What are Customer Loyalty Program Examples?
Customer loyalty programs are an important tool for generating long-term customer loyalty. It is more than just rewarding customers with points that can be later exchanged for merchandise, but more of a long-term strategy to reward customers for their loyalty. This is a way to develop a strong, loyal customer base.
Customer Loyalty Program Examples Categorized by Program Types
Customer Loyalty Program Examples + Types
Chances are, you've heard of customer loyalty programs, and have wondered which one would work for your restaurant business. A customer loyalty program is a marketing strategy that generates brand loyalty on behalf of customers. Companies that have a loyal customer base have an edge in a highly competitive market. These programs incentivize customers to come back to a store or restaurant by rewarding them for their loyalty with a variety of perks. Perks can include anything from a free drink to a discounted item to merchandise to a free promotional item.
Restaurants can either use punch cards, loyalty program apps, loyalty program software on a POS, or other types of programs. It all depends on the size of the restaurant, customer needs, and budgetary constraints.
Loyalty programs optimize product awareness and increase customer retention, which improves profit margins. Here are 6 different types of loyalty programs that you can implement at your restaurant.
1. Point Programs
Everyone has probably signed up for a point program at some point or another. Most commonly used in restaurants and by retailers, point programs allow customers to earn points for every dollar they spend. Points can translate into dollars, discounts, free items, or preferential treatment.
For example, Starbucks allows customers with 25 points to customize their drinks. 50 points will earn you a free hot coffee or bakery item. 400 points allow customers to either get a fresh bag of ground coffee or any other in-store merchandise. Each restaurant creates a unique point-earning structure that works for them and their customers' needs.
You can implement a point program on a software solution or loyalty app. Customers can then check their points at any time, and receive email notifications of any upcoming deals or promotions. The benefit of point programs is that they are addictive. Customers love to check their points and see them add up over time so they can receive their free or discounted items.
Must-Know Stats on Loyalty Programs:
Loyalty programs are a great way to reward your customers for their loyalty.
It’s not always easy to come up with new ideas and ways to reward your customers for their loyalty.
2. Tiered Programs
While most restaurants stick with the points program, they may also combine it with a tiered program. Tiered programs strike a great balance between achievable and preferable incentives. They reward customers for their first purchase but encourage them to make more purchases to earn better deals. There are certain levels that customers can reach, which are also called levels of loyalty.
Points are separated into different categories, and customers earn various items based on which category they reach. Starbucks is an example of a point program and tiered program. Each level of points leads to new and more expensive free or discounted items. This type of program structure incentivizes customers to keep spending so they reach that next level of loyalty.
3. Value-Based Programs
Most restaurants seek to create a loyalty program that aligns with customers' needs and demands. It is an effective marketing ploy to generate brand ambassadors or customers who tell their friends and family about the great product they found. The best part is that you don't need to pay these brand ambassadors to market your product-they pay you! But, how do you create brand ambassadors in the first place?
Many restaurants and retailers implement a value-based program as their solution. This type of program is similar to a point system, which purchases equal money that can be spent on the business. However, the restaurant takes a portion of that money and donates it to a specific cause. This cause is usually something the target audience can relate to and sympathize with.
For example, a vegan restaurant may donate a portion of their loyalty program earnings to an animal rights organization. It's important to note that the cause must align with consumer needs for it to work. If implemented properly, a value-based program can increase brand loyalty and help generate brand ambassadors who bring in more business.
4. Partnered Programs
Partnering with another business may be a risk worth taking when it comes to your reward program. Retailers have pounced on partnerships for years. They know what type of items the target audience prefers, and capitalize on that to increase profit and build brand awareness. In doing so, they generate something called a partnered program.
A partnered program is where customers can use some of their loyalty points towards another business. For example, a chain restaurant may partner with an airline to allow customers to earn free miles every time they make a purchase. Partner programs can increase brand exposure for both brands and increase the customer base. Restaurants should do their research to find out what their target audience is looking for, and what brands would have crossover appeal. This will improve the likelihood that the partnered program is a success.
Must-Know Stats on Partnerships:
As a business owner, you want to ensure that your customers are happy and loyal.
Your customers may not be aware of all the ways they can earn loyalty points or rewards.
5. Game Program
Who doesn't like to play games? Even grownups love to download game apps to their phones and play during a lunch break. Games are addicting, fun, and competitive. So, why shouldn't you gamify your loyalty program to encourage higher usage and increase customer retention? With record-high mobile phone usage, this is a unique opportunity for restaurants to reach new and younger audiences.
Examples may include rewards progress bars, which are visual cues telling customers how far they have until they receive the next reward or tier level. Humans are much more likely to pay attention to visuals as opposed to text, so bar charts or graphs may be a great option. Restaurants could offer Social Media-related points or points earned for engaging with the brand on a social platform. For every re-share or like, customers may receive a certain level of points. Including interactive promotions, missions, or VIP tier charts are other effective ways to gamify your loyalty program and enhance the Company Culture.
6. Hybrid Loyalty Program
Most restaurants and retailers use a hybrid loyalty program without even realizing it. A hybrid loyalty program incorporates various elements of game programs, partnered programs, value-based programs, tiered programs, and points programs into one single loyalty program. The more, the better, right? Not so fast. While hybrid programs are key for increasing retention and engagement, too many features can be overkill.
Restaurants should focus on creating the best Loyalty Program that aligns with customer needs and business requirements. If this includes elements of various types of loyalty programs, that's fine. But owners should not seek to overwhelm the customer with too many features. The overarching goal is to increase Loyal Customers' spending and brand loyalty. At the same time, the loyalty program should make sense and align with the restaurant's brand.