eIQ Insights: Providing a Loyalty Program that Actually Keeps Customers Loyal


Loyalty programs are one of the oldest tricks in retail to get customers to continue shopping.

Members of these rewards, points or cash-back programs tend to generate 12%-18% more revenue for retailers than customers without membership.

The existence of a loyalty program is also a deciding factor for 72% of customers when choosing where to shop.

However, running one can be a considerable investment. In the US, companies spend $50 billion a year on these programs alone.

And just because a company has one doesn’t mean they always add value – some companies with loyalty programs reported a 2.28 percent comp sales increase, while companies without reported a higher 4.26 percent.

To ensure the effectiveness of a loyalty program, brands need to consider a number of factors and understand that there needs to exist a value proposition that addresses the needs of both the consumer and the brand.

loyalty program retail

Retailers need to consider different value factors that fits their objective for the loyalty program. Source L2

Important value factors for an effective loyalty program

Although monetary incentive is still the main drive for 67% customers to join a loyalty program, non-monetary benefits can distinguish the brand from others.

Offering a tiered loyalty program that provides differentiated rewards based on spend allows for more customer segmentation and targeted marketing as well as add interest and incentives for customers.

Giving exclusive access to the brand’s special promotions and offering an overall higher priority service for the members are the kind of personal experiences that customers look for when they joining a loyalty program.


Discounts tend to be the most popular loyalty features but only lift a considerably low points of consumer satisfaction factor. Source: L2.

Having a loyalty program, if done right, could actually lead to the biggest revenue generator for a company and lower the user acquisition costs. Amazon Prime by Amazon is one of the best examples.

In addition to offering Prime members the usual perk of free shipping, Amazon also holds an annual sale exclusively for Prime members called Prime Day. This year, the company broke its sales record by 60%

compared to the same period last year, selling most of its private label brands and highest number of new members sign up.

No wonder the ‘Amazon of Southeast Asia’ launched its own version of Amazon Prime called LiveUp.

Southeast Asia’s companies better ensure they have strong tactics in place to keep their customers loyal because the US retail giant is about to launch in Singapore in the very near future.