Category: Customer Data

What is Loyalty Marketing and How It Can Help Brands

What is Loyalty Marketing and How It Can Help Brands

Unlock the secret behind how loyalty marketing can drastically increase your brand value

Harwin Kaur

MarTech Blogger | July 02, 2023


In this ultra-competitive digital era, attempting to differentiate yourself from the crowd comes with its own set of unprecedented challenges. Brands are constantly striving to retain the attention of their existing customers while simultaneously trying to concoct unique methods to acquire new ones.

Enter: loyalty marketing, a powerful approach that has completely transformed the way in which businesses connect with their customer base. Leveraging loyalty marketing strategies can aid brands in forging stronger bonds with their customers, fostering brand advocacy, and ultimately gaining a competitive edge in the marketplace.

What is Loyalty Marketing

Loyalty marketing is a carefully curated strategy designed to retain existing customers by offering enticing incentives like exclusive perks, free rewards, and discounts. It’s an effective method for brands to express gratitude and reward the support of their valued patrons. With a focus on nurturing lasting relationships, loyalty marketing ensures that customers feel appreciated, valued, and motivated to stick around for the long haul.

Why Loyalty Marketing Is Important 

At its core, loyalty marketing is the secret ingredient that transforms ordinary customer-business connections into extraordinary, lasting relationships. Its primary aim is to entice customers and indulge them with an immersive experience. Additionally, loyalty marketing enables brands to collect valuable customer data through various programs, which can be leveraged for targeted marketing campaigns and personalized experiences. This results in an increase in customer lifetime value and ultimately boosts overall brand profitability.

Loyalty Marketing

A study conducted by Accenture revealed that businesses experience a significant surge in revenue, ranging from 12 to 18 percent, from loyalty program members compared to non-members. This shows the substantial impact loyalty marketing strategies have on driving higher revenue and highlights the significance of having a well-designed loyalty marketing strategy.

Loyalty marketing isn’t just about fleeting transactions; it’s about creating a symbiotic bond that caters to customers’ needs, desires, and aspirations.

Integrating it into your brand strategy is a game-changer that will  set your business apart from the rest, emphasizing the true power of long-term advocacy over short-lived transactions with both existing and new customers.

How to Incorporate Loyalty Marketing into your Brand Strategy

Acquiring a loyal customer base cannot be achieved overnight. Instead, it arises as a result of a personalized and well-designed loyalty marketing strategy. This nudges consumers to choose your brand over any other due to the strong affiliation they feel with it, looking past comparative factors like pricing.

This loyalty is nurtured through a series of positive interactions that establish trust over time. The ultimate objective is to transform customers into brand advocates, making loyalty a critical component of long-term business success. Enhancing customer loyalty not only sustains customer purchases but also amplifies brand advocacy to reach a new and wider audience. Below are some ways to achieve this:

Loyalty Programs

Loyalty programs are arguably the most important aspect of loyalty marketing as they provide a structured framework to incentivize and reward customers for their repeat purchases. These personalized programs are curated to create a sense of exclusivity and appreciation for loyal customers, encouraging them to choose your brand consistently. There are several types of loyalty programs with a slew of different offerings. 

One type of loyalty program is focused on tiered rewards, where customers are placed into different tiers based on their level of engagement or spending. As customers ascend through the tiers, they unlock increasingly attractive benefits and privileges. This tiered structure creates a sense of progression and aspiration, driving customers to reach higher levels and enjoy exclusive perks reserved for top-tier members. 

Another type is a points-based loyalty program, where customers earn points for each purchase they make. These points can then be redeemed for various perks, including but not limited to discounts, free products, or exclusive experiences. This provides a sense of accomplishment for customers as they accumulate points toward valuable rewards. This is just the tip of the iceberg when it comes to the thousands of loyalty programs that brands across the globe have designed.

Social Media

Social media platforms like Instagram and Facebook play a vital role in loyalty marketing by allowing brands to directly connect with their customers. A study by Sprout Social revealed that 91 percent of consumers believe social media has the power to connect people. Additionally, 78 percent are in favor of brands using it to bring them together.

Social media platforms can be leveraged to share exclusive content like behind-the-scenes glimpses, sneak peeks, or exclusive promotions. This creates a sense of exclusivity, strengthening the bond between the brand and the customer.

Additionally, social media platforms serve as communication channels to provide customer support. Brands can address inquiries, resolve issues, and offer assistance in a timely manner, showcasing their commitment to customer satisfaction. By facilitating interactions between customers, brands can strengthen their connection with customers. Overall, actively engaging with customers on social media platforms will allow your brand to establish trust and value customer input, fostering brand loyalty. 

