8 types of loyalty programs explained

Loyalty program types explained

In a world filled with endless options and ever-evolving consumer choices, businesses are constantly striving to connect with customers and build strong relationships. One tried-and-true way to achieve this is through loyalty programs.

With a variety of loyalty program types available, it can be overwhelming to decide which one is best suited for your business. You could choose one type or create a unique blend of multiple types. Let’s dive into the world of loyalty program types to find the perfect fit for your brand.

1. Earn & Burn Loyalty Programs

Earn & Burn is the most common type of loyalty progam. Customers earn points or rewards based on their purchases or activities, and they can later redeem these for discounts, products, or services. These programs provide a clear incentive for customers to return and continue spending with a brand.

2. Tiered Loyalty Programs

Tiered loyalty programs add an element of gamification by categorizing customers into different tiers or levels based on their loyalty and engagement. As customers progress through these tiers, they unlock increasingly valuable rewards and perks. Adding tier levels to your loyalty program effectively encourages customers to strive for higher status and remain loyal to the brand.

3. Value-based Loyalty Programs

A value-based loyalty program is a rewards system constructed upon a business’s core values and principles. These programs are strategically crafted to foster a more profound emotional bond between the business and its customers by emphasizing common values and shared beliefs. See Eneco’s eco-loyalty program for inspiration.

4. Coalition Loyalty Programs

Coalition loyalty programs involve multiple businesses or brands coming together to create a shared loyalty program. Customers can earn and redeem rewards across all participating brands, increasing the program’s attractiveness and convenience.

5. Ambassador & Referral Programs

Ambassador and referral programs turn loyal customers into brand advocates. These programs reward customers for referring new customers or for promoting the brand on social media. Typically, advocates receive discounts, free products, or exclusive access in exchange for their efforts.

6. Partner Rewards Loyalty Programs

Partner rewards programs involve collaborating with other businesses to offer mutual benefits to customers. Customers can earn rewards or discounts with one brand by engaging with partners. For instance, an airline might partner with a hotel chain, allowing customers to earn airline miles while staying at partner hotels.

7. Gamified loyalty programs

A gamified loyalty program leverages challenges and gaming mechanics to boost engagement and reinforce customer retention. These programs are crafted to provide entertainment and delight to customers, often integrating elements such as badges, leaderboards, contests, and progress tracking. Check out these loyalty gamification ideas for inspiration.

8. Custom-designed Loyalty Programs

Custom-designed loyalty programs are tailored to a specific brand’s unique needs and customer base. These programs are highly flexible and can incorporate elements from various loyalty program types to create a personalized approach. Behind every successful custom loyalty program is a flexible loyalty soution that lets you to offer any combination that you like.

Find a loyalty program type to suit your brand

As you can see, there is a wide range of options to choose from when creating a loyalty program. But you don’t have to commit to one type. With m–wise Loyalty Cloud, you can choose any combination of features for a loyalty program that aligns seamlessly with your brand identity and business goals.