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7 Loyalty Incentives To Make Customers Feel Special

7 Loyalty Incentives To Make Customers Feel Special

You’ve heard it time and time again: attracting new customers can be up to 25 times more costly than retaining existing ones! Indeed, keeping customers engaged and coming back is the backbone of running a sustainable business. This is where loyalty incentives can help. 

By offering strategic loyalty rewards, you can demonstrate your appreciation for your existing customer base and create long-term connections that drive repeat business. In a highly competitive market, this is what can set your brand apart. In this complete guide, we’ll walk you through everything you need to know about loyalty rewards.

So, let’s get right into it, shall we?  

What Are Loyalty Incentives?

Loyalty incentives are the strategic perks or rewards you offer to customers to make them feel valued, encouraging them to stick around. They come in many forms (which we’ll get into later), such as exclusive discounts, free products, and store credits. Whatever you choose to use for your business model, the goal is the same: to make customers happy and keep them coming back.

What Are The Benefits Of Loyalty Incentives?

So, is it worth it to offer loyalty rewards? Here are the key benefits they bring to your business: 

  • Improved customer satisfaction: Providing rewards is tangible way to show your appreciation for customers. When shoppers feel valued and appreciated, their overall satisfaction with your business increases. This brings us to the next advantage…
  • Enhanced customer retention: Simply put, happy customers are more inclined to stick around and choose you over competitors. 
  • Better marketing ROI: Implementing strategic loyalty rewards helps improve customer retention, which increases the lifetime value of your existing customer base. As a result, you get a higher return on investment (ROI)  for your marketing spend. It also reduces the need for constant customer acquisition efforts, which can be up to 25 times as costly.
  • Increased average order values: Some types of loyalty rewards (such as tiered loyalty incentives) motivate customers to spend more. To qualify for the reward, they may be more likely to add more items to their carts, which directly boosts your average order values. 
  • Gain valuable customer insights: As a business owner, it’s crucial to understand what drives your customers. Running loyalty programs allows you to gain valuable customer data, such as their purchase behavior, preferences, and engagement trends. This knowledge can be used to personalize marketing strategies and promotions, making them more effective. 

7 Effective Loyalty Incentives To Reward Customers 

After discovering the key advantages of offering loyalty rewards, you’re probably excited to incorporate them into your marketing strategy. The good news is, you have a lot of options to choose from, depending on your business goals. 

In this section, we’ll walk you through some of the most compelling loyalty incentives examples to keep customers engaged and strengthen their loyalty to your brand. We’ll also introduce you to powerful plugins that will make implementing these strategies easier. So, let’s dive in! 

1. Discount-based incentives

Discount incentives come in many forms, making them a straightforward and versatile option for business owners. For instance, you can offer percentage-off discounts, fixed-amount deals, and even shipping discounts. Because they offer immediate savings for each purchase, they’re easy to understand and are highly motivating for customers. 

IMPORTANT: When crafting discount offers, it’s crucial to set reasonable restrictions to avoid over-discounting and protect your profit margins. 

Plugins like Advanced Coupons, for instance, allow you to set advanced cart conditions to define when and how coupon discounts should apply. You might want to limit the discount to a minimum purchase amount or restrict it to VIP customers, or certain products. Having these restrictions in place will ensure your discounts benefit both you and your customers.

Advanced Coupons Premium, showcasing feature likeBOGO deals, store credit, and cart conditions
With Advanced Coupons, you can set advanced cart conditions to ensure coupons only apply under set conditions.

2. Tiered loyalty program rewards

Traditional loyalty rewards are typically the same for all customers. However, in a tiered loyalty system, customers unlock better perks and rewards as they reach a “higher tier”. This happens as they spend or engage more with your business. It’s an excellent loyalty program business model that encourages long-term engagement and higher spending. 

In tiered loyalty programs, customers are often categorized based on their spending levels or engagement with your brand. A good example of this is Sephora’s Beauty Insider and Lancôme’s tiered loyalty program, where shoppers unlock greater perks as they spend more, leave reviews, and more.

Lancôme’s tiered loyalty program, featuring tiers like Rose Gold, Gold, and Platinum
Example of a tiered loyalty program (Image Source:  Lancôme’s official website)

Advanced Coupons’ WooCommerce Loyalty Program makes setting up a loyalty program a breeze for store owners. With this plugin, you can easily set up a points and rewards system and grant points to customers for purchases, leaving reviews, creating an account, and more. This makes it easy to reward loyal customers and keep them coming back.

3. Free gifts with purchase

Who doesn’t adore a free gift? It’s one of the most popular incentives that businesses use to reward customers. There are also several ways you can incorporate this tactic into your promotional strategy. 