External Partnerships

Developing external partnerships with other merchants is a highly effective strategy in loyalty marketing. By collaborating with complementary brands, businesses can expand their offerings for customers and attract a new audience. One way to do this is to collaborate on a joint loyalty reward program which will allow customers to earn and redeem rewards across both brands. This encourages cross-purchasing and boosts customer engagement. 

Additionally, cross-promotion can be an efficient tool to be used to leverage each other’s customer base and reach a new demographic. Some ways to achieve this can be through organizing joint marketing campaigns and collaborating on content creation. Such partnerships strengthen brand loyalty by providing customers with more value, variety, and unique experiences. Strategic collaboration enables brands to expand their reach, tap into new markets, and build stronger connections with customers, resulting in long-term success.

What You Should Know

In conclusion, loyalty marketing is a transformative strategy that drives brand advocacy by fostering strong customer-brand relationships. By implementing personalized loyalty programs, harnessing the power of social media platforms, and forging external partnerships, businesses can achieve sustainable success in the long run.

If you’re interested in diving into the world of loyalty marketing, consider the self-serve Perx Platform which empowers businesses to transform fleeting customer interactions into long-lasting bonds through the synergy of behavioral science and adaptive AI. Book a demo today to discover how the Perx customer loyalty and engagement platform can elevate your brand strategy.

Recommended for you


Global businesses have driven over 5 billion customer-brand interactions on Perx.

Ready to join them?


4 Top Benefits of Loyalty Programs

Top 4 Benefits of Loyalty Programs

Give your business an edge in the current market by unlocking the potential of loyalty programs

Harwin Kaur

MarTech Blogger | June 23, 2023


Businesses often get swept up in the pursuit of new customer acquisition to boost brand awareness, expand their customer base, and drive up sales. While these are important goals, it’s equally important not to overlook the value of existing customers. It has been proven time and again that loyal customers contribute just as much, or even more, to a company’s overall profitability. 

Bain & Company, theorizes that a small 5% rise in customer retention rates can result in a significant 95% boost in overall profitability. This highlights the crucial importance of prioritizing the retention of existing customers for businesses that aspire to achieve long-term success and maximize their profits. This raises the question: how can businesses develop strategies to hold onto these customers? The answer is simple – implementing a loyalty program. 

However, before diving into the manifold advantages of such programs, it’s crucial to understand what a loyalty program is.

What are Loyalty Programs?

A loyalty program aims to cultivate repeat business by offering incentives such as discounts, reward points, or exclusive perks. Through this, businesses encourage continuous customer engagement with their brand. To create an effective loyalty program, businesses should prioritize customer preferences in their marketing efforts. This approach enhances customer satisfaction and builds long-term relationships, providing a competitive edge. Customers feel valued as they receive personalized rewards for their spending, making them more likely to pledge loyalty to the brand.

The term “loyalty program” is broad and can be customized to fit a business’s needs and preferences for its customer base. However, certain types of loyalty programs have been widely adopted with a proven track record of effectiveness. These include: 

  1. Points-based systems where customers redeem points earned for rewards such as discounts, free products, or exclusive experiences
  2. Tiered programs which allow customers to move up through different tiers based on their level of engagement with the brand, with each tier offering more exclusivity and valuable rewards
  3. Game-based programs where customers can engage with the brand to earn rewards by playing games or completing challenges 

Effective loyalty programs often adopt a hybrid system that combines different types of the above engagement tools and rewards to offer a more diverse range of benefits to customers. 

By implementing a loyalty program, businesses can leverage the fundamental factors that drive customer loyalty. A study by Bond Brand Loyalty found that loyalty program members are 70% more likely to spread the word about a brand than non-members. The proof is clear as day (or in this case, the statistics). Not only do customers receive rewards for promoting the business, but they also organically perform acquisition marketing on behalf of the business! 

Key Benefits of a Loyalty Program 

Now that we’ve established the significance and value of loyalty programs for businesses, let’s delve into some of the top benefits of implementing one.

◉ Cost-Effective Strategy 

Acquiring new customers typically involves investing a significant amount of resources in marketing and advertising campaigns to generate potential customers. This can include activities such as email marketing, paid search ads, and social media campaigns among other forms of promotion. Conversely, retaining existing customers entails providing them with a positive customer experience, personalized communication, and loyalty rewards to continue doing business with the company. 

Research shows that acquiring a new customer can cost 5-25 times more than retaining an existing one, depending on the industry and customer segment. Additionally, existing customers are more likely to make repeat purchases, refer others to the business, and spend more even during economic downturns. Therefore, boosting customer retention rates through loyalty programs can be a cost-effective strategy for businesses.

