Different Types of Loyalty Card Programs

      Comments Off on Different Types of Loyalty Card Programs

What are Loyalty Card Programs?

A loyalty card program is an incentive plan. Many customers choose their cards based on the rewards they receive. Due to the increase in the level of competitive intensity, card providers need to rapidly create and operate innovative loyalty and reward programs. With the right initiative, you can turn first-time customers into regular customers.

A loyalty  program management solution enables users to rapidly create and manage innovative loyalty programs. The solution allows users to easily create loyalty programs to retain customers.

Types of Loyalty Card Programs and When to use Them

  1. Points Programs

Points programs focus on the principle that the more you spend, the more points you get in return. Transactions first, benefits later. The points have an expiry period after the issue date. Points programs have various benefits such as low risk and free membership which means low barrier to entry for joins. However, they are not great at increasing engagement due to low value.

  1. Tiered Programs

Tiers programs are similar to points programs in that customers earn points for purchases, but those points allow them to join certain benefit. Tiered programs offer different rewards based on how much a customer spends. The more a customer spends, the higher the tier he/she enters. Tiers programs play on exclusivity and offer great value to top tier customers. Tiers programs focus on higher value customers.

  1. Paid Programs

Paid program is an exclusive club which inviting customers to pay a periodic fee to join. In return, it must include member-exclusive benefits such as getting access to special services or discounts. Otherwise, it will lose its value. Paid program is not for everyone due to paying a membership fee that would likely be too big a barrier to entry for the average customer. Best customers are paying for membership, so that the experience must be the best. Paid program attracts your best customers and member fees can be used to offset the cost of the program.

  1. Hybrid Loyalty Programs

A hybrid loyalty program is the combination of more than one type of loyalty system. A common hybrid program is one that pairs a points-based system with a tiered program.

  1. Charity Program (Value-Based Programs)

A value-based program aims at creating a strong relationship with your customers. Besides earning rewards and getting VIP benefits, customers have another unique benefit. When your customers spend a certain amount, they can choose to donate their rewards to a charity.

Conclusion

Designing an effective loyalty program for your business requires a good understanding of who your customers are and improving how you provide value to them.