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<Img
img="/uploads/programmy_loyalnosti_ad78c49ba6.png"
alt="Exploring Loyalty Program Options: Examples & Cases"
/> 


75% of customers choose companies that [**offer them bonuses**](https://www.zippia.com/advice/customer-loyalty-statistics/#:~:text=Customer%20Loyalty%20Statistics%20by%20Consumer%20Opinions&text=56%25%20of%20customers%20will%20stay,for%20a%20better%20loyalty%20program.). Additionally, 43% of the audience spends more money on brands to which they are loyal. Therefore, developing a loyalty program is a crucial aspect of marketing in various businesses. Retailers, marketplaces, cafes, restaurants, airlines, online services, and more build relationships with their audience through bonuses and other privileges.


Discounts, points accumulation, and cashback are offered to customers to motivate them to stay with the brand longer and make repeat purchases. A well-designed loyalty program also involves personalized offers, increasing the chances of conversion. 
In this article, we will discuss the various types of customer loyalty programs and provide examples from well-known brands.
## What is a loyalty program


Loyalty programs are a set of marketing methods designed to retain brand customers and motivate repeat purchases. They are used to build strong relationships with the audience, attract new customers, increase conversion rates, and average transaction value.


A well-developed loyalty system is also necessary for [**personalizing offers**](https://altcraft.com/glossary/personalization-what-it-is-and-why-personalized-marketing-matters) to customers. This approach sets the company apart from competitors, especially if the program is unique and easy to understand.


The development of a marketing strategy should include customer loyalty programs as a crucial element. These programs strengthen the brand, cultivate a fan base, and create repeat customers. To join the bonus system, individuals need to register by providing their last name, first name, phone number, email, date of birth, and so on. Participants are issued a physical or virtual card.


## Types of loyalty programs


The essence of [**a loyalty program**](https://altcraft.com/blog/customer-loyalty-program) is to provide significant benefits to the customer. This is accomplished through various methods that depend on the business's objectives and capabilities.


What types of customer loyalty programs exist:


<Table>
| Type | Description |
| ------ | ------ |
| Discount programs | The customer receives a card with a fixed or cumulative discount. |
| Points-based programs | After a purchase, the user gains the opportunity to accumulate points (bonuses). The mechanics vary; often, one bonus equals one unit of currency, but there can be other combinations. Additionally, the brand determines the percentage of the total bill that can be paid using these accumulated points. |
| Cashback programs | Returning a portion of the money from a purchase back to the customer. Brands provide cashback to the user's account, which can be used for other purchases within the same company. In the case of banks, cashback can be used for any goods and services. |
| Promo codes | The customer receives a promo code via email after fulfilling the loyalty program's conditions. Typically, this requires spending a specific amount or making a repeat purchase within a designated timeframe. |
| Tiered programs | The more a customer purchases, the higher their status becomes. Each new level represents an increase in discount, new privileges, and so forth. |
| Partner programs | Several brands create joint loyalty programs. For instance, bonuses are accumulated in the online store of Company A but can be spent at the cafes of Company B. There's also an umbrella program where services under one brand are unified into a single loyalty system. |
</Table>




[**Loyalty enhancement programs**](https://altcraft.com/en/features/loyalty-programs) are categorized as either closed or open. To join an open bonus system, one simply needs to register and provide their information. For a closed system, a condition must be fulfilled, such as being invited by a current member or making a payment (either a one-time purchase of a loyalty card or a monthly fee). In return for this, individuals are granted additional benefits, like access to exclusive sales, free shipping, and more.


## Loyalty programs: examples from brands

### Alaska Airlines: Mileage Plan


Alaska Airlines' loyalty program, known as Mileage Plan, is a well-regarded program in the airline industry. It offers travelers a range of benefits and rewards, including earning miles based on the distance flown rather than just the ticket price. This unique approach allows passengers to accumulate miles more efficiently, leading to various perks such as free flights, seat upgrades, and access to partner airline services. Mileage Plan's partnership with a diverse array of airlines and businesses expands its attractiveness, making it a compelling option for frequent flyers seeking value and flexibility.




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### Uber Rewards

Uber Rewards is Uber's loyalty program designed to provide added value to its frequent riders. By accumulating points through eligible rides and Uber Eats orders, users can unlock different membership tiers – Blue, Gold, Platinum, and Diamond – each offering escalating benefits such as priority support, flexible cancellations, and even price protection on certain routes. This program aims to foster customer loyalty and incentivize riders to continue using Uber's services, while also enhancing the overall user experience through exclusive perks and rewards.


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### Expedia Rewards

Expedia Rewards is a loyalty program tailored for travelers who frequently use Expedia for booking flights, hotels, and other travel services. With each booking, members earn points that can be redeemed for discounts on future travel reservations or other eligible purchases. The program offers three membership tiers – Blue, Silver, and Gold – each with escalating benefits like access to exclusive deals, bonus points, and potentially even free upgrades. Expedia Rewards aims to enhance customer engagement and encourage repeat bookings by offering tangible rewards and personalized travel experiences.



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### Ben & Jerry’s: Flavor Fanatics

The Flavor Fanatics reward program by Ben & Jerry's is designed to delight ice cream enthusiasts and foster brand loyalty. This program allows customers to earn points for every purchase, which can then be redeemed for free scoops, merchandise, or even exclusive event invitations. By catering to their customers' love for their products, Ben & Jerry's creates a sense of community and engagement, encouraging fans to not only enjoy their ice cream but also participate in a rewarding experience that goes beyond the treat itself.

