What are the Benefits of Loyalty Programs?


Loyalty programs are a great tool for modern businesses, but you might not know exactly how they can help. In this article, we examine the key ways a loyalty program benefits your company. However, first let's listen from our Head of Business Development Josh.

When given the choice, most businesses would rather gain a new customer than retain an old one. Almost two thirds of companies have become more focused on customer acquisition since 2018. However, is this the right strategy? After all, it’s been known for a while that acquiring a new consumer is between five and 25 times more expensive than retaining an old one.


While new customers are essential, companies need to look more into keeping the ones they already have. One of the best ways to do this is through a loyalty program. Rewarding your loyal customers with points and discounts is a great tactic to keep them coming back and spending more. Here are a few of the benefits of loyalty programs to your business.


Retain more customers

Naturally, the most important benefit of having a loyalty program is customer retention. A loyal customer is someone who will keep making purchases for years, and loyalty programs are designed to help achieve this. Over 80% of consumers say loyalty programs make them more likely to continue doing business with a company, which shows how effective they can be.


This is even more likely for younger customers. A recent study found that 80% of Gen Z consumers increase the frequency they buy from a brand when they are part of that company’s loyalty program. In comparison, this is the case for 76% of Gen X customers and 53% of baby boomers.


If one of your key marketing goals to work on is improving customer retention, don't hesitate. A well-designed loyalty can do wonders.

Over 80% of consumers say loyalty programs makes them more likely to continue doing business with a company.


Personalise your marketing

One aspect of loyalty programs that often goes unmentioned is how useful they can be for marketing. Nowadays, customers face a sea of adverts, emails and social media messages trying to sell products and services. In order to stand out, one of the best tactics is personalisation.


Around 90% of people find personalised marketing appealing. 80% even say it makes them more likely to do business with a company. Of course, in order to offer personalised marketing, you need data on your loyal customers. A loyalty program gives you access to this information, especially if done via an app. It offers detail on customer purchases and behaviour that you can use to tailor your marketing directly to them.

In order to offer personalised marketing, you need data on your most loyal customers.

How to personalise your loyalty program?

Read Our Guide

Build your brand

Loyalty isn’t just about rewarding customers; it’s also about building a brand. You can use a loyalty program to showcase your core values, mission and more. A rewards app, for example, could be used to send discounts connected to important holidays or social movements. Importantly however, you can create deeper emotional connections with customers, leading to true brand loyalty.


This is something that appeals strongly to customers. More and more consumers base their spending decisions on common beliefs and values. Don't forget that a loyalty program can be a key communication tool. Being able to show and reinforce what your business stands for through a loyalty program is a great way to give people a clear picture of who you are.

Use your loyalty program to build rapport with your customers and contribute to your branding efforts.


Increase your profits

Last but not least, a key benefit of loyalty programs is increase in revenue. Every business wants to make more money and this strategy is no different. All of the above will contribute to this, and loyalty programs are a proven way to increase your profits. Your most loyal customers are also the ones who spend the most. It’s thought that the most loyal 15% of consumers generate between 55 and 70% of a company’s sales.


It’s been known for years that increasing customer retention rates by five per cent can raise profits by up to 95%. Loyalty programs are a clear and effective way to achieve this. If you’d like to start up your own loyalty program - or improve an existing one - you can get in touch with us here to see how we can help.

The most loyal 15% of customers generate between 55 and 70% of a company's sales.

Read more on how your business can increase revenues via loyalty programs by downloading our white paper!

Download White Paper


These were just some of the most important benefits of loyalty programs that your business should consider. However, creating a loyalty program can have many other benefits, including 1st party customer data, reduced customer churn and more. This is always depending on the type of strategy that a business adopts.


If you would like us to help you form the right customer loyalty strategy, please don't hesitate to contact us for a consultation.



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Kristyna Efferoth

Kristyna Efferoth

Marketing Manager

Kristyna is our Marketing Manager. She helps White Label Loyalty reach the right businesses in need of a loyalty program and helps our clients' programs reach their full potential. She loves sharing her varied experience in marketing and loyalty by writing helpful resources on the blog from time to time for all loyalty novices and aficionados alike.

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Loyalty Programs
Customer Loyalty
Customer Retention
Customer Engagement
Loyalty Programmes
Loyalty Strategy
Personalised Rewards
Digital Strategy
Brand Strategy
Brand Building
Customer Data