When it comes to the loyalty program, there are multiple factors which are there and one needs to analyze all of them to find whether they truly work or not. One of the core providers of customer loyalty programs is the credit card companies and they know how to hook their customers in using credit cards.
The banks that provide such cards allow the customer to receive offers from multiple services, which encourages the person to use the item and further creates a loyalty base for the customers.
For example, banks and credit card companies use the DSA partner to get the first customer, but to enhance the customer’s needs further, they create offers and other such activities that increase the customer’s loyalty.
In this blog, we will learn about core loyalty programs and how they benefit companies in various industries by attracting return customers.
The Need for Investing in Loyalty Programs
The love for loyalty programs allows the brands and the customers to both take advantage of certain areas. For example, a loyalty program helps a brand to get repeat customers, and for them, it’s the benefits of this loyalty program that make a person use those things continuously.
One of the core competencies of brands that run the correct loyalty program is that it can reduce the cost of acquiring new customers and increase the business’s revenue through the right upscale programs.
Understanding the Different Types of Loyalty Programs
There are different types of loyalty programs that a brand can adopt to make their customers loyal.
Point-Based Customer Loyalty Program
There is a point-based customer loyalty program where, on each transaction, a person gets certain points, and those points get transferred into rewards. In the Indian context, Kotak Mahindra Bank uses this concept to reward customers on their credit cards.
The critical concept that one needs to understand in these scenarios is that a customer can redeem the points that they are accumulating and can use them to get rewards or discounts on their next purchase.
A Tier-Based Spending Habits for Customers
The next is the tier-based scoring and rewarding system. Here, a company creates a certain threshold, and for that, different gift zones or rewards get unlocked. A company can set three tiers, and in each of those tiers, there are certain types of rewards.
For example, after spending a certain amount in a month, one can reach a particular tier, and there, they can get the benefits. However, there is a constant desire for a customer that is curated where they want to explore the next set of rewards, which are present in the second tier.
A Mission-Driven Approach in Customer Loyalty Program
The next is the mission-driven approach, where a customer is using a product and is not only getting accompanied by the product; rather, they are creating more loyalty through a cause that one needs to promote.
It’s through the use of this mission-driven approach where the funds one gets accumulated in a non-profit organization, the person’s donation gets recognized, and the customer gets the recognition for their act.
- Loyalty Programs Based on Annual or Monthly Expenditure
There is another form of loyalty program and that is based on the spending of a person. A person who is spending more in a year can get a concession at the end and some reward where they can access the e free hotel visits or can plan for a vacation where the credit card loyalty programs cover the flight fares.
Cashback Offers For Every Purchase or Merchant Transaction
Cashback offers are some of the old and traditional ways to hold customers and make them use the company’s product multiple times. For example, financial institutions like credit card companies and banks use this cashback approach which rewards the customers for making a transaction or doing a bill payment.
One can take the help of the app for DSA and can find a guide who can suggest the best credit cards that will solve the purpose and need of that person.
These are some of the most preferable ways through which brands run customer loyalty programs.