How to Increase Customer Loyalty with a Rewards Program

Learn how to create a customer rewards program that improves your customer experience and encourages your buyers to return to your brand every time they shop.

Every business owner dreams of having customers who always choose their products over competitors’. The good news? Creating this kind of customer loyalty isn’t just possible, it can be easy too.

Reward programs help to improve the customer experience by giving buyers benefits for repeatedly purchasing your goods or services. What’s more, the customer loyalty they encourage has a bunch of business benefits, from increasing revenue to reducing marketing costs and improving your brand’s image.

For your business to reap the rewards of a customer loyalty program, you need to ensure that your strategy offers the types of benefits that appeal to your target market. This guide will take you through everything you need to know to create a successful rewards program that builds customer loyalty.


What Is a Customer Loyalty Program?

Customer loyalty programs are marketing tools that encourage customer retention using a structured reward system. In other words, they keep customers coming back to your business rather than buying from a competitor.

The idea is simple: By offering customers benefits from buying your goods or services, they’re more likely to interact with your business when making a choice between you and a competitor. 

There are a variety of forms these programs can take, but at their simplest, they’re designed to offer incentives and benefits to clients who buy goods or services on a regular basis. Or, better still, promote your brand.

You may offer free products, free trials, discounts, rewards, or perks like early access to sales or new products. You could also encourage current customers to recommend your goods or services to new buyers with a refer-a-friend program. 

What Are the Benefits of Offering a Customer Loyalty Program?

Naturally, the biggest benefit of a customer loyalty program is that it can encourage consumers to keep purchasing your products over your competitors’ – and spend more per transaction. That translates into increased sales and revenue for your business.

These programs can also improve the customer experience, which often leads to increased customer retention. As part of the post-sale experience, the excitement of receiving some kind of reward immediately improves customer satisfaction. Buyers say that they’re 84% more likely to be a repeat customer of a brand that offers a loyalty program.

Increased revenue and more customers are great, but there’s another major benefit that can help you to boost your business in the long run: Data.

When your customers sign up for a loyalty program, they’ll provide you with personal information and contact details. Then you’ll likely assign them a unique membership code. Using this data, you can gain a better understanding of who your customer is. This will enable you to improve your business and marketing strategies.

A recent report from Accenture showed that companies with rewards programs that provide value to their clients are able to generate 12% to 18% more revenue from customers who join those programs. It’s important to have a well-structured strategy that benefits both your business and your customer.

6 Steps to Set Up a Customer Loyalty Program

There are a variety of ways you can go about setting up your customer loyalty program. What’s important is that you set a good foundation by understanding what’s best for your business and customers. Armed with this knowledge, you can easily set yourself up for success.

1. Figure Out Your Business Goals

Although loyalty programs are great for customers, the primary objective is to help you grow a sustainable business. 

Take some time to analyze your business. Think about your business goals – perhaps you want to increase sales or perhaps you’re just after some brand awareness – as well as your available budget. 

Considering these factors will help you to decide what kind of loyalty program would be most beneficial for achieving your business objectives.

2. Get to Know Your Customers

This is arguably the most important step in setting up a customer loyalty program. To guarantee that your loyalty program encourages them to choose your brand, you’ll need to understand who your customers are and what they value.

Whether you sell your goods and services online or operate from a brick-and-mortar store, there’s plenty of opportunity to collect some vital information about who’s buying from your business.

For customers who purchase goods via your website, you track the types of goods they buy as well as how often they make purchases. You also have access to some basic contact details, so you can send a short survey to ask what type of rewards program they’d like best.

In store, you can have some simple surveys on hand and ask customers to fill them out when making a purchase. Opt for multiple choice or Likert scale questions to ensure the process is pain free. And don’t forget to offer a small incentive for completing the poll.

3. Structure Your Loyalty Program

As we’ve already mentioned, there are loads of ways that you can reward your customers. From providing cash-back incentives or points-based rewards to tiered discounts and even free products, each has its own set of benefits and drawbacks.

Use the information you gathered in your customer surveys to root out what the people who buy from your business value most and structure your program around this.

What’s important here is to ensure that you reward a variety of actions (think purchasing over a certain threshold or referring friends and family) and to offer a variety of rewards. A customer’s first purchase might attract a discount, while their 10th could allow them to choose a free gift.

4. Choose Your Infrastructure

You want your loyalty program to add to your customer experience, not detract from it. Which is why it’s essential that you choose loyalty program software that’s seamless and easy to use.

