Tiered loyalty program

What is a tiered loyalty program?

What types of behavior are usually rewarded by a tiered loyalty program?

• Making purchases: One of the most common behaviors that are rewarded by a tiered loyalty program is making purchases with a brand. Customers who make a lot of purchases with a brand are often rewarded with higher tier status, which can provide them with access to more valuable rewards and benefits.

• Spending a certain amount of money: In addition to making purchases, a tiered loyalty program can reward customers who spend a certain amount of money with a brand. This can be measured over a specific period, such as a month or a year, and can be used to determine a customer's tier status.

• Engaging with the brand on social media: Many brands also reward customers who engage with the brand on social media, such as by following the brand on Twitter or sharing brand-related content on Facebook. This can be a valuable way for a brand to build a community of loyal customers and encourage them to engage with the brand.

• Referring friends and family: A tiered loyalty program may reward customers who refer friends and family to the brand. This can be a valuable way for a brand to grow its customer base and reward its loyal customers.

"A loyalty program helps you build relationships through offering value, like sharing related or complementary products to customers who have already tried your offering. Strategic, regular touchpoints will increase your customer’s lifetime value and your margin. It’s win-win!"

Felipe Silberstein

Head of Platform Strategy of Apply Digital

How to design a tiered loyalty program?

• Identify the behavior you want to reward: The first step in designing a tiered loyalty program is to identify the behavior that you want to reward. This might include making purchases with your brand, spending a certain amount of money with your brand, engaging with your brand on social media, or referring friends and family to your brand.

• Determine the rewards and benefits for each tier: Once you have identified the behavior that you want to reward, you can then determine the rewards and benefits for each tier. This might include discounts, free shipping, access to exclusive events, or other perks. Make sure to design your rewards and benefits to encourage customers to engage more with your brand to move up to higher tiers.

• Set the criteria for each tier: Based on the rewards and benefits that you have identified for each tier, you can then set the criteria for each tier. This might include the number of purchases a customer needs to make, the amount of money they need to spend, or the number of referrals they need to make to move up to a higher tier.

• Develop a marketing plan: Once you have designed your tiered loyalty program, you can develop a marketing plan that outlines the specific actions and tactics that you will use to promote your program to your customers. This plan should include details about the channels and platforms that you will use, the messaging and content that you will use, and the metrics that you will track to measure the success of your efforts.

What are the benefits of a tiered loyalty program?

• Improved customer engagement: A tiered loyalty program can help to improve customer engagement by encouraging customers to engage more with a brand to move up to higher tiers and access more valuable rewards and benefits. This can lead to increased customer loyalty and higher conversion rates.

• Increased customer spending: A tiered loyalty program can also help to increase customer spending by rewarding customers who spend a certain amount of money with a brand. This can be a valuable way for a brand to grow its revenue and increase its market share.

• Better customer data: A tiered loyalty program can also provide a brand with better customer data. By tracking customer behavior and engagement, a tiered loyalty program can help a brand to understand its customers better and to tailor its marketing and sales efforts accordingly.

• Enhanced brand reputation: A tiered loyalty program can also help to enhance a brand's reputation. By rewarding its most loyal customers with valuable rewards and benefits, a brand can demonstrate its commitment to its customers and build a community of loyal and engaged customers.