<Img
img="/uploads/image4_879ac3681e.png"
alt="Flavor Fanatics reward program by Ben & Jerry's"
/>

### The North Face: XPLR Pass


The North Face's XPLR Pass is a loyalty program tailored for outdoor enthusiasts. By signing up for XPLR Pass, customers gain access to a variety of benefits such as exclusive discounts, early product releases, and invitations to special events. The program emphasizes engagement with the brand's outdoor ethos, encouraging members to participate in challenges and activities to earn points that can be redeemed for rewards. XPLR Pass not only fosters customer loyalty but also aligns with The North Face's adventurous spirit, creating a strong sense of community among outdoor enthusiasts.


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### Designer Shoe Warehouse: DSW VIP

DSW VIP is Designer Shoe Warehouse's loyalty program designed to cater to shoe and fashion enthusiasts. Members of the DSW VIP program enjoy various benefits such as earning points with every purchase, receiving birthday rewards, and gaining access to exclusive sales and events. The tiered structure of the program allows members to progress from Gold to Elite status, unlocking increasing levels of perks and rewards. By offering a personalized shopping experience and attractive incentives, DSW VIP encourages customer loyalty and keeps shoe lovers engaged with the brand.


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### The Body Shop: Love Your Body Club

The Love Your Body Club by The Body Shop is a loyalty program tailored for skincare and beauty lovers. Members of the Love Your Body Club enjoy numerous benefits, including earning points with every purchase, receiving a birthday gift, and gaining access to exclusive promotions and events. The program's focus on ethical and sustainable practices aligns with The Body Shop's brand values, resonating with conscious consumers. By offering rewards that align with their commitment to cruelty-free and environmentally-friendly products, the Love Your Body Club fosters brand loyalty while also encouraging positive shopping choices.




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### Hugo Boss Experience

Hugo Boss Experience is a loyalty program crafted for fashion enthusiasts who appreciate the brand's high-quality offerings. Members of the program receive exclusive benefits such as personalized styling advice, early access to collections, and invitations to VIP events. The program's emphasis on providing a tailored and elevated shopping experience resonates with Hugo Boss's premium image. By offering unique perks that cater to their discerning customers, the Hugo Boss Experience program aims to strengthen customer loyalty and maintain a strong connection with their fashion-savvy audience.




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### Lancôme Elite Rewards

Lancôme Elite Rewards is a loyalty program designed to engage beauty enthusiasts who value luxury skincare and cosmetics. Members of the program are treated to a range of exclusive benefits, including earning points on purchases, receiving personalized beauty consultations, and gaining access to limited edition products. The program's focus on personalized skincare advice and premium rewards aligns with Lancôme's commitment to enhancing their customers' beauty routines. By offering tailored experiences and coveted rewards, Lancôme Elite Rewards aims to foster brand loyalty and provide an elevated beauty shopping experience.




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### IKEA Family

IKEA Family is a loyalty program tailored for home and furnishing enthusiasts who frequent IKEA stores. Members of the IKEA Family program enjoy a variety of benefits, including special discounts, product offers, and even free coffee during store visits. The program's emphasis on providing value and savings aligns with IKEA's affordability and practicality-focused brand image. By offering perks that resonate with their target audience, the IKEA Family program aims to build customer loyalty and enhance the overall shopping experience for those seeking stylish yet budget-friendly home solutions.


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## Summary


Loyalty programs are a set of marketing tools that retain customers, motivate repeat purchases, and establish ongoing communication with [**the target audience**](https://altcraft.com/glossary/target-audience-why-to-define-it-how-to-classify-and-segment-it). Within the context of loyalty systems, users are granted bonuses, cashback, provided with consistent or temporary discounts, and sent promotional codes. Customers use these benefits for new orders from the brand or at other locations as stipulated by the program, while the company collaborates with partners.


Brand loyalty systems can be either open (available to all and free) or closed, where entry is possible only through payment or upon fulfilling certain conditions.


Loyalty programs are marketing strategies for encouraging repeat purchases by offering discounts, rewards, and exclusive perks based on customer engagement.

image15.png

Discover how businesses are weaving a tapestry of rewards and discounts to keep clients coming back for more. Unveil the strategies behind building lasting connections with brands.

Exploring Loyalty Program Options: Examples & Cases

Exploring Loyalty Program Options: Captivating Cases

<Img
img="/uploads/image3_e1a68879d7.png"
alt="RFM Analysis: What It Is and How to Do It"
/>

There are two main ways to work with customers: attracting new ones and communicating with existing ones, motivating them to make repeat purchases. The second option is cheaper, but it is important to understand how to communicate with the customer base to generate more revenue.

This is where RFM analysis comes in. It evaluates users based on the sum, frequency, and recency of purchases. As a result, marketers can understand which category of customers to make individual offers to, which customers to show additional products to, and which customers to reactivate. This simple method is used to find the most profitable customers and those who are at risk.

In this article, we will look at what RFM analysis is, its advantages and disadvantages, how to conduct it manually and with the help of technical tools.

## What is RFM analysis and why to manage it


RFM analysis is a [**customer segmentation technique**](https://altcraft.com/blog/how-and-why-to-segment-target-audience) based on their purchasing behavior. The goal is to identify the most valuable customers who bring the company the most revenue. Typically these are loyal customers. 