◉ Build a Customer Base that Values Your Brand Beyond Price

Customer loyalty programs help businesses differentiate themselves by connecting with customers’ emotions and offering a more personalized experience. Businesses can build a strong bond with their customers by gathering and acting on feedback, constantly communicating, and focusing on curating a pleasant customer experience, which demonstrates their value for the customer’s opinion. Giving customers that extra attention a personalized experience is particularly important in today’s market, where the ease of being able to compare prices between competitors has given rise to customers that are more price sensitive than ever. 

By appealing to customers’ emotions through customized rewards and recognition, businesses can build stronger bonds with their customers who feel appreciated and encourage repeat purchases. Loyalty programs encourage customers to become less price sensitive and focus more on the curated experience provided by the business. This will allow them to recognise the brand’s value and nudge them to pay a premium, thus giving the business a competitive advantage.

◉ Acquire Valuable Customer Data

An often-overlooked benefit of loyalty programs is that they provide businesses with an opportunity to gather valuable data about their customers. By tracking customer behavior and preferences through the program, businesses can gain insights into their customers’ purchasing habits, preferences, and interests. This information can help businesses tailor their marketing strategies to better meet the needs of their customers.

Additionally, the data gathered through loyalty programs can help businesses identify patterns or trends in customer behavior over time. This information can be used to make more informed decisions about future product development, pricing, and other relevant business strategies.

◉ Build Loyal Brand Ambassadors

Loyalty programs help to unlock the power of existing customers and turn them into committed brand ambassadors. They transform an average customer into a business’s most valuable asset – one that can spread the word about the brand and its products to their trusted network. This generates more revenue for a business through word-of-mouth recommendations than any advertising or marketing campaign can. 

Advocacy is the most powerful marketing tool. A loyalty program assists in creating a network of advocates that will not only stick with the business but also actively promote it. By providing incentives for referrals, a business can demonstrate the value it places on existing customers while attracting new ones. 

Factors to consider

Developing a successful loyalty program involves careful consideration of several areas: 

  • It is crucial to define the program’s primary objective, such as improving customer retention or driving sales. Setting specific and measurable goals will help to design a program that aligns with your business objectives.
  • Determining the program’s type is essential, whether it will be tier-based, game-based, or a hybrid, and make decisions regarding rewards in advance. This includes defining how customers can earn points or advance through different stages, as well as establishing clear guidelines for redeeming their rewards.
  • To ensure the success of your loyalty program, it is important to focus on effective promotion. Consider carefully strategizing your communication and marketing efforts to deliver a message that emphasizes the program’s benefits. This can be achieved through utilizing a range of marketing channels, including social media and email to create awareness and actively encourage customer participation.
  • Lastly, it is critical to consider setting a sustainable budget to ensure stability and avoid loyalty debt. This can be done by evaluating the estimated costs associated with implementing the loyalty program and calculating the expected return on investment. 

In conclusion, executing a well-designed loyalty program is crucial in allowing businesses to curate and expand a fiercely loyal customer base for sustainable success. Personalizing and tailoring the program to match the needs of its target audience is the key to its effectiveness.  

Consider starting your journey to a robust loyalty program with The Perx Platform, that promises to supercharge user acquisition and enhance customer retention rates. Request a demo today to witness all its unique features and functionalities, and explore how you can use them to your advantage!

Recommended for you


Global businesses have driven over 5 billion customer-brand interactions on Perx.

Ready to join them?


Design customer centric campaigns for enhanced Loyalty

ACQUIRE & ACTIVATE

Immerse new audiences

into an interactive experience

Adopting a gamified rewards loyalty program helps insurers differentiate themselves and gain an edge in an industry rife with competition

Amrith G, SVP | Marketing & Customer Analytics

Journey Popularity Index:

The Rationale

Adopting a gamified rewards loyalty program helps insurers differentiate themselves and gain an edge in an industry rife with competition. It helps in influencing customer behavior for personalized marketing and boosting consumer engagement.

The Benefits

Gamified experiences, such as quizzes, awakens user excitement and competitive spirit. This helps to drive engagement, satisfaction, and eventually word-of-mouth & acquisitions via referrals.

