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Guide to Customer Loyalty Program Software: Why Use Them?

Clavax Technologies
Guide to Customer Loyalty Program Software: Why Use Them?

In the early years, retailers were the ones who focused on plans for keeping loyal customers, like loyalty-based programs. In recent times, more vendors in different industries are growing bigger customer bases with higher demands.  

To tackle the higher numbers and retain their customers, many companies adopt strategies like adopting customer loyalty software. Statistically, 75% of businesses in the United States got better ROI with loyalty programs.  

Here are some noteworthy facts.

  • Convincing a regular customer who has worked with a company to stay is easier.
  • Strategies to gain new customers cost 6-7 times extra than retaining the older ones for businesses.   
  • 83% of customers prefer continuing their association with a company that offers them a loyalty program.   

While these programs are common now in many businesses, most consumers and new business owners have limited knowledge of what it is. To create a usable and productive loyalty program, you should learn more details about it first.  

What is a Customer Loyalty Program Software? 

Loyalty programs in essence are marketing strategies that companies adopt to keep their current customers happy. This is a tool to convince the consumers to stay loyal to the brand and continue using their service for purchases.  

Over the years, loyalty programs have undergone many changes, with additional features and services catering to customer satisfaction.

What is the importance of loyalty programs for businesses?

Multiple companies are now focusing on building connections with their consumers in an effort to retain them. The repeat customers not only buy and use their stuff more often, but they also refer the company to their close people. Statistically, even a 5% rise in customer retention increases business profitability rate by 25-95%. 

Therefore, businesses should focus on creating strategies centred around satisfying their repeat customers. Loyalty programs are useful here. 

Common offers under any loyalty reward program include benefits like extended warranty, free shipping, and additional gifts like free VIP tickets. Statistics show that 78% of buyers disregard the mistakes of a company as long as they give them amazing service. With these rewards, they are less likely to switch to a competitor, even if they offer better prices.

Common types of the Customer Loyalty Program Software

Companies offer different variations of customer loyalty programs. To understand what kind of Customer Loyalty Program Software would benefit you, it is crucial to understand the different program types and their uses.

  • Tier programs- As customers spend more; they rise in rank. The ones in higher ranks get better deals compared to their immediate lower batch. This prompts customers to spend more to rise up in ranks and improve their status. With this strategy, a long-lasting customer-brand relationship is possible.
  • Reward redemption- Customers have to spend money; in return, they can redeem the rewards they get from the program. This incentive-based strategy is simple for customers and businesses alike, convenient, quick to implement, and valuable.
  • Gamified programs- Users rise in ranks after finishing challenges and acquiring badges. They would lose their badge and the consequent reward if they lose a step. So, most customers continue engaging, thereby increasing profit for the company.
  • Perks- Here, the target audience includes all customers, new ones and old patrons alike. Members grow an emotional attachment to the brand since they are offering the benefits randomly and to all. For the retailer, this is easier to manage but not personalize.

Best tips for creating a Customer Loyalty Program Software

To create a high-quality and profitable customer reward program, follow these points.

  • Plan a simplified program structure.
  • Simplify the joining process.
  • Focus on your existing customers/mailing list.  
  • Create easy-to-understand-and-use rules for earning and spending. 
  • Launch your initiatives in small amounts frequently instead of all at once.  
  • Use automation in your Customer Loyalty Software 


Planning and implementing a loyalty program for your business would benefit you immensely. Not only can you impress your core audience but also increase your profits over time. Understand the needs of your target audience and your business goals first before planning such a program.

Clavax Technologies
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