The database is divided into three categories based on:

- **Recency:** the time since the last purchase. Different products may have different recency thresholds. For example, if a customer last bought your brand of shampoo six months ago, it is significant because shampoo is a consumable product. However, buying winter tires for a car one year ago is not considered an old purchase because tires are typically used for more than one season.
<p>


- **Frequency:** how often a customer makes purchases.
<p>


- **Monetary value:** how much a customer spends on the company's products.


RFM analysis is reuired to develop an action plan and communication strategy for each user category.


RFM is compared to the Pareto principle, where 20% of efforts give 80% of results: loyal customers bring in more money than new and casual customers, although marketing budget is also spent on them. Therefore, customer analysis is important for cleaning up the database and redistributing resources to avoid wasting efforts.


Additionally, RFM segmentation is useful for planning future advertising campaigns, specifically for:


- personalizing offers;
<p>


- reminding customers about a new purchase if the previous one was a long time ago;
<p>


- presenting [**additional products**](https://altcraft.com/blog/what-is-cross-selling) when a customer orders at a low price point.


This way, the company spends less on increasing its customer base, as the existing audience is profitable.


## Pros and Cons of RFM Analysis

### Pros:


- **Opportunity to gather data for predicting customer behavior.** If you know that a group of customers makes purchases every 2-3 weeks with a low average check, you can remind them of a new purchase when the time comes.
<p>


- **RFM analysis is a helper for personalization.** If a customer does not make high-check purchases, there is no need to offer them expensive products.
<p>

- **Savings in marketing budget.** Attracting and warming up new leads is expensive, while working with existing ones reduces costs.
<p>

- **Selection of an audience for advertising campaigns.** Based on historical RFM data, marketers can predict which offers a customer will respond to and which ones they will ignore. If a user only chooses luxury segment goods, showing them advertising of a low-cost product is not effective.
<p>

- **Easy analysis, which does not require special efforts and skills.** Only time is needed for data collection and processing, if you do segmentation manually. RFM [**automation**](https://altcraft.com/en) tools make the process faster.

### Cons:


- **RFM analysis of the customer database does not take into account the context of purchases (such as seasonality) and customer characteristics (such as demographics).** Such data is also important for offering products.
<p>


- **RFM segmentation will not bring results when there is a small amount of initial data.** The database for analysis should be at least ten thousand people.
<p>

- **It is not suitable for companies that sell large and expensive products.** For example, real estate is usually purchased once or twice in a lifetime, so customers are unlikely to return for a new apartment after a year.
<p>

- **Data has to be updated and the analysis repeated, as customers can move from one segment to another.** The standard period is once every six months, but if there are rapid changes in sales, it is worth doing it once every two months.

## How to do RFM analysis

### Step 1. Collect the database


Data can be accumulated in *Excel*, *Google Sheets*, or marketing management systems. The database for analysis should contain customer names, contacts, information on frequency, recency, and the amount of all purchases made by that person.

### Step 2. Indicate the scale for segmentation


Each of the three RFM criteria is ranked on a scale from 1 to 3 (a standard variant). Before the analysis, a description for the ratings should be made. An example is given in the table.

<Table>
|Criterion | Description of the scale |
| ------ | ------ |
| Recency | 1 – the client made a purchase long time ago; 2 – average recency; 3 – a recent purchase |
| Frequency | 1 – buys seldom; 2 – average frequency of purchases; 3 – buys often |
| Monetary value | 1 – insignificant amount of money; 2 – average amount; 3 – expensive purchases |
</Table>


Sometimes criteria can be further detailed. For example, for the description "the client made a purchase a long time ago", it is convenient to add a specific time frame, such as "1-2 years since the last purchase", and so on for the others.


The scale from 1 to 3 is considered standard, but it can be expanded to 10. However, this will increase the number of segments, and such an RFM analysis will take more time.


### Step 3. Evaluate each customer by RFM


This is the most time-consuming step if the analysis is done manually. Using the chosen scale, assign scores to each user based on recency, frequency and monetary value.


As a result, each customer receives a three-digit score. For example, a customer with an RFM score of 221 has made purchases relatively recently, occasionally returns to make purchases, but spends very little.


*Here’s an example of the table for evaluation.*


<Table>
| Client | R | F | M | Specification |
| ------ | ------ | ------ | ------ | ------ |
| Client A | 1 | 1 | 2 | A customer who buys seldom and with long intervals between orders. Brings an average amount of money. |
| Client B | 2 | 2 | 1 | This customer purchases with average frequency and without particularly long gaps. They only choose inexpensive items. |
| Client C | 3 | 3 | 3 | It’s the most profitable customer who makes high-cost purchases frequently and with a short time lapse between them. |
| Client D | 1 | 3 | 2 | They haven't made purchases in a while, although previously ordered frequently with a decent average order value. |
</Table>


### Step 4. Divide segments into groups


With a scale of 1 to 3, there can be 27 segments. Similar ones should be combined into a single one to simplify the work.


Possible groups of customers:


- **Most profitable.** They buy a lot and often, are loyal and with a sufficient LTV. The highest score in the category is 333.
<p>


- **Regular customers with average performance.** They do not always buy often and a lot, but they are loyal to the brand and still come back. The highest score in the category is 222.
<p>


- **Risk group.** People who bought only once or order very rarely and spend little. The most unprofitable customer will receive a score of 111.


