15 Customer Incentive Programs & How to Boost Their Results

The idea of running loyalty incentive programs to attract and retain customers has become very popular now. To keep up with the competition, brands are providing their customers with more rewards and incentives than ever before. Studies suggest that consumers are more likely to stay loyal to a brand that offers more rewards and discounts. However, rewards and other perks are not the only factors that contribute to building brand loyalty. Even running a charity-based or community-based program is a very effective strategy. Here is the list of some top customer incentive program ideas:

1. Cashback Programs

In cashback-based loyalty incentive programs, customers get a percentage of their spent amount back. If you run a cashback program, you can fix the percentage of cashback that your customers earn on each purchase. In most cashback-based incentive programs, the percentage of cashback increases as spending increases.

For example, you can offer a 3% cashback on spends up to Rs. 1,000, 5% cashback on spends between Rs. 1,000 & Rs. 3,000, and a 10% cashback on spends beyond Rs. 3,000. After your customers pay the bill, credit the cashback via their preferred payment mode. When they receive a percentage of their spending back, they are encouraged to purchase from you again in order to save some money.

2. Discount-Based Programs

Discount-based programs are very effective in retaining loyal customers and encouraging them to make more frequent purchases. In this type of loyalty program, you can offer your customers a discount coupon after every purchase they make. This discount coupon can either be redeemed against their current purchase or they can save it for future purchases. However, offering discounts for future purchases with a limited period of validity is a better idea. Just like the cashback-based programs, you can increase the value of discount coupons as the spending of your customers increases.

3. Loyalty Points

Customer incentive programs that offer loyalty points are among the most widely used loyalty programs. Under a loyalty points-based program, customers earn some form of reward points after every purchase they make. The percentage of loyalty points is fixed by the brand and customers get rewarded accordingly. These reward points can later be redeemed against various options that are provided by the respective brand. When running a points-based loyalty program, you must ensure that you offer valuable rewards and provide some interesting redemption options against them. One of the biggest reasons why many points-based loyalty programs fail is that they don’t offer valuable rewards or useful redemption options.

4. Store Credit

Store credit-based loyalty programs are similar to cashback programs. In this, you offer a special kind of cashback that can only be used against your store purchases. Therefore, it’s like offering small discounts for future purchases. Many e-commerce companies are using this loyalty program to boost their customer retention rates. You can create a separate loyalty portal for your customers. Every time they make a purchase, the eligible store credit points are credited to their loyalty portal and they can redeem it any time they want.

5. Tiered Reward Programs

Tier-based loyalty incentive programs have also gained significant popularity in the last few years. In a tier-based loyalty program, there are different levels of loyalty and customers earn higher rewards with every increasing level. These programs are generally divided into three or more tiers. The more a customer purchases, the higher tier they get promoted to. As they enter a higher tier, they get a higher reward rate and also some additional benefits. These programs are effective in motivating customers to spend more in order to earn higher benefits.

6. Charity-Based Reward Programs

Charity-based reward programs are very similar to loyalty points-based ones. In this program as well, customers earn reward points after every purchase they make. The only difference is that the reward points here are redeemable only against charity donations. Many consumers prefer brands that take social causes into consideration. By allowing your customer to donate to charity without spending a single extra penny, you can create a big impact. Just make sure you provide multiple charity options so your customers can donate to a social cause of their choice.

7. Choice-Centred Loyalty Programs

These loyalty programs are rare but interesting. In a choice-centered loyalty program, you can allow your customers to choose rewards of their choice. They can choose to earn any one of the reward points, cashback, or store credit. Not every customer might be interested in the hassle of earning reward points and redeeming them. Some may prefer loyalty points and others might like to earn cashback or store credit. By running a choice-centered customer incentive program, you can give your customers the flexibility to get rewarded as they want.

8. Gamified Reward Programs

Gamified reward programs are loyalty incentive programs combined with gamification strategies. You can run leaderboards contests on social media, ‘spin the wheel’ contests on your website, sweepstakes, top spenders offer, etc, to improve customer engagement and boost loyalty. Including gamification strategies in your loyalty program is one of the best ways to make your program exciting for your customers. A loyalty program is successful only when customers are interested in it.

9. Subscription-Based Programs

These are paid loyalty programs, under which customers need to pay a fee in order to avail of the program’s benefits. However, subscription-based programs do not work for every business. Before implementing a paid loyalty incentive program, you must ensure that your customers are really interested in the rewards you are offering. A good idea is to include a paid and an unpaid version in your loyalty program. Customers can either choose to earn basic rewards by opting for the free version or they can earn more premium rewards by opting for the paid program.

10. Spend-Based Rewards

Spend-based reward programs work amazingly when your goal is to make your customer spend more every time they visit your store or website. You can run a spend-based rewards program, where customers do not earn rewards on every purchase but they get rewarded only on spending beyond a certain amount. You can include multiple spend thresholds and add different rewards for each spend threshold. For example, your customers get a 15% discount on spending Rs. 2,000 or more, a 20% discount on spending Rs. 5,000 or more, and a 30% discount on spending Rs. 10,000 or more.

11. Rewards for Top Spenders

Along with your continuous rewards or cashback-based loyalty incentive program, you can run top spenders’ offer. Under this, customers who spend the maximum amount in a month or quarter are rewarded with some premium gifts. You can choose the top three spenders of the month or quarter and gift them some free products from your brand or even from some other brand. Many e-commerce brands run such offers, where top spiders can win premium gifts such as free TVs, mobile phones, earphones, etc.

12. Referral Rewards Program

A referral program is not just a great way to expand your customer base but is also very effective in boosting your customer engagement. In a referral program, you ask your customers to refer a friend and get rewarded for each successful referral. To make your program more interesting for your customers, you can add different levels to it. For example, offer them a 5% discount coupon when they refer a friend, a 10% discount coupon when the friend signs up, and finally, a 25% discount coupon when the friend makes his/her first purchase.

13. Early Access to Sales

It is not fair to treat your loyal customers equally to the non-loyal ones. Loyal customers are valuable and you must show them that you value them more. One of the best ways to do it is to provide them with early access to the sales and discount offers at your store or website. If you are launching a three-day flash sale, give your registered users access to it 24 hours earlier than the actual start time of the sale. This doesn’t only make your existing customers feel valued but also encourages non-registered users to register on your website.

14. Community-Based Programs

As the name suggests, community-based programs are not just about offering rewards or loyalty points but creating an online community of customers who share the same interests. You can build an online platform where customers can accumulate rewards and also share their views with each other. Building an online community is another great way to encourage loyalty among your customers. Once they join your brand’s community, they consider themselves an important part of your brand and are more likely to stay loyal.

15. Free Perks Programs

Everyone loves free gifts. If the rewards or cashback-based programs do not seem exciting to you, you can simply go with a free perks-based loyalty program. Every time your customers make a purchase, you offer them something for free. The free gift can be as small as a hair clip to as large as a travel bag from some premium brand. Based on the spending made by your customer, you can provide them with free gifts and motivate them to come back to your store.

Run Your Loyalty Incentive Program With RewardPort

To build an effective and suitable loyalty program aligning with your business requirements, you need to put a lot of time and effort into it. This is why partnering with loyalty program companies like RewardPort is always a good idea. RewardPort is one of the top reward and loyalty solution providers in India. The team of experienced marketing professionals at RewardPort analyzes all your business needs and comes up with effective loyalty solutions that work for your business.