10 benefits of loyalty program for customers

Loylaty program benefits

Customer loyalty occurs when a customer prefers a particular company consistently over its competitors. When customers are loyal, their buying decision is not influenced by the price or availability, as they would rather wait or pay more to get the same quality they are familiar with.

The importance of customer Loyalty programs

Customer loyalty programs play a vital role in customer retention, as data shows that customers spend 67% more when they are part of a sustained customer loyalty program. Customer loyalty programs are not to be regarded as short-term customer retention strategies; the longer the customers enjoy the loyalty programs, the more likely they stick to a particular brand and remain loyal.

Loyalty programs have been given new recognition in recent years for several reasons. First, because customer loyalty programs have a variety of benefits for companies, but also because they have become an expected part of the consumer experience. However, in today’s market, simply having a traditional loyalty program is not enough; in order to increase loyalty program ROI and overall consumer retention, companies have taken to expanding their loyalty rewards to incorporate social and behavioral actions, such as referral rewards and points for user-generated content, while also attempting to provide their customers with a more personalized experience. The expansion depends on a combination of careful planning and the right customer loyalty software.

Loyalty stats and trends

You can check the statistics below to better understand the significance of customer loyalty programs and how instrumental they are in consumer purchasing decisions:

  • 69%of customers say that loyalty programs influence their choice of retailer
  • 57%of customers join loyalty programs because they want to save money, while 37.5%go for it to receive rewards
  • 50%of customers say they would change their behavior to attain a higher tier of the customer loyalty program
  • 76%of customers believe that loyalty program strengthens their relationship with brands

Benefits of customer loyalty programs

Now, let’s check some of the benefits of the loyalty programs:

Revenue increase

Increasing customer retention helps boost profits simply because loyal customers already have trust in your brand and therefore are likely to spend more. According to the research referenced above, increasing retention by just 5% through customer loyalty programs can boost revenue by 25 to 95%.

Save money

While creating and implementing a loyalty program is an investment, customer retention strategies are often less expensive than attracting new customers. Acquiring new customers can be 25% more expensive than retaining current customers.

Data accumulation

Most modern consumers prefer a personalized experience, with more than half of Generation K and Millennials reporting personalization as a high priority. By encouraging your customers to fill out profiles as part of your loyalty program, you can get the data so you can not only personalize the customer experience, but also create targeted marketing campaigns, increase your bond with customers, and even implement your referral program.

Make consumers feel appreciated

A comprehensive, personalized loyalty program will make your customers feel like they have an emotional connection with your brand and will increase customer patience in case of mishaps. You can increase appreciation by incorporating “surprise and delight” points or rewards for special occasions such as a customer’s birthday.

Increase sales

By personalizing the consumer shopping experience through gathered data, you can make better suggestions to your customers, which will then increase the likelihood that your customers will purchase a suggested product.

Measure loyalty through engagement

Program data allows you to track analytics and view reports, measuring the efficacy of customer loyalty on your sales. Measure important retention metrics like program engagement, repeat customer rate, and purchase frequency.

Better communication

Loyalty programs give you a direct way to communicate to customers, which can be particularly useful in an emergency such as a recall. By matching purchase dates, you can email relevant customers about a recalled product instead of sending out a generalized email which will be ignored. In addition, you can utilize your loyalty program to promote sales, special events, and showcase new products.


While it takes a bit of work to structure a strong loyalty campaign and to find the software that fits your needs, the program itself is self-sufficient. While it is advised that you monitor its metrics, the program will continue to run on your chosen settings.

Attract new customers

A good rewards program can attract new customers in several ways. First, if you offer points or discounts for a signup, you will automatically be able to add new customers to your mailing list simply because customers want to take advantage of discounts. Meanwhile, if a customer sees a good loyalty program where rewards are within reach, they are more likely to try your brand simply because the rewards are easily accessible.

On the other hand, customers who are satisfied with your brand may share their experiences with friends even without a referral program. Of course, it is fairly easy to incorporate your loyalty and referral rewards into an omnichannel platform in order to further boost referrals and attract new customers.


A good loyalty program doesn’t need to be stagnant. While loyalty programs are fairly self-sufficient, you can also change and improve your loyalty program by incorporating even more marketing aspects, including referral marketing and visual commerce. For instance, if your company needs a stock of customer photos featuring a new product, your loyal customers will be your go-to source. After all, who better to promote your brand in a photo than someone who is already familiar with your products?


Customer loyalty impacts all the important metrics important to running a successful business. If you have happy and satisfied customers, they continue to buy from you, spend more than others, are less volatile, and more likely to become brand advocates. New customers tend to cost more to acquire, and don’t spend as much money as loyal, repeat customers. Keeping customers coming back for more is critical to business success.
By creating a comprehensive loyalty program that allows for modern marketing techniques, you can turn your customers into advocates for your brand.