What is Loyalty Marketing and What Are Its Benefits?

Jul 03, 2022

As a business owner or marketing manager, you're always looking for ways to increase sales and loyalty marketing is a great way to do that but what exactly is loyalty marketing and how does it work? In this comprehensive blog, we'll answer those questions and more so you can decide if this type of marketing is right for your business.

Loyalty marketing is a strategy that businesses use to create loyalty and long-term engagement with their customers. By offering loyalty rewards, such as discounts, coupons, or points, businesses incentivise their customers to keep coming back. Loyalty marketing can be a powerful tool for small businesses. By creating loyalty among your customers, you can build a base of lifelong fans who will support your business.


Types of Loyalty Marketing

Loyalty marketing is no longer an option for businesses but a must have strategy. There are many types of loyalty marketing out there, but the two (2) most common and effective ones are Rewards marketing and co-branding. If you would like to consider implementing a loyalty marketing strategy for your business, contact us at so we can help you put your own loyalty program in place! 

Rewards Programs:

Reward programs are one of the most common types of loyalty marketing. These programs reward customers for their repeat business by giving them discounts, coupons, freebies, or other perks. For example, a coffee shop might give loyal customers a free cup of coffee after they've made ten purchases. 

Other businesses use tiered pricing, where different levels of discounts are offered based on how much someone spends with the business over time. Another common tactic is known as “points for purchase” whereby customers earn points for every amount they spend which can be redeemed for future savings or prizes. 


This type of loyalty marketing is when two companies team up to offer customers special deals or benefits. For example, an airline might partner with a hotel chain to offer discounts on travel packages and again the points based system is one of the most effective strategies for implementing this type of loyalty marketing.

Benefits of loyalty marketing?

Loyalty marketing can be a powerful tool to help businesses improve their bottom line. There are many benefits of loyalty marketing, including

Increased Sales:

One way that loyalty marketing increases sales is by enticing customers with exclusive deals and offers that are only available to those enrolled in the program. This encourages people to make repeat purchases in order to take advantage of these savings, which can give a significant boost to a business’s profit margin. Furthermore, offering loyal customers exclusive access to new products or services before they are released to the general public can also create a sense of urgency that drives up sales numbers.

Brand Awareness and Recognition:

When customers see your loyalty program, they will start to associate your brand with positive experiences and customer satisfaction. This can lead to increased brand awareness and recognition, which can ultimately result in more sales.

Improved Customer Retention: 

With a loyalty program in place, you’ll be able to better retain your existing customer base. This is because satisfied customers are less likely to switch brands when they have points or rewards that they can redeem with your company. Happy customers who feel appreciated are more likely to recommend your business to others, further increasing its customer base.

Implementation of loyalty marketing strategies?

There are numerous ways businesses can go about implementing successful loyalty marketing programs. Here are some effective implementation strategies that you can use to increase sales and encourage customers to stay with your brand. 

  • Offer incentives for customers to sign up for your loyalty program.

  •  Make it easy for customers to earn rewards points by simplifying the rules of your program.

  •  Communicate often with program members to keep them engaged.

  •  Use data from your loyalty program to segment your customer base and tailor future marketing efforts.

  •  Capitalise on social media by promoting exclusive deals and offers for loyalty program members.


Ultimately, there is no one-size-fits-all solution when it comes to developing an effective loyalty marketing strategy; rather, it will vary based on the unique needs and objectives of each individual business.

The key to success lies in understanding how to measure the success of your campaigns. By tracking key metrics such as customer satisfaction, engagement levels, and ROI, you can ensure that your loyalty marketing efforts are achieving the desired results.