How Do Brand Loyalty Programs Increase Customer Retention?

by Deepa Bagga

The biggest challenge for any retail or restaurant business is to improve customer loyalty. Here are 4 killer strategies about how creating a loyalty program can help in increasing your customer retention rate.

As a business owner, getting your customers to walk in your retail store or restaurant for the first ever time is hard. But do you know what is even more challenging? To lure those customers and retain them for a longer time. Customer retention requires a lot of effort because your customers need a solid reason to come back to you sooner.

Customer retention is an effective way to keep increasing your revenue and brand awareness in the future. But, to convert the acquired customers into repeat shoppers or diners, you need to reward them and make the entire experience wholesome for them. One excellent way you can do this is by designing a brand loyalty program.

Customer loyalty programs, often heard but seldom used. A lot of retailers don’t really invest in loyalty programs thinking it is for the big brands. Others don’t see it to be very impactful in their journey to retaining customers.

What will a few rewards and a program do to retain customers?

A lot! People love being rewarded for small actions. A free cookie from their favourite baker is a greater reward than any other. They will cherish it because it makes them feel appreciated.

However, to make retention the core of your loyalty program, here are a few things you can do!

1. Customize the Program

Your rewards program should not only be relevant to your business, but customers as well. They are more likely to engage with you when you personalize the rewards or incentives for them.

A small detail as the rewards name plays a pivotal role in strengthening your brand’s image with the customer.

Pay attention to these minute details such as logo, the reward program name, the messaging of the loyalty program etc. Our loyalty program software allows you to design your own rewards program that lets you customize it as per your needs and tailor the communication according to your target audience. A good loyalty campaign will not only drive repeat sales, but even increase customer engagement and retention.

One brand that has created a successful loyalty program is Starbucks. Its rewards program has a dedicated message that says “Free coffee is a tap away.” They have connected their brand’s essence and what they stand for on the rewards page too.

Your messaging should talk about your brand, and what it offers. This helps customers in making a clear decision and thus make a purchase with you.

2. Gamify the Program

Gamification makes customer loyalty programs a lot more fun and increases retention for your business. To put it simply, gamification = loyalty = retention. A gamified loyalty program incorporates game mechanics to better engage with customers by inducing emotions like excitement, joy, etc.

Moreover, Create different stages of rewards. Make every stage as interesting and attention-grabbing as possible. If your first stage was a beverage, your next stage should be higher and attractive- say a burger. You can even offer a whopping 40% discount at a very high stage.

When you gamify the program with interesting stages, you literally make your customers want to get the higher reward. To get the better reward, they need to spend the amount and earn points. In this case, they will stay in the program longer, lured by the rewards, and you will see an increase in customer engagement and retention.

3. Keep it Accessible

Gamifying is definitely a good way of connecting with your audiences. However, if you cannot really make it easy and accessible for them, they will lose interest. Successful customer loyalty programs are ones that educate the customer about earning the rewards, terms and conditions, and the process of earning the rewards.

Tell your customers everything about your loyalty program. Don’t create a complex rewards page. Add fewer but very essential details. Remember, the reward stages should be self-explanatory for the customers. If they will earn say a pizza at 600 points, make it crystal clear for them. Easy-to-use and understanding loyalty programs will encourage them to frequently purchase from you and improve your customer loyalty.

4. Promote your Program

If you want customers to stay with you longer and be a part of your loyalty program, you need to make them aware of the same. Promote your loyalty program, and get the word out to as many people as possible. If they don’t know that your rewards program exists, they may not even enter it.

Promote it at the cashier desk. You need to tell them as soon as they enter that there is a program and you want them to enroll into it. Next on, you need to shout-out about this program on your social media.

Promote it along as many places as possible. When you talk about it, educate people regarding the same, then you will see more people joining your program.

Your program is a success only when there are more people added to it.


Customer loyalty programs are an excellent medium to retain your customers. By running a simple rewards structure, you can increase your retention rate and profits too. However, along with starting a loyalty program, you should make it more personalized and relevant to your customers. This way your customers will connect with you on a personal level and be motivated to be a part of your program. Start designing your loyalty program with Reelo by signing up for a 14-day free trial today.

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