### Step 5. Make a decision


After evaluating and classifying customers, marketers decide which approach to take for each group.


For example, the most profitable customers can be offered exclusive loyalty conditions (333, 332, and so on). An activation email campaign can be sent to users who haven't made a purchase for a long time (111, 112, and others). For regular customers with a small average purchase amount (such as 321), additional products and conditions can be selected [**to encourage them to buy more**](https://altcraft.com/blog/5-marketing-techniques-to-push-customers-to-buy).


## RFM-analysis in Altcraft Platform


[**Altcraft Platform**](https://altcraft.com/en) is a platform that automates RFM analysis and collects data on the context of purchases. The tool collects information on the frequency, recency and monetary value of orders, as well as on the activity of customers across different channels (SMS, email, push notifications, and others). Additional data on the opening of promotional mailings, actions in applications and on websites, and participation in [**loyalty programs**](https://altcraft.com/blog/customer-loyalty-program) will indicate what led the customer to make a purchase and what hindered it.


The purchase amount for analysis is tracked on external resources: websites, social networks, applications, CRM. Altcraft Platform pixels record the completion of goals (for example, making a purchase at a certain value), which are configured inside the platform. The monetary value selection condition for the RFM analysis scale is also set here: total goal value is less than/greater than/equal to a certain value N.


<Img
img="/uploads/image2_0f67217d32.png"
alt="Configuring based on monetary value criterion"
src="Configuring based on monetary value criterion"
/>

The frequency of actions and the duration between them are tracked. To do this, goal completion parameters are set. For example, purchases that occurred at least once within twenty days are taken into account in the analysis.

<Img
img="/uploads/image4_78130f29ff.png"
alt="Configuring based on frequency of action"
src="Configuring based on frequency of action"
/>


Next, segments are created based on the data. Customers are assigned to a particular segment based on the following criteria:


- whether the user currently meets the selection criteria now or met the criteria in the past;
<p>


- how many times during a period the customer met the specified criteria.



<Img
img="/uploads/image1_1914462a72.png"
alt="Configuring the segments"
src="Configuring the segments"
/>


## Conclusion


RFM analysis is used to evaluate customers based on recency, frequency, and monetary value. The most profitable customers are selected from the database and offered exclusive deals, while special promotions are offered to less important customers to increase their average order value. Passive customers are usually reactivated.


The main advantages of RFM analysis are increased revenue from existing customers and cost savings in marketing budgets (it's cheaper to work with existing customers than to attract new ones). However, this method is suitable for companies with a sufficiently large customer base and those whose customers make regular purchases.


Customers are evaluated on a scale from 1 to 3, where 1 is the worst score and 3 is a high score. The resulting segments are then divided into groups: the most profitable customers, less important customers, and the risk group. A strategy is developed for each group.


The analysis can be done manually (using *Excel* or *Google Sheets*) or through marketing automation tools (such as Altcraft Platform), which speed up and simplify RFM segmentation.


The main advantages of RFM analysis are increased revenue from existing customers and cost savings in marketing budgets.

image3.png

Discovering ways to better know your customers for efficient work with them?

RFM Analysis: What It Is and How to Manage It Correctly

RFM Analysis: What It Is and How to Manage It

<Img
img="/uploads/Promo_Codes_A_Timeless_Marketing_Method_Guaranteed_to_Work_cc0724e308.jpg"
alt="Promo Codes"
/>

Promo codes give you a little money off at checkout, and they are an excellent way to promote new products or get customers to come back to shop in the future. They're also a great way to run a special promotion on social media. For example, you can offer 50% off your product using the code YEAHBUY50.

## What are promo codes?

Promo codes, also known as discount codes or coupons, are combinations of letters and numbers that customers have to input on your website or in the mobile app to redeem the discount that was offered. They can be obtained from either a [**third party**](/en) or directly from your own system. Promotional codes help you in three ways: 

1. generate more traffic to your website; 
2. increase conversion rate;
3. track marketing efforts.

Promotion generally leads to [**higher conversion rates**](conversion-funnel-stages-and-optimization). This is mainly because the customer has been promised the discount to enter their information into your site or click on a unique link provided by you. The discount is promised to fill up certain information, which leads to better conversion rates than the standard sales process.

## How do Promo Codes Work in Marketing

Here are some ways that promo codes can help you promote and sell your products:

- **Get customers**: Promotional codes are a great way to get new customers into your e-commerce store. You can offer free shipping on orders over a certain amount, set up a discount for a limited period (like 20% off), or give away other discounts (like $10 off with three purchases within a month).

<Img
img="/uploads/free_shipping_f8a9410b00.gif"
alt="Promo code to get customers"
/>

- **Build links**: Promo codes can also be used as part of link-building campaigns, mainly when used in conjunction with [**affiliate programs**](affiliate-marketing-for-beginners). When someone clicks through from an external link and signs up for your newsletter, they'll often receive a free gift (often at no cost) as part of their welcome package.

<Img
img="/uploads/aliexpress_coupon_453cd6f923.png"
alt="Promo code to build links"
/>

- **Reward loyalty**: Promo codes can be used as bonuses or incentives that people choose to use themselves. If your business has products that people might want to purchase but doesn't know about, you can create special promo codes and use them to entice people.

