Say Goodbye to Traditional Rewards and Level Up Your Loyalty Program

Say Goodbye to Traditional Rewards and Level Up Your Loyalty Program

Share on:

Loyalty programs thrive on rewards. In fact, without rewards, loyalty programs wouldn't even exist. Impressive statistics show that 90% of businesses have implemented a form of loyalty program, and consumers strongly favor companies that give rewards—75% of them! It's clear that in today's competitive market, businesses need to utilize loyalty programs as a means of ensuring customer satisfaction, and satisfaction leads to long-term loyalty.  

When it comes to brand marketing, loyalty programs have proven to be the most successful approach. The numbers speak for themselves, as countless well-known brands have grown by implementing innovative loyalty programs, including Ulta: 95% of their revenue comes from their Ultamate loyalty program! Numerous factors contribute to the loyalty program's effectiveness. The bottom line, though, remains constant: loyal customers are reciprocated by superior customer experiences. 

There is no doubt that rewards systems have evolved significantly in customer loyalty programs. Customers of today prefer experiences over monetary incentives instead of discounts or cashback. Customers' experiences with loyalty programs are centered around rewards. 

For brands, taking the initiative to offer superior rewards rather than the more common discount-only rewards is extremely beneficial. Rewards are only the initial incentive for any customer to sign up for a loyalty program. As a result, adjusting rewards can significantly affect how well your loyalty program performs as a whole. Let's examine what today's rewards demand from businesses that can attract customers. 

Use a blend of traditional and modern rewards  

The changing loyalty landscape reflects a variety of target audiences and differing customer expectations. To join a loyalty program, a certain audience segment still looks for traditional perks. 43% of people participate in loyalty programs to receive discounts or offers, and 27% do so to receive freebies. 

XPLR Pass, The North Face’s loyalty program, is a great example. It offers new members of their loyalty program a standard $10 discount to overcome first-time buyer resistance. Additionally, it provides members-only field testing as well as early access to collections and collaborations. Such a variety of rewards enables the business to appeal to various customer segments and broaden the reach of the loyalty program. 

Personalized rewards are now essential  

Moving away from basic messaging and rewards is the first step in creating a loyalty program that is ready for the market. If the benefits were customized to meet their specific demands, 55% of members would use their loyalty programs more frequently. Customer behavior is being impacted by digitization's speed. In exchange for more personalized experiences, customers are willing to provide their data. By utilizing loyalty programs, brands gain access to first-party data that allows marketers to personalize rewards. 

Customer behavior is being influenced by the speed of digitization. Customers are open to giving their personal information in exchange for personalized experiences. Brands can obtain first-party data through loyalty programs, enabling marketers to customize rewards. 

With their loyalty program, Beauty Insider, Sephora excels at using data-driven infrastructure and providing customer-centric experiences. Customers can select their rewards while also gathering personal data. Customers can use their points to purchase gifts and exclusive merchandise and take advantage of complimentary beauty tutorials. Customers also use mobile apps to redeem these rewards, which generates important data. To increase interaction, Sephora uses it to provide tailored messages, offers, and rewards. 80% of their annual revenue is contributed through the loyalty program.  

Collaborate to provide additional rewards  

Opportunities for value provision arise through rewards. Typically, a hotel chain may extend its hours or length of stay for members of its loyalty program. Offering benefits like spa visits, adventure activities, or free meals at fast food restaurants, however, can also help members enjoy their trips more than before. 

Collaboration among brands could result in greater customer retention. These brands become a part of their customers' lifestyles and establish a lasting connection since customers can get a variety of rewards at a single touchpoint. 

Customer emotional connections can be made through CSR 

Brands have historically launched loyalty programs to increase recurring revenue without making a significant investment. However, an emotional connection is necessary for there to be true brand and customer loyalty—this is when corporate social responsibility (CSR) comes into play. Customers who are brand loyal cannot be attracted by monetary rewards. The lifetime value of an emotionally invested customer is 306% higher than that of the average customer.   

Many customers now identify with businesses because of their efforts to protect the environment and animals. Customers expect brands to support good causes and give back to the community. 

Loyalty program growth is hampered by generic messaging, standard rewards, and monetary-driven programs. According to a McKinsey report, only about 67% of loyalty programs provide true value. To meet and surpass customer demands in 2023's evolving market environment, marketers must adopt a holistic strategy. A boost is necessary to the entire customer experience.  

Elements that prepare loyalty programs for the market  

There are three elements that must be met for loyalty programs to be successful: value, excitement, and convenience.  

  • Value 

How to provide: Rewards; personalized experiences  

It cannot happen without: Using a data-driven approach to better understand your customers  

  • Excitement 

How to provide:  Gamification; omnichannel encounters  

It cannot happen without: A dependable technology platform   

  • Convenience  

How to provide: Better choices; simple to use; obtain points  

It cannot happen without: A strategic consultation  


Every marketer looks for ways to draw in, hold, and delight customers. That is how the brand keeps its devoted customers. Deep data analytics, a technology platform, and a strategic consultation can be used to summarize these capabilities into three essential imperatives today. These requirements connect the loyalty program to meet goals, from choosing the tiers of the program wisely to designing a seamless, personalized experience. 

Loyal-n-Save is ready to assist you in creating the strong and effective loyalty program you have always desired. We offer a wide range of features, including the Swag Shop and Team Builder, which let your customers use their rewards tokens to get their hands on exclusive brand apparel and give them the opportunity to engage in healthy competition with their friends and family. Ready to learn more? Get in touch with one of our specialists to set up a consultation and experience a demo today!  

This article was written by Loyal-n-Save, an omni-channel customer loyalty solution for retailers looking to increase customer retention and new customer acquisition.
Share on:
Danielle Dixon
Written by Danielle Dixon

Danielle is a content writer at Loyal-n-Save. She specializes in writing about implementing loyalty solutions proven to help a company grow.

Subscribe to Our Loyalty Newsletters!

We'll keep you posted about our innovations, exclusive offers on our subscription plans, and latest updates, articles and blogs about the loyalty industry.

Suggested Blogs

Read our blogs and stay informed about the latest updates for the loyalty management industries and how consumers are reacting to the new developments.

How to Keep Your Customers Loyal and Engaged with Gamification in B2B Loyalty Programs

A Reflection on the History of Loyalty Programs and the Next Wave of Loyalty

Tips For Running A Points-Based Loyalty Program