Why Rewards Programs Matter in Marketing and How to Use Them

Date: 2025-12-10 | Time of reading: 7 minutes (1381 words)

Any customer will be happy to get a pleasant bonus with a purchase — and brands have long adopted this approach. Retailers, cafés and restaurants, airlines, and banks build customer relationships through different bonus programs and privileges.

Below, we’ll look at what bonuses in marketing are and how to use them for successful customer retention.

What Bonuses in Marketing Are

A loyalty program is a way to retain customers and encourage repeat purchases through rewards. When a bonus program is well thought out and differs from typical solutions, people remember the brand faster and develop a warmer attitude toward it.

Today, almost every major store or service has its own reward system. Usually, it is enough to register and get a bonus card — plastic or virtual. After that, the customer earns points or bonuses for purchases and activities, then spends them on favorable terms.

Each brand has its own rules: which actions earn bonuses, how much they are worth, what part of a purchase can be paid with them, and when they expire. The main thing is that these terms should be simple and clear for participants. There is no need to make them complicated.

Why Bonuses and Loyalty Programs Are Needed

Customer retention is a priority in modern marketing. Marketers even identify a separate area called retention marketing — strategies for working with existing customers. We covered retention in more detail here.

Why should businesses focus on customer retention through bonuses? Here are the main reasons:

Marketing budget savings. Finding a new customer is much more expensive than retaining someone who is already with the brand. Some estimates suggest that acquisition costs 5–10 times more. It is more profitable to reward those who already buy than to try to win new customers every time.
Growth in profit and average order value. Regular customers are more valuable to a company than new ones: according to Bain & Company, increasing retention by just 5% can raise profits by 25–95%, depending on the industry. Bonus programs are one way to stimulate such returns: they motivate customers to buy more often, increase their engagement, and raise their overall contribution to revenue.
Recommendations and word of mouth. Loyal customers willingly recommend the brand to friends and acquaintances, share their experience, and essentially act as a free source of new buyers. In other words, a bonus program not only retains a person who already buys, but also brings in new customers through personal recommendations.
Stronger brand image. A well-designed loyalty program strengthens customers’ sense of trust and importance. When people receive real privileges and attention, they feel that the brand values them. Over time, a circle of regular buyers forms — effectively brand fans who are less likely to leave for competitors.

Types of Bonus Systems

Accumulated bonus points. After each purchase, points — or bonuses — are credited to the customer’s account. Usually, one bonus point is equivalent to one dollar of discount, but other ratios are also possible. The company defines its internal bonus exchange rate and the terms of use. As a rule, the customer can pay with bonus points for a certain part of the next order, for example, up to 20–50% of the total. If the points do not expire and continue to accumulate, customers have a reason to return and finally use them for a benefit.

For example, in Sephora’s loyalty program, customers earn bonus points and can spend them in the Rewards Bazaar to redeem them for samples.

Promo codes for regular customers. As a rule, customers receive this type of bonus after meeting certain program conditions. For example, after every fifth purchase, a customer may receive a promo code for 10% off the next order, or a birthday customer may receive a promo code for a birthday gift. Promo codes are usually sent by email or SMS. A loyalty program participant knows that after meeting the conditions — making the required number of purchases or placing orders for a certain amount — they will receive a bonus: a personal discount promo code.
Cashback. A common type of bonus today is cashback. It works like this: part of the money spent is returned to the customer. The accrued cashback can be credited to a bonus account or directly to the user’s main account. In retail loyalty programs, it is more often accumulated as points that can later be used to pay for future purchases from the same brand. In bank loyalty programs, cashback is often paid out as real money: the customer receives a percentage of each purchase amount in dollars to their account.

Bonus programs differ not only by mechanics, but also by access. Open programs are available to everyone: it is enough to register or make a first purchase to receive basic bonuses. Closed programs work by invitation and give an expanded set of privileges: additional bonuses, personal offers, private promotions, and other benefits for a limited group of participants.

How to Use Bonuses in a Marketing Strategy

For a bonus program to actually work, it first needs to be carefully planned and set up using convenient technology. Below are the main steps for launching and using bonuses to grow a business, using the Altcraft platform as an example.

1. Work out the program rules. At the start, think through the mechanics: what bonuses the customer receives, what they are awarded for, how much they are worth, and how long they remain valid. People should understand how everything works: how many points they receive for a purchase, whether they can pay for part of an order with them, and where to check the balance. For example: “For every X dollars — 10 bonuses, equal to X dollars off; bonuses can cover up to 50% of the next order; validity period — 6 months.” It is convenient when the rules are visible where the purchase is made. At this stage, you can also plan additional activities: bonuses for completing a profile, leaving a review, taking part in a survey, or referring friends. This turns the program into ongoing interaction, not a one-time discount.

2. Manage customer data through a CDP. After launching a loyalty program, it is important to work with data not manually and not in Excel, but in a unified system. A Customer Data Platform collects everything known about the customer: purchases, website behavior, responses to campaigns, point history, and support requests. This creates a complete customer profile instead of scattered records from different departments. For example, Altcraft Platform as a CDP collects all customer data in one profile: purchase history, website and campaign activity, and channel subscriptions. Based on this data, you can divide the audience into segments — newcomers, regular customers, VIPs, inactive users — and set up separate bonuses and communication scenarios for each group.

3. Automate communications and marketing campaigns. For a bonus program to bring results, regular customer communication is essential. Altcraft can run omnichannel campaigns and automatic messages by schedule or event: a purchase was made, there is no activity, or a birthday is approaching. For example, you can send an email with accrued bonuses right after an order or a notification with a special offer if the customer has not returned for a long time.

Conclusion

In marketing, bonuses usually mean a system of material rewards: discounts, bonus points, and promo codes. In this way, the company thanks customers for purchases and gives them an additional reason to return, while the customer sees a direct benefit from regular interaction with the brand.

When a bonus program is transparent, the terms are clear, and accruals and redemptions do not raise questions, people are less likely to leave for competitors and are more willing to place repeat orders. In combination with a CDP and marketing automation, such a program is easier to integrate into the overall strategy: set up different scenarios for segments, track results, and gradually strengthen the effect of working with a loyal audience.