<Img
img="/uploads/fiverr_learn_promo_code_01c01ede12.png"
alt="Promo code to reward loyalty"
/>

## How to use Promotional Codes for Business?

Everyone likes discounts, so the whole point of using a coupon is to lower the price for your customers.

There's no formula for using a good promo code. You have to come up with something that makes sense for your business's specific circumstances. Here are some things to keep in mind.

How many items will be discounted? If your order total is $60, you might only need one promo code. If it's going to be $200 or more, though, you'll need at least three codes. That way, even if one fails to work, there will still be enough for everyone who orders.

What's the total cost of the order? You can use promo codes on individual items, but they're most effective when used on larger orders that include multiple products and shipping fees. That way, you can offer discounts across the board and make sure every customer pays less than they would otherwise.

<Img
img="/uploads/promotional_code_stats_6e3df86f2d.jpg"
alt="Promo code stats"
/>

## Where to Use Them?

Promo codes are not just for big companies to earn extra revenue. They can be a powerful tool for small businesses to promote their products or services. They also serve as an excellent way for customers to find something unique that they might not find elsewhere.

Promo codes are often a good choice when looking to promote your products or services [**through social media**](self-marketing-how-to-promote-yourself-on-social-media). But you don't need a big company to make this happen; some of the most successful businesses use promo codes to help promote themselves on smaller platforms like Twitter and Facebook.

## Tips to Make Promo Codes Work

Promo codes are a great way to entice new customers to try your product or service, but you must use the codes correctly. Here are some tips to make promo codes work for your business:

**1. Keep it simple.**

One of the most common mistakes is using too many characters in a code. It can be difficult for customers to decipher what the code means and how to apply it to their order. Long codes also create confusion because they're not visible at checkout.

**2. Make your codes more visible.**

Ensure that your promo code is as visible as possible on your website, especially on the product and checkout pages. You can also add a "coupon" section on your website that allows customers to search for promo codes and enter them manually while checking out or include a coupon field in your shopping cart.

**3. Offer multiple promo codes per order.**

The more discounts you have available, the better — but don't overload your customers with unnecessary discounts that they don't need or want (like free shipping). Offer just enough discounts to feel they are getting a good deal, but not so many that it's overwhelming and confusing to use each time they place an order.

**4. Publicize everywhere**

Make sure that your customers know about the promotion before they click "buy." Hint at it in your product description, include it in a newsletter or email promotions or mention it on social media.

**5. Don't overuse promo codes.**

Too many promotional codes can ruin your credibility with customers and vendors alike. People might think you're constantly trying to sell them stuff they don't really want, or they might stop using your service altogether because they see that you're offering special deals every day of the week.

Promo codes are a simple but effective marketing tool. They are useful for both customers and businesses. Start implementing [**promotional codes**](/features/loyalty-programs) in your marketing right now.

In this post, we will explain what promo codes are, how to use them to increase sales, and give some tips on how to make them work.

Promo Codes: A Timeless Marketing Method Guaranteed to Work.jpg

57% of consumers say that they wouldn’t have made a purchase at a new retailer for the first time without a coupon.

What Are Promotional Codes and How to Use Them in Marketing

Promo Codes: How to Use Them for Business?

<Img
img="/uploads/loyalty_program_trens_in_2022_a7fe7a8f10.jpg"
alt="Customer Loyalty Program Trends For 2022"
/>

Building customer loyalty is the key to driving repeat business, increasing profits, and developing a customer base of long-term, satisfied clients. A well-designed loyalty program can help you build brand loyalty and increase the lifetime value of every customer.

Yet, many programs fail to take off because they're not relevant to their intended audience. Customer loyalty will likely fall when you offer subpar reward programs that fail to meet the target group’s needs or expectations. Some people like getting discount coupons, others love free gifts, while some customers prefer to get early or exclusive access to new products or services.

It’s up to you to understand your customers and tailor your loyalty program strategy accordingly.

Let's break down the loyalty program trends that will shape 2022 and the coming years so you can build better relationships with your customers.

## 1. Gamify the Shopping Experience

As far as loyalty program trends go, gamification is leading the pack by a considerable margin.

By definition, gamification is the incorporation of game design elements, like point scoring, leaderboards, and competition with others to non-gaming contexts. As a marketing strategy, it can be used to create an immersive, engaging, and fun experience for your customers. Gamification works exceptionally well as a tiered loyalty program where customers have to earn a certain number of points to move up a level.

When you gamify a loyalty program, it creates an incentive for customers to interact regularly with your brand. They provide a sense of accomplishment by associating each repeat action that’s valuable to your business with a reward. As a result, customers’ purchase more frequently, spend more money, and are more likely to use their loyalty points to get rewards.

Gamification helps to [**grow brand awareness**](povyshayem-uznavayemost-brend-ustanavlivayem-avatar-email-otpravitelya) and loyalty while increasing user engagement. Plus, it creates an interactive community around your brand that’s key to growing your business.

Duolingo is a good example of how to use gamification in loyalty programs. The app has a free and paid version. In the free version, the user has only five hearts. If during the day he makes five mistakes, he will have to postpone classes until tomorrow. This way, they encourage users to upgrade to a paid Duolingo Plus version. 

<Img
img="/uploads/duolingo_gamification_0a21f22030.png"
alt="Duolingo gamification"
/>

## 2. Make It Mobile

As dependency on mobile devices increases, so do the opportunities for mobile-based loyalty programs. [**Mobile apps**](mobile-app-as-a-marketing-channel) allow you to track in-app customer activity and reward them accordingly. Through advanced analytics, you can understand your customers better to deliver more personalization and increase your sales.

