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The Independent Retailer’s
Ultimate Guide to Customer Loyalty

How to Create an Effective Loyalty Program 

5 Types of Retail Loyalty Programs: How to Make Money and Retain Customers

Learn the basics in our quick reference guide below, and download the full resource to see popular examples and learn more about which type of program is right for your business.

Points Programs
A basic points system is the simplest and most straight-forward type of program. In short, for every dollar a customer spends, they receive a certain amount of points in return. These points accumulate until the customer is able to redeem them for a reward. 

Stepped Points Programs
Stepped points begin to add a weighted system to a loyalty program. The weighted system can be used to encourage certain behaviors as well as tap into the exclusivity factor desired by many consumers.

Pay to Play Programs
These programs require upfront fees to become a member and start earning points towards rewards. This type of program has become fairly common, from annual fees for airline mile credit cards to Amazon Prime memberships.

Partner Programs
Some companies choose to partner with each other to reward their mutual customers and encourage repeat business within the network. Partner Programs introduce your brand to a new group of potential customers with the endorsement of a brand that they already trust.

Referral Programs
Many brands which are household names today used referral programs when they were just starting out. PayPal, Uber, and AirBnB all used referral programs to generate initial buzz and mobilize current customers to recruit new customers.

Download the full 5 Types of Retail Loyalty Programs resource guide.

Spotlight on Pay to Play Programs

Paula Thomas, host of the Let’s Talk Loyalty podcast, shares her thoughts on Pay to Play.

“My favorite form of loyalty in the present and very recent past would be paid loyalty. Panera Bread is probably the best example I’ve seen. They realized that customers were beginning to resent how much money they were spending on coffee every day, so they decided to create a loyalty program in which customers could get unlimited coffee for $8.99. What they found was that customers not only came in more frequently, but they were also more tempted to buy lunch or a cookie as well.”

Choosing the Right Solutions Platform for Your Business

Loyalty solutions on the market today tend to fall into three basic categories.

Off-the-Shelf System

All in one solutions are tremendously helpful for small retailers because they are time savers. The systems are ready to use straight out of the box and sync with a mobile interface, your website, and point of sale system. There are no customizable options, which keeps costs low.

Off-the-Shelf System with Customization

For mid-level retailers and multi-site franchises, having the ability to brand your program’s hardware and software can be beneficial. Some loyalty solutions in this tier may also offer customer activity tracking and CRM integration.

Fully Customized System

These systems are primarily used by major brands and global players. They require major investments and dedicated teams to maintain a fully customized customer journey. This tier allows brands to personalize each communication and collect customer data with a high level of detail.

Learn more about these different systems in our blog article, How to Choose A Loyalty Solution. You can also learn more about how Spark Loyalty offers a cost-effective, fully customizable system for independent retailers by clicking here.

More Resources for Independent Retailers​

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