The type of rewards you want to offer and the volume of transactions you’ll need to track are two important considerations. Plus, you’ll want to think about the platforms you’re currently using that will need to integrate with the system. These could be email, social media, or ecommerce software. You should also keep your payment infrastructure in mind.

5. Come Up with a Catchy Name

While a plain old ‘Loyalty Program’ could work, a creative name is far more likely to catch the attention (and imaginations) of your customers. What’s more, a great name will help to distinguish your program from others and make it stick in the mind of your consumers.

Pick a moniker that has something to do with your brand, industry, or customers. This title should go beyond telling your customers that they’ll receive some kind of reward. It needs to help them feel like they’re a part of a community.

If you’re looking for some help with naming your loyalty program, there are plenty of examples that you can look to for inspiration. To name a few, fast-food giant Domino’s Pizza has Piece of the Pie Rewards. Outdoor and adventure clothing manufacturer The North Face has their VIPeak program. The Wells Fargo banking group has their Go Far Rewards. 

6. Encourage Enrolments

It’s time to launch your loyalty program! The hard (technical) work is done and all that’s left to do is get your customers to sign up and start earning rewards.

When it comes to enrolments, you’ll want to ensure that your customers know the benefits of being part of your loyalty program. Plus, you should provide plenty of opportunities for them to register quickly and easily. 

Use website pop-ups and social media posts to promote the program to customers who use these channels to interact with your brand. Newsletters are also useful here. Add a section about your loyalty program to your invoicing emails when customers purchase goods online.

For in-store purchases, get your shop assistants to tell customers about the program and the types of rewards they can earn. Plus, add details about the points, discounts, or other benefits they could have received to your till slips.

More Ways to Improve Your Customer Experience

Another way to keep customers coming back is to provide them with the best checkout experience when shopping online. Offering a wide range of easy-to-use, secure payment methods is a great way to do this.

With, you can let your customers pay with their favorite payment methods via your checkout page on your website. (You can find out which they prefer using the survey we discussed earlier.) Our Pay Dashboard allows you to set up and customize your checkout page and add or remove payment methods in just a few clicks.

If you don’t sell goods or services through a website, we also have other options for getting paid. Our Pay Virtual Terminal enables you to collect your customer’s credit card details and enter them into your dashboard to receive payment. Pay Links and Pay Checkout allow you to create a payment link or invoice that will direct your customer to a personalized checkout page when they click the link in your email or SMS.

Don’t forget to pay attention to customer feedback and make changes based on this input to enhance your customer’s journey from browsing to buying.

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The Bottom Line

Loyalty programs are a great way to encourage repeat business. While they benefit the people buying your goods and services, they can also help you to improve your offering by giving you access to first-hand data.

Customer experience is the name of the game when it comes to loyalty programs. A better experience for customers will likely result in higher retention referral rates. Both of these boost revenue and reduce the amount of work and money you need to spend on attracting more buyers.

Be sure to also pay attention to other methods for improving the customer experience. Offering a range of simple, secure payment methods that your customers are familiar with goes a long way. has you covered here – once you sign up for an account, your Pay Dashboard allows you to choose all of the most popular payment methods in just a few clicks.


How do you gain customer loyalty?

Creating an excellent customer experience is the best way to gain customer loyalty. Ensuring you have a seamless shopping experience, plenty of ways to pay, and superb post-sale service are all good strategies here. Besides encouraging buyers to return to your business time and time again, this may even motivate them to recommend your goods and services to their networks.

What's the best way to increase customer loyalty?

Although there are a variety of tactics you can use, rewards programs are the best way to increase customer loyalty. When customers receive benefits for buying your goods and services, they’re more likely to choose your brand over your competitors.

What is the importance of customer loyalty?

Customer loyalty has many benefits for your business. Having buyers who choose your products and services on an ongoing basis helps to create reliable revenue. What’s more, it reduces marketing costs as it reduces spend on these individuals as well as those who receive recommendations from them.

How can I improve my payment system?

When you sign up with, you can easily create a custom checkout page and select a variety of payment methods to accept on your website. Even if your business isn’t online, our Pay Links and Pay Checkout both allow you to create links that will send your customers to a personalized checkout page. Click here to get started now!

Meet the author
Nicole Forrest
Nicole Forrest is a writer and editor who has been using storytelling to help build brands for more than a decade. With a special interest in fintech and a passion for creating compelling content, she focuses on making complex topics easy to understand.
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