Businesses thrive better by keeping existing customers than by chasing new ones. In a competition-driven business world like ours, ensuring customers stay loyal to your venture is important. Customer loyalty, however, does not happen by luck. You need intentional strategies to achieve it. One of the ways to keep customers loyal to your brand is through the customer reward program.

Successful business people understand the need to keep their customers and, thus, invest in the best loyalty programs. If you run or work at a business, you must integrate customer rewards into your business programs. Such reward programs help your business attract customers and make them loyal to your brand or your business.

For a better perspective, let us consider the meaning of customer loyalty. Customer loyalty refers to a customer’s preference for a particular company’s product over its competitors. A loyal customer will hardly settle for any other company’s product. In some cases, the price or the availability of the product may not deter him. He develops such an attachment to the product that he would not mind paying more or waiting longer.

However, the power to make a customer loyal lies in how effectively a company can manage its customer rewards programs. Let us now see the definition of customer rewards programs.

Meaning of Customer Reward Program

A customer reward program is a loyalty points system that maximizes customer engagement by rewarding customer purchases with discounts and other special offers. In other words, customer rewards programs help customers decide to stick with you some more since you rewarded them for having stuck with you for so long.

Such a program helps facilitate customer loyalty by offering them added value for their purchases. The customer believes he is gaining more (which he is), but essentially, the business venture is increasing its revenue and growing its referral base.


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Benefits of a Customer Reward Program

  • Increase in customer retention
  • Increase in business revenue
  • Means of brand advertisement
  • Improves customer experience
  • Better Marketing Results

Increase in Customer Retention

As earlier noted, a strategic reward points system is a source of encouragement to customers. Thus, they easily remain with your brand if you have an effective customer reward program. Since customer reward schemes offer extra value to them, it encourages them to keep patronizing the brand.

Increase in Business Revenue

People new to entrepreneurship may consider customer rewards programs extravagant. This is understandable, seeing as such rewards look like extra costs. However, a properly executed customer reward program can multiply the sales and revenue of a business.

When creating customer rewards, you must consider the current revenue strength of your company. In other words, do the math. See how much profit the reward program can bring you, especially in the long run. Also, find out if your loyalty points system will not drastically affect the cash flow needed for the short-term operations of the company. You shouldn't make an offer if your company didn’t last long enough to enjoy its benefits.

Means of Brand Advertisement

Customers are the most effective ambassadors of your business. First, a friend tells his friend, who tells two other friends about your business. Those two others tell five others. Keep up with that, and you will soon have a large base of brand evangelists for your business. A good customer reward program naturally creates brand advocates out of customers. Customers who get additional value after a good purchase would want to share their stories with others.

Hence, loyalty points programs improve your referral system. It advertises the company’s product through happy customers who would want their friends to partake in the reward scheme.

Improves Customer Experience

Customer experience is how a customer feels about a brand, based on the brand's services from the pre-sale to the post-sale stage. A customer reward program is one of the most efficient ways of creating a better customer experience for your purchasers. On the one hand, customer rewards are a side attraction. They compel customers to buy from you. On the other hand, getting a reward for a purchase creates satisfaction in customers. More so if the customer reward program is executed with great customer service.

Customer reward programs and customer service are like Siamese twins. For your customer reward program to be effective, you must intentionally create efficient customer service.

Better Marketing Results

Have you ever purchased a product because you saw they were offering a juicy discount? That's how it works. When you include customer rewards in your online marketing strategy, it attracts potential customers and increases their chances of patronizing your business.

Let us now look at how to execute good customer rewards programs.

Types of Customer Reward Programs

There are various kinds of customer reward programs. You can employ one or more of the following systems for your business.

  • Point-Based
  • Spend-based
  • Value-based
  • Paid
  • Tiered
  • Game
  • Partnered
  • Hybrid


Image taken from Strikingly User

  • Point-Based

Customers are awarded points for each purchase they make from your business. When they have stacked their points up to a substantial amount, they can redeem them for discount prices or other incentives.

  • Spend-Based

Spend-based loyalty programs are built on a system where customers get rewarded with money for spending a particular amount. It is simple to implement and cost-effective.

  • Value-Based

In a value-based program, customers earn rewards for purchasing items or meeting a set target. Value-based help build the seller-buyer relationship stronger.

  • Paid

Also known as a premium loyalty program, the paid customer reward program involves rewarding customers by offering them special perks after paying a monthly or annual fee.


Image taken from Strikingly user

  • Tiered

In a tiered program, customers are divided into different levels based on their engagement rate. Rewards vary based on customer performance.

  • Game

Game loyalty programs involve providing online gaming offers to customers and rewarding them. It creates both fun and stronger company-customer relationships.

  • Partnered

In a partnered reward program, two or more companies go into a partnership based on mutual value to provide a reward system for their customers and strengthen their relationship.

  • Hybrid

In a hybrid program, a company simply combines more than one reward program to create a more thrilling experience for customers.

How To Create a Customer Reward Program

While creating a customer rewards program is not difficult, it will require creativity and strategy. Not all customer reward programs are suitable for all business types. You must therefore decide on a strategy that suits your venture.

Some of the ways of creating loyalty reward programs include:

  • Giving discounts or cash back
  • Offering freebies to regular customers
  • Rewarding referrals with gifts
  • Hosting appreciation events
  • Offering premium membership programs

Giving Discounts Or Cash Back

This is one of the most typical means of creating customer loyalty. You can offer discounts or cash back to customers for buying a product frequently, in bulk, or just meeting a purchashold. It motivates them to purchase more.

Offering freebies to Regular Customers

Another way to build customer loyalty is by rewarding regular customers with free products. It will motivate them to purchase more. Your freebie does not have to be expensive. A small but useful product will do. As a plus, offer relevant or complimentary freebies to your product. Say you sell clothes. You can offer a pair of shoes as your freebie. The idea is that the customer buys more clothes so they can have a shoe to go with them.

Rewarding Referrals with Gifts

Referrals are one short-cut way to multiply your business customer base. How does it work? Customers who get others to buy from you get rewards. You can do this by creating unique referral links or codes for each customer. The customer gets a reward when a new person signs up or buys something through that link or code. You can also use a ‘create a coupon’ feature. If a customer gets a new person to purchase with their coupon code, they get free points or some other reward.

Speaking of coupon codes, did you know that Strikingly has a coupon code that gives you 11% off an upgrade to a Pro account? Of course, you get all the extra features that come with a Strikingly pro account. The good thing is this code is available to everyone. Check it out right here.


Image taken from Strikingly product

Hosting Appreciation Events

The best loyalty programs include customer appreciation events. This type of incentive will work wonders if you run a service-based and exclusive product. Again, it does not have to be elaborate. It can be an exclusive dinner with top members of your business, or a fan fair. When dealing with many customers, you may decide to hold the event online. Just make sure it is memorable.

Offering Premium Membership Programs

Keep your customers loyal by creating a premium membership cadre. Offer them free membership of this premium level after reaching a certain target. It creates a sense of exclusivity.

In conclusion, building customer loyalty requires creative strategies. One of the most potent ways of ensuring customer loyalty is through a customer reward program. By providing customer rewards in the form of discounts, cash-back, gifts, and freebies, you encourage your customers to stay with your brand.

One of the ways to showcase your loyalty systems is on your website. A Strikingly website allows you to display your coupon code, just like we did with ours. It also lets you integrate your customized discount links on your eCommerce store so that the discounts automatically apply when customers use them. Pick any of these online store templates and start building a website for free.