Ideally Suited For

Industry: Insurance
Customer base: > 50k user base
Mobile app: Yes
Existing Loyalty program: Not a must
Drive multi-actions: Yes

Key Performance Indicators

No. of New Users
User Engagement Rate
User Acquisition Cost

Targeted First-Party Data Collection

Edgar sees an enticing personalized Facebook ad promising an instant reward upon completion of a survey

1

Action 1: Umbrelife Microsite

Intrigued, Edgar clicks on the link in the ad and is directed to the Umbrelife microsite where he sees the carefully designed Perx survey

2

Action 2: Perx Powered Survey

Enticed by the reward, Edgar fills in the survey, providing valuable customer data, including his lifestyle details, which will aid Reluze in targeting and appealing to his with a custom policy and thereby increasing the chances of his conversion to a customer

CUSTOMER ACQUIRED

3

Instant Gratification

Upon completion, Edgar is immediately informed via an SMS notification to undergo an interactive experience to claim his reward

4

Gamified Reward Redemption

Edgar is thoroughly engaged with a gamified mechanic to unlock and gain access to his reward

CUSTOMER ENGAGED

5

Pleasant Surprise

Edgar is pleased and satisfied to see a Starbucks voucher for a free drink awaiting him and looks forward to other future offerings

6

Explore more Use Cases

Global businesses have driven over 5 billion customer-brand interactions on Perx.

Ready to join them?

Feedback From

Our Customers

Recommended for you

Welcoming Banks to the mobile-first instant gratification economy

Welcoming Banks to the mobile-first instant gratification economy

Amrith G
VP, Marketing | February 13, 2020


Too late! That is how large enterprises traditionally have responded to disruptions.

If you look at historic data just from the last 60 years, the least critical way of answering this question would be ‘not quite effectively’ Richard N foster in his book, ‘Creative Destruction’ proves the same by quoting ‘The life span of a company back in 1958 was 61 years and in 2018 it reduced to 18 years.’ In the next 7 years 75% of companies in the S&P 500 index are expected to be replaced by new emerging challengers in each industry.

The category of companies in the crosshair of displacement are the large B2C enterprises who serve the millions of end consumers – the you and me of the world.

Focusing on the Banking industry. 47% of key banking transactions such as C2C and C2B payments, funds transfers and personal loans have been executed by fintechs and digital payment gateways. The wedge that the Apple and Google Pays of the world have pegged between the banks and their millions of end customers is a sizeable one and if not addressed it is only bound to grow exponentially en-route to erode a bank’s profit margins, 1 micro percentile at a time.

In the era of fintechs and the shift towards digital and virtual banks, the one who holds the key to last-mile customer data becomes the victor by default. Last-mile customer data is the new oil, and the trick to master and acquire it is in how closely you position yourself as an enterprise to your consumer – This translates to how much of the customer’s mobile mindshare does your brand, products and services enjoy? With over $100B invested in existing and new mobile-first fintechs globally every year, the wedge between traditional banks and their customers will turn into a larger crevasse.

So how can banks respond to these disruptions? The customer engagement and loyalty platform from Perx enables large B2C enterprises across Banking and other core verticals to reduce this wedge. With the majority of Perx customers represented by Banking & FSI, Perx facilitates them to get back in the driver’s seat by intelligently incentivising its customers for every action and interaction they have with their bank. Let’s face it, in this instant gratification mobile-first economy, the one who conquers your smartphone has the map to succeed.

By arming marketers in the banking industry with a platform that drives not just vanity metrics such as likes and shares but ‘true top-line growth’ through revenue generating customer actions, Perx enables banks to conquer last-mile customer data and interactions – reversing the growing wedge into a disappearing crack.

The Perx-Oracle partnership delivers the sharpest tool in the marketing armoury that banks have long needed.

Leandro Bark, Head of Partnerships, Perx

Perx’s partnership with Oracle and its Open banking APIs initiative helps address and solve this problem at lightning speed. With over 1200+ global banks trusting Oracle Core banking systems, they now get a chance to take the fight back to disruptions such as the mobile-first customer, fintechs and the rest of the herd.

The Perx platform integrated with Oracle open banking APIs allows banks to instantly drive customer transactions, increase credit card spend, reduce loyalty debt and drive meaningful customer engagement all with instantly rewarding customers for doing so.

Our partnership with Perx enables banks to conquer the elusive last-mile in customer engagement.

Sanjay Mathew, Senior Director, Oracle Financial Services

Singapore’s largest bank drove S$ 24 Million in net new credit card spend on a single customer engagement onboard the Perx platform in a matter of 14 days. The largest bank in Philippines drove $64 Million in net new transactions over a week through a dynamic, gamified customer engagement campaign, and one of Singapore’s largest telco increased its daily engaged customers by 110x in the first 60 days of onboarding Perx.

Learn more about Perx. Connect with us to find out how Perx + Oracle can help you drive top-line growth for your company.

Recommended for you


Global businesses have driven over 5 billion customer-brand interactions on Perx.

Ready to join them?