When designing mobile loyalty programs, do not limit your rewards to purchases. The purpose of a loyalty program is to show customers that you care about them. For this reason, design your loyalty to focus on participation so customers can feel valued.

<Img
img="/uploads/subway_3ef9c5d271.png"
alt="Subway loyalty program"
src="Subway loyalty program"
/>

## 3. Focus on Multiple Touch Points

Developing a mobile loyalty program is a crucial step towards creating an [**omnichannel loyalty program**](omnichannel-vs-multichannel) that offers consumer rewards for any actions taken on any channel – online, in-app, in-store, or otherwise. An omnichannel program covers all touchpoints, whether customers promote a product on social media, leave an in-app review, or refer a friend via email.

Hybrid loyalty programs are the future and the key to prolonged customer engagement. Merge scannable loyalty cards with digital avenues to create a seamless experience for consumers. Your loyalty program should be adaptable, no matter how your customer chooses to engage with you.

## 4. End-to-End, Customized Loyalty Programs

Consumers want to choose how and when they engage with their favorite brands. End-to-end loyalty programs offer both traditional points-based programs and subscription loyalty programs, where customers opt-in by paying a membership fee to access enhanced benefits.

An end-to-end loyalty program creates a complete loyalty ecosystem that incentivizes new and repeat customers. Point-based systems allow new customers to experience all the benefits you have to offer with a low barrier to entry, while a premium loyalty program provides loyal customers with a VIP experience that keeps them hooked to your brand. Such programs emphasize the value of loyalty without alienating those who aren’t familiar with your brand.

## 5. Amazing Experiences Remain Essential

Going forward, customers expect personalized experiences from companies, be they a social media giant or a small business. Consumers are inundated with thousands of marketing messages every day making it challenging to break through the noise. One way you can do that is through [**loyalty partnerships**](customer-loyalty-program). For instance, developing a product line with an influencer or another brand will expand the reach of your brand and create new engagement avenues like contests, sweepstakes, and rebates.

Also, there’s an increasing demand for authenticity and social justice, which means customers are more likely to work with brands that have a conscience. By incorporating a charitable or sustainable aspect to your loyalty program, you can increase brand loyalty and attract customers whose views align with your values. It’s a great rewards program for small businesses that allows you to build a loyal, engaged community while creating opportunities to partner with other like-minded brands.

## The Future of Customer Loyalty Programs

For the next few years, the leading loyalty program trends will focus on mobile apps, paid memberships, and gamification.

Most loyalty professionals recognize the importance of getting actionable insights to predict consumer behavior. After all, the key to executing successful loyalty programs lies in hyper-personalization and creating frictionless omnichannel customer experiences.

Let's break down the loyalty program trends that will shape 2022 and the coming years so you can build better relationships with your customers.

loyalty program trens in 2022.jpg

Top 5 Customer Loyalty Program Trends to Watch in 2022

Customer Loyalty Program Trends For 2022

<Img
img="/uploads/Warning_Signs_of_Customer_Drop_Off_from_Your_Digital_Service_627573a970.jpg"
alt="Warning Signs of Customer Drop Off from Your Digital Service"
/> 

A substantial chunk of our sales and marketing strategies focuses on increasing the quality website traffic of your business website and getting a consistent batch of new customers. Sounds fair, right? After all, you need to keep expanding your customer base to increase your revenue and earn profits.

Well, before we proceed, let’s have a quick look at three [**statistics**](https://smallbiztrends.com/2016/10/customer-retention-statistics.html):

- 65 percent of the revenue of a business comes from its existing customer base.
- 80 percent of your future revenue will come from just 20 percent of your current customers.
- The cherry on the cake — it costs five to eight times more to acquire a customer than it does to keep the existing ones.

Do you recognize what these data reflect?

While developing strategies and attracting new customers is vital for the health of your business, it’s equally important to hold onto the ones that you’ve already got. Not only are they easier and affordable to keep, but they generate more revenue for your business too.

However, a large percentage of businesses do not make customer retention a priority, not at least from the beginning. It is why it goes on to become a serious boardroom concern. The challenge enhances when you address the fact that customers are now less forgiving — one-third of consumers switch companies after just one poor customer service experience. It sounds scary, doesn’t it?

However, customers do not drop off instantly in most cases. They, unintentionally, give subtle signs that voice their concern or dissatisfaction. If you look close enough, you can manage to recognize those warning signs in their buying behavior. You can then go into your crisis mode and take immediate corrective measures to win your customers back.
 
In this blog, we are listing the top five early warning signs that can tell you you’re about to lose your customer so that you can increase your customer retention rate. Here we go.

## Top 5 Churn Indicators

### 1. Decline in Engagement

Customer satisfaction directly impacts customer engagement. However, do not mistake [**customer engagement**](https://growave.io/blog/customer-engagement/) for activity. While you should be on the lookout for decreased platform activity or action for regular purchasers, the way of engagement varies for customers at different stages.

If your regular customers have turned into [**loyal customers**](customer-trust), their reduced engagement may reflect in their unwillingness to try out new products or features. If you’re lucky enough to have [**evangelist customers**](https://www.marketing-schools.org/types-of-marketing/evangelism-marketing/), they may show their dissatisfaction by reducing voluntary promotion or referral activities for your brand.