A tried and tested tactic is setting up BOGO (Buy One, Get One) deals that automatically add a free item to your customer’s cart. Plugins like Advanced Coupons allow you to set up BOGO coupons in WooCommerce that trigger when certain cart conditions are met. This gives you better control over your free product promotions.

Sleep Country's BOGO offer for pillows
Example of a BOGO offer (Image Source: SleepCountry)

4. Store credits

Another reward you can consider offering to customers are store credits. Store credits are a flexible virtual currency that customers can use for future purchases in your store. Unlike typical discounts, they allow customers to choose how and when they’ll redeem their rewards. 

There are several ways you can leverage these type of reward as a business owner. For instance, you can: 

  • Grant store credits as a reward for reaching a certain order amount
  • Provide referral bonus store credits for customers who refer others to your store
  • Compensate customers for refunds or returns 

Store credits can help encourage customer patronage as they can only be redeemed in your store. By granting store credits, you encourage customers to keep coming back to make future purchases. This fosters customer loyalty, which is good news for your bottom line.

5. Gift cards 

Gift cards are not just an excellent way to appeal to shoppers during holidays and special occasions (because they’re fantastic gifting options), they’re also a great incentive for loyal shoppers. 

By incorporating gift cards into your loyalty rewards program or marketing initiative, you provide existing customers with an “incentive” they can redeem on their own terms. Much like store credits, gift cards allow customers to choose the products they want to buy from your store, adding an element of personalization to their shopping experience. 

Disney gift cards
Example of a gift card promotion Image Source Disney

WooCommerce store owners can leverage plugins like Advanced Coupons’ Gift Cards to offer customizable gift cards in their stores. With this plugin, you can create gift cards, sell them, or use them for loyalty rewards and special promotions. 

6. VIP exclusives 

The key to fostering customer loyalty is making your shoppers feel valued and special. What better way to do this than with exclusive perks and experiences? There are several strategies you can explore and implement, including: 

  • Early access specials: If you’re running a loyalty program, you might want to provide your valued “insiders” with exclusive early access to product launches and sales. This gives them the opportunity to shop before regular customers, strengthening their relationship with your business. 
  • Special events: Consider hosting exclusive events for your VIPs or insiders. These events could be anything from in-store product launches, exclusive shopping sales, or even virtual question-and-answer sessions. Apart from engaging your customers, these events foster a sense of community, which can deepen their relationship with your business. 
  • Exclusive collections: Another worth exploring is offering limited-edition products exclusively for customer loyalty program members. This makes VIP clients feel special, knowing they can access products that are not publicly available to regular shoppers. Some industries that will likely benefit from this tactic include fashion, beauty, and tech, where exclusive collections can help enhance brand loyalty. 

7. Cashback incentives 

A more practical alternative option to explore when rewarding customers is providing cashback rewards. Cashback incentives allow customers to earn back a percentage of their purchase, which they can then spend on future orders in your store. It’s a smart way to keep customers coming back, without necessarily giving them an upfront discount.

Frequently Asked Questions

What is a loyalty reward?

Loyalty rewards (or incentives) are the exclusive perks and privileges businesses offer customers to keep them engaged and encourage future purchases. This can take many forms, including (but not limited to) coupon discounts, store credits, free gifts, and exclusive experiences. Incorporating loyalty rewards into your marketing strategy can help build loyalty and strengthen your relationship with customers. 

How to incentivize customer loyalty?

Common tactics include setting up a loyalty program, providing discounts, or offering exclusive perks for repeat purchases. Plugins like WooCommerce Loyalty Program allow store owners to easily set up a points and rewards system in WooCommerce, so store owners can reward customer actions like purchases, leaving reviews and more.

How can I offer gift cards as a loyalty reward?

Consider offering gift cards as perks for joining your customer loyalty program or as a reward for achieving certain customer milestones. They can also be given to successful referrals, or during special occasions, such as birthdays, to make your customers feel valued. 

Conclusion 

If you want to keep customers hooked and coming back for more, then consider incorporating loyalty incentives into your marketing strategy. These exclusive perks encourage repeat orders and boost customer engagement, allowing you to build customer loyalty in the long haul. In this guide, we walked you through the key benefits of loyalty rewards. We also explored some key tactics you can use, including: 

  1. Discounts-based incentives
  2. Tiered loyalty program rewards
  3. Free gifts with purchase
  4. Store credits
  5. Gift cards
  6. VIP exclusives
  7. Cashback rewards

Fortunately, it doesn’t have to be a daunting task to implement these strategies. With tools like Advanced Coupons, you can easily create customized coupon deals to reward customers. The suite also includes our Loyalty Program and Gift Card plugin, allowing you to set up a points and rewards system in WooCommerce and sell digital gift cards. 

Do you have any questions about this topic? Let us know, we’re here to help! 

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Kathren Kelly Writer, Content Manager
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