for more purchases from the brand, in the form of discounts and vouchers.

For example, the Shell Go+ loyalty program is one of the best spend-based loyalty programs, where customers get a fuel discount after every 10 visits, and a 10% discount on Shell food ranges and other items, like hot drinks.

Partnered Programs

Partnered loyalty programs are a great way to boost business for two or more brands in one go. From the customer's POV, they get more options and a variety of things to purchase. The Kroger and Ralphs partnership loyalty program is a great example of this type of brand loyalty program.

customer rentation

Is a Loyalty Marketing Program Right for Your Business?

In almost all cases, a loyalty program for small businesses can be beneficial. Bigger businesses can benefit as well, but it’s really the smaller businesses that often see the most rewards from a marketing strategy like this.

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