### 2. Change in Usage Patterns

A decline in platform or app usage indicates that customers are not getting what they need, and they are likely to drop off. Tracking KPIs, such as site abandonment rate, lapsed payments, and activity time, can help you recognize churn right before time.

For example, in your cloud storage SaaS model, if your customer begins using 500 gigabytes from a sudden drop of one terabyte of storage, you need to worry.

### 3. Increase in Complaints

You should be thankful for the customers who complain. For every one person who raises help tickets, there are at least two that do not. They just quietly leave without showing signs of churn. Therefore, take every complaint seriously. If there is a sudden increase in customer complaints, you should be on high alert.

Moreover, not everyone voices their concern directly. Customers may be talking negatively about you on social media or giving you lower ratings. Activate [**social listening**](https://sproutsocial.com/social-listening/) to always be in the loop on the web.

### 4. Disinterest in Incentives

Who doesn’t like availing of the benefits of a sale, discount, or special offers? We’ve got one group - customers who are planning to unsubscribe.

If you see lower [**conversion rates**](conversion-funnel-stages-and-optimization) than usual on your promotional offers and incentives, customers might be losing faith in your brand. And they don’t even want to indulge in profitable sales. Negative experiences induce such extreme actions, which discourage them from purchasing, even at a reduced price.

### 5. Unresponsiveness to Emails

When shoppers feel less connected and less loyal to your brand, their social interactions drop. Your email marketing metrics can reflect the signs of [**customer churn**](https://www.gravysolutions.io/post/2021-ultimate-customer-churn-rate-prediction-and-involuntary-churn-guide). You’re not going to get 100% open rates. However, if customers who have a history of opening your email most of the time are not doing so anymore, it is a sign of reduced customer engagement.

You need to adopt marketing practices that give people reasons to not unsubscribe. You can change your email marketing strategy and include content that may resonate more with your audience.

When you are armed with the ideal knowledge, you can quickly recognize the at-risk customers through these warning signs. It can protect your business from losing vital customer accounts. As a bonus, here is a quick tip on being proactive about reducing customer churn.

### Utilizing Customer Loyalty Programs Before Churn Rates Rise

Customer loyalty programs keep your company top of mind, your customers engaged and regularly informed on deals catered to their interest. [**Customer loyalty programs**](/features/loyalty-programs) should always be an even exchange of quality for data. A customer should be providing you with their email in exchange for:

- Personalized promotion codes
- Engagements on social media channels
- Emails that only pertain to specific engagements.

If you want to learn more about how to retain customers with loyalty programs, read this [**article**](customer-loyalty-program).

## Conclusion

To scale up to the next business goal, you cannot afford to lose customers. To prevent customer churn, be proactive and work through the aforementioned methods to turn customer wins into loyalty. Keep reducing churn rate and increasing customer retention at the top of your priority list. It will make your business more profitable for the years to come!

In this blog, we are listing the top five early warning signs that can tell you you’re about to lose your customer so that you can increase your customer retention rate.

Warning Signs of Customer Drop Off from Your Digital Service.jpg

Customers do not drop off instantly in most cases. They, unintentionally, give subtle signs that voice their concern or dissatisfaction. 

5 Warning Signs Your Digital Service May Lose Customers

Warning Signs of Customer Drop Off from Your Digital Service

<Img
img="/uploads/blog_6538062d62.jpg"
alt="What is a customer loyalty program and how to create it"
/>

Once a marketer has enticed prospective clients to use their products or services, their marketing mission immediately turns to ensuring these same customers will return. A satisfying user experience is essential to making that happen.

One strategy, an effective loyalty program, has proven infallible in bringing customers back, even for decades, after that initial purchase.

Quality, value, and customer satisfaction will always be the fundamental drivers of consumer decisions. But airlines, hotels, car rentals, banks, coffee shops, grocery and drug stores, restaurants, credit card companies, and most other businesses today rely on loyalty programs to [**retain**](customer-trust) their client base.

## What are Loyalty Programs and Loyalty Marketing?

Loyalty programs, sponsored by retailers and other businesses, usually consist of rewards, discounts, freebies, or other incentives to entice buyers to come back to buy future products or services.

While loyalty programs of some type have been around for centuries, these have become more prevalent, sophisticated, and far-reaching in recent years. More miles or overnight stays, more money spent, and more frequent purchases often mean free goods or services, money back, or other powerful incentives to maintain [**loyalty**](customer-loyalty).

Customer loyalty programs not only retain more customers for future purchases, but these clients are more likely to try new products. And, on average, these consumers will spend 31% more than first-time buyers.

In any instance, the lure of a free airline flight, hotel stay, prizes, gifts, and discounts earned with a certain number of purchases becomes an irresistible draw that comes them coming back.

<Img
img="/uploads/customer_loyalty_b5ca658567.jpg"
alt="Customer loyalty"
/>

## How to Create an Effective Loyalty Program

If you have not already implemented a loyalty program, creating one can be a low-cost, high-return strategy to lock in and grow your client base.

Businesses spend five times more to attract a new client than to keep existing ones. Increasing customer retention by just 5% can create a 25% to 90% increase in profitability, depending on the starting point.

So, how does a new or existing company go about creating an effective loyalty program?

**Excellent products and services** are the first and most crucial element of a successful loyalty program. A loyalty program cannot even begin to capture the consumer’s interest unless what you offer addresses the fundamental reasons why they came to you in the first place.

