What are hybrid loyalty programs and why should you care?

Hybrid loyalty programs are becoming more and more popular among businesses. This article explains what hybrid loyalty programs are and why they're so useful for both brands and customers.

What is a hybrid loyalty program?

Put simply, a hybrid loyalty program combines two or more types of loyalty mechanics. Hybrid loyalty programs stand out from traditional loyalty programs because they create something completely bespoke. Brands get to choose the best elements of each program type and combine them. Merging different elements means businesses can create a scheme that perfectly fits their strategy. 

Hybrid loyalty program example

Starbucks rewards app combines a points-based program with tiered loyalty. Customers collect ‘stars’ (points) based on their spending. For every 150 stars collected, customers redeem a free drink. At 450 stars, users reach “gold level” tier. Gold members receive a birthday drink, extra shots of espresso, selected syrups, and whipped cream for free. 

The app also features a layer of gamification. Starbucks sets ‘challenges’ for users, such as buying a specific product within a certain amount of time in exchange for a free drink. The combination of collecting ‘stars’, reaching gold ‘level’, and completing challenges creates an engaging experience for the user who is incentivized to make purchases. Starbucks Rewards users account for half of Starbucks’ total sales - proving that hybrid loyalty programs can be highly successful. 

Why are hybrid loyalty programs good for customers?

Hybrid loyalty programs can create a more exciting customer experience. This translates into higher levels of engagement. As with the above Starbucks example, a program that combines different elements gives customers more reasons to participate. When users receive an enjoyable customer experience, engagement improves, as well as retention and acquisition. 
 

Another benefit to hybrid loyalty programs for customers is that rewards can be heightened. For example, you could combine a tiered system with a paid loyalty program. In this case, customers pay for access and move through ‘levels’ to unlock more rewards. The subscription fees fund valuable rewards and the tiers encourage users to participate. You could even add in an extra layer of gamification. Customers could access “leaderboards” and “badges” which encourage participation by recognizing progress through each tier. 

How do hybrid loyalty programs help brands?

Hybrid loyalty programs provide an effective way for brands to satisfy their specific goals. They are more flexible than traditional loyalty programs and can be customized to the needs of each business. This flexibility also means that brands can ‘test and learn’ new techniques. You don’t have to reinvent the wheel, but breaking out of the structures of traditional loyalty programs will help you stand out from your competition. 
 

So, how do you get started with a hybrid loyalty program?
 

How to build a hybrid loyalty program

1. Do your research.
   
   To create a highly effective hybrid loyalty scheme, understand what your customers want. What are your customers’ needs and expectations? Are your customers likely to be interested in gamification? Are your customers driven by the sense of VIP status that tiered loyalty offers? When you know what your customers want, it’s much easier to design a successful hybrid loyalty program. You can also research what your competitors are doing to make sure you offer something different. Finally, look into popular marketing strategies to get inspiration. Check out these gamified marketing campaigns to get started.
   
    
2. Simplicity is key.
   
   A hybrid loyalty program already has many moving parts. It’s imperative that your program is easy to use from a customer perspective. Keep your rules easy to follow and make sure your users understand exactly how to participate. How do you improve the UX of loyalty programs? Take a look at this. 
   
    
3. Make it engaging and exciting.
   
   The whole aim of a hybrid loyalty program is to create something exciting. You can implement elements of gamification to keep your users engaged. Personalized rewards will also encourage participation. Learn more about personalization here. 
   
    
4. Choose a flexible loyalty platform with expertise. 
   
   Hybrid loyalty programs can be complex to implement. Make sure you partner with an experienced loyalty provider who can help you get the most out of your program. Flexible software will allow you to tweak your loyalty program as time goes on and adapt to changing customer needs. Click here to discover how White Label Loyalty can provide you with a flexible solution.