Go Back Quickstart Guide to Loyalty

Which Types of Rewards Are Right for Your Loyalty Program?

Loyalty rewards and perks can vary greatly depending on your business goals, the products you sell, and the customer behaviors you want to motivate.

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Loyalty programs include many types of rewards and benefits, and deciding which ones are right for your business can be overwhelming. If you already have a loyal customer base, survey them to see what rewards matter most to them. In this lesson, we’ll go over the basic rewards and benefit options for loyalty programs to help you decide which ones would work best for you.

What customers want from loyalty

Yotpo research shows that what customers want most from a loyalty program (after free shipping and discounts) is early access to sales (60.1%) and early access to products (50.8%). But, it’s best to use these options as a guideline rather than a rule as you build your loyalty program — each brand is different.

Rewards for purchase behavior

Offering rewards for purchases is one of the most common ways to structure your loyalty program. Here are some different ways to do it.

VIP tiers

Customers progressively move up through levels as they spend more with your brand, with better rewards assigned to higher tiers.

Goal spend

Customers earn a reward for spending a certain amount, like free shipping on orders with a minimum purchase or free gifts with orders. This option leads to increases in average order value (AOV) and purchase frequency.

Points for purchase

Customers earn a certain amount of points per dollar spent, which can be redeemed for new products or discounts. This option increases member acquisition, cross-category product adoption, and AOV.

Punch card

Customers get a reward for making a certain number of purchases, similar to in-store punch cards. This option ensures customers come back throughout the year, grows AOV and LTV, and increases product adoption.

Rewards for engaging with the brand

You can also reward customers for engaging with your brand on different channels in ways that don’t require purchases. This will keep your customers engaged and your brand top of mind when dealing with low purchase frequency.

Here are some actions you can reward shoppers for:

  • Social follows
  • Newsletter sign-ups
  • Leaving reviews
  • Content engagement, like reading a blog or watching a promotional video
  • Referrals
  • SMS marketing sign-ups

What kinds of perks should I offer?

Rewards for purchases and engagement have become standard in customer loyalty programs. If you want to set yourself apart from the competition, you can do it by offering unique benefits, or perks, on top of rewards.

Here are some perks to consider:

Progressive points multiplier

As customers achieve higher VIP tiers, they earn more points with every purchase.

Experiential rewards

Customers gain exclusive access to in-store, virtual, or live events.

Free shipping

This can be given based on order minimums or to customers who achieve higher VIP tiers.

Concierge-level/personalized customer service

All customers should receive excellent customer service, but you can offer more personalized attention to your most loyal members, like a dedicated CS rep or access to a VIP CS team.

Early access to sales and new products

Customers who have achieved higher VIP tiers can access sales and products before they’re introduced to your entire customer base. By linking your loyalty program with SMS marketing, you can also personally notify VIP customers when these offers drop.

Discounts

There are many different ways to structure discounts, like on select days, for select products, or seasonally.

Birthday gift

Offering birthday gifts to your loyalty members is an easy way to make their experience more personalized.

Engaging, purchasing-driving rewards and perks are the hallmarks of any good loyalty program. Marketer-friendly loyalty platforms like Yotpo Loyalty & Referrals make it easy to test out different options until you find the system and structure that most resonates with your customer base.

Read the next lesson for advice on how to name your VIP tiers.

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