**Stay Consistent** with your products and communications. One bad experience can damage the relationship permanently since the possibility of future bad experiences becomes a deterrent to returning.

**Focus on the customer.**  Be sure you understand their needs and continually determine whether your products or services are meeting them.

**Do more than what is expected.** Whenever possible, add something extra to prove your commitment to the customer.

**Reward customer loyalty.** Design your program to offer meaningful rewards.

**Make the Rewards Program available** for all interactions, both in-person and online.

**Create Status Levels.** Airlines, among others, do a great job of rewarding Frequent Fliers with status levels that offer preferred seating, upgrade possibilities, boarding preferences, lounge availability, and more.  Similarly, wineries reward their exclusive Club Members (those who spend more) with direct access to the more exclusive wines, complimentary wine tastings and winery tours, and further recognition while visiting the winery.

**Surprise and delight customers.** Awarding customers when they may not be expecting anything is a great way to solidify a relationship. A birthday gift, for example, can be a warm, personal way to reward them. For example, Altcraft platform allows you to [**personalize emails**](/features/personalization) and wish every customer a happy birthday by sending a promo code.

**Offer first opportunity to buy new offerings.** As you introduce new products, an introductory offer to your Loyalty Program participants is a way to show them that they are preferred.

**Be Creative** when naming the program and even your rewards points.

<Img
img="/uploads/Leading_factors_disliked_about_loyalty_programs_bd1d27b935.jpg"
alt="Digital customer loyalty punch card"
/>

## Types of Loyalty Programs

Types of loyalty programs vary depending on the products offered. These may include:

- **Points**

While programs have different requirements, some offer a single point for each dollar spent during a specified period. In some instances, points should never expire. However, setting a time limit may encourage more frequent visits. While a weekly visit to a grocery store can be a natural frequency, airlines do not expect their less-than-elite customers to fly as often. So, their rewards “miles” may never expire.

One of the most popular point programs is Sephora’s Beauty Insider rewards program. Customers earn points for each purchase they make: 1 point for every dollar spent. When there are enough points, they can exchange points for limited cosmetics.

<Img
img="/uploads/sephora_beauty_insider_feb7957ea0.png"
alt="Sephora’s Beauty Insider rewards program"
src="Sephora’s Beauty Insider rewards program"
/>

- **Cashback Programs**

When customers spend a certain amount of money, they may be rewarded with coupons or cash to be used at the issuer’s business. Bank credit cards also offer cashback awards that can be redeemed as credits on balances, deposits to checking or savings, or purchase items at specified retailers.

- **Punch Card Programs**

Each time a customer purchases, one or more holes of their customer loyalty cards get punched. When the card is “fully punched,” the customer receives a free item. This is if we’re dealing with paper cards. When it comes to digital punch cards, they exist within a mobile app, but the idea is the same.

<Img
img="/uploads/mccage_digital_customer_loyalty_punch_card_70d2e8faf9.png"
alt="Digital customer loyalty punch card"
src="Digital customer loyalty punch card at McCafe"
/>

- **Promo Codes**

Promo codes to loyal customers can enhance your relationship with prospective and current customers. These may be personally directed or general and can be presented through multiple platforms.

In [**Altcraft Marketing**](/en) automation platform, it is convenient to generate personal promotional codes: set up your own marketing automation workflow and decide at what moment you want to give your loyal customer a [**promo code**](/features/loyalty-programs).

<Img
img="/uploads/gamification_of_activity_image_en_52c917855a.jpg"
alt="Leading factors disliked about loyalty programs"
src="Promo code workflow sample"
/>

- **Partner Programs**

These programs involve earning “points” at more than one business to be used at any of the participating companies.

## Conclusion

An intense focus on customer care will benefit your company in very significant ways. Satisfied customers will relay their positive experiences to friends, thereby creating new business and will positively represent your brand to others. An effective loyalty program is an integral part of customer care.




Customer loyalty programs help you attract new customers and keep existing ones. Read about the types of loyalty programs and learn how to create your own. 

блог.jpg

Businesses spend five times more to attract a new client than to keep existing ones. Increasing customer retention by just 5% can create a 25% to 90% increase in profitability.

What Is a Loyalty Program and How to Create It

Customer Loyalty Program: What Is It and How to Build It

uzum-case.png

Reduced push notification opt-out rates, increased OR, saved working hours

bnb-bank-kejs-v-menyu.png

The open rate for automatic Viber messages is around 60%, and MAU growth for the year is +19%

All user information is systematically collected in a unified customer data platform

Distributing messages across various communication channels: email, SMS, push notifications, messengers

Promo codes, bonuses, and points for building long-term customer relationships

You can create and edit any HTML template, as well as save your own custom blocks

Personalized distribution of messages to clients through communication channels

Conducting experiments and optimizing marketing strategies

Tracking the effectiveness of marketing campaigns to make informed decisions

Connecting external systems to the platform and synchronizing data with company databases

Creating questionnaires, surveys, and feedback forms of any level of complexity

The ability to communicate with your clients anytime and anywhere

Increasing user awareness of your company's offers

Customer Data Platform

Omnichannel Marketing

Loyalty programs

HTML Email Builder

Personalized mailings

A/B/n Testing

Real-time analytics

Integration and WebHooks

Forms and Surveys

Messenger Communication

Pop-Up Windows

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