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Importance of Customer Loyalty And Types of Programs

Customer Service

Customer loyalty has become increasingly imperative as customers are extremely important to the growth of any business, even faster than the company’s sales and marketing teams. Experts advise that all businesses should aspire for customer loyalty by virtue of their existence. Studies have revealed that customers tend to convert and spend more time and money with the brands they are loyal to as they often drive referral traffic and word-of-mouth marketing, telling their friends and colleagues about such brands.

Customer loyalty also helps to foster a strong sense of trust between brands and their customers, serving as a drive to turn customers into brand advocates to recruit new ones.

How To Keep The Loyalty of Customers


Customer loyalty programs can sometimes appear to be only a scheme to get customers to spend more money. However, brands that have been as generous as their customers have leveraged their open-handedness to get more sales, showing customers their importance to the business. 


The importance of showing gratitude cannot be overemphasized, as customers often appreciate being celebrated, including through handwritten notes or direct, one-to-one messages.

Community of Customers

Customers tend to trust their peers more than the business. Consequently, building a useful community for customers will encourage customer-to-customer interactions and retain their loyalty.

Types of Customer Loyalty Programs

A customer loyalty program is an incentive that companies provide to their most frequent customers to encourage loyalty and long-term business. Over the years, several types of customer loyalty programs have been developed as highlighted as follows:

Point-Based Loyalty Program

This is the commonest loyalty program methodology, designed to allow frequent customers to earn points that can be converted to discount code, freebie, or any other type of special offer.

Tiered Loyalty Program

The tiered system loyalty program is particularly suitable for businesses trying to find a balance between attainable and desirable rewards, as it is designed to reward initial loyalty and encourage more purchases. The system works by presenting relatively small rewards as a base offering for being a part of the program, with repeat customers encouraged through increased value of the rewards as they rise through the loyalty ladder

Paid (VIP) Loyalty Program 

Loyalty programs are designed to reduce the complexities between customers and business. Consequently, it will not be out of place to charge fees for such programs. The structure of the fees is usually dependent on the goal of the business with the program.

Value-Based Loyalty Program

It is important for business to understand their customers and target audience. This often requires identifying the values and desires of customers, ultimately guiding the process of designing a loyalty program that will enhance the experience.

While practically any company can offer promotional coupons and discount codes, some have achieved more in resonating with their target audience by offering value in ways that do not directly relate to money, ultimately building a unique connection with customers and fostering trust and loyalty.

Coalition (Partnership) Loyalty Program

Otherwise known as coalition programs, this type of program involves going into a strategic partnership for customer loyalty to retain existing customers and attract new ones. 

The parties in the partnership is often dependent on the profile of the target audience, including their everyday lives, needs, and purchase processes. However, businesses are advised to go beyond the ordinary by partnering with brands that offer complementary solutions, showing the customers that they can provide relevant values beyond their traditional products or services. 

Game-Based Loyalty Program

So who doesn’t cherish having a good game? Businesses are beginning to leverage people’s love for games to improve their brand presence by designing game-based loyalty programs. Consequently, more businesses are creating contests and sweepstakes that allow them to earn rewards by participating in relatively easy missions. 

Loyalty programs have been around for ages and thanks to their effectiveness as a marketing tool, more brands have continued to come up with several innovative strategies. 

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