Loyalty Program and its types

Loyalty program types
Table of Contents

Loyalty program is a system or a program made by companies for loyal customers to give additional benefits. It is a tool or strategy which is adopted to retain good customers by providing them with additional benefits like cashback, vouchers, goodies, etc.


There are many types of loyalty programs but the main objective of a good loyalty program is to appreciate regular customers & ensure that they become loyal customers.

This helps the companies to build a strong repeat consumer base.

Generally, the loyalty programs come in different forms depending on the brands where some prefer to use a single model while others opt to use a combination of two or more models. Listed below are the different types of loyalty programs.

Point Programs (Types of Loyalty Programs)

Point programs are the simplest form of loyal program which is based on a common principle: “Spend more to get more.”

The point program is a popular one from the other types of loyalty programs because you will be entitled to points that can be converted to cash when you buy an item or make use of the services.

The customers can also purchase on the brand or company’s website or in-store by getting a specific number of points depending on the level of purchase. The points can later be translated into a reward type to increase the average order value of the customers. 

Loyalty Program and its types

Spend-based Loyalty Programs

The customers are given a chance to grab the loyalty credits for the amount spent at a business with the spend-based loyalty programs. These types of loyalty programs are flexible to understand as it is creative and effective to reduce the churn rates while increasing the amounts.

Tiered Programs

Tiered Programs are useful for implementing the right balance between the attainable and desirable rewards. This can highly encourage the customers to purchase beyond limits. It can be created to receive more rewards that will let your customers ascend based on customer loyalty.

These types of loyalty programs are calculated based on the purchase, points and other engagement metrics to offer more significant benefits.

Paid programs are created as a membership program where the customers are invited to pay the membership fee on an annual or monthly basis. It is popularly common among the VIP member’s clubs where the companies can market their brands to frequent or existing buyers.

The customers under this system can access unique discounts, opportunities, and extraordinary services.

Value-Based Programs

The customers here are likely to become a company’s brand ambassadors by structuring the loyalty programs aligning to their values. The value-based programs are mainly focused on defining the values.

So, it is better to create these types of loyalty programs that are similar to the point system where the customers’ purchases are converted into currency. The rewards are connected on a deeper level with your customers by creating an ethical and strong relationship with them.

Game Programs

Turning a customer loyalty program into a game app is the main idea of game programs. By this way, you can encourage repeat purchases, increase customer loyalty and strengthen the brand image while entertaining the customers simultaneously.

Partnered Programs

Partnered Programs are effective loyalty programs for retaining the customers through strategic partnership (i.e) by combining partnership with a loyalty program to grow your business. This makes you understand the customers by truly offering their needs beyond expectations.

Hybrid Loyalty Programs

Combining two types of loyalty programs like game and tier programs is possible in the hybrid loyalty programs. This means you can reach new loyalty levels whenever a new game level gets completed.

This game’s participation entails a purchase and encourages the customers to pursue more purchases and reach the next loyalty level.

All these types of loyalty programs help you to understand the customer needs which further improves a new way to value them by expanding the business effectively.

Read also Loyalty Program Agencies in India.

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