May 7, 2024
Loyalty program

What is a loyalty program?

what is a loyalty program

A loyalty program can be a good strategy for businesses to promote customer loyalty and increase customer satisfaction. Customers can earn rewards based on their purchases or engagement with a particular brand. Loyalty programs have become popular in various sectors. But what exactly is a loyalty program and how can it help retain customers? You’ll find out in this blog.


Definition of loyalty program


First, let’s answer the question: what is a loyalty program? A loyalty program is a marketing tool that incentivizes loyal customers, hopefully encouraging them to remain customers for longer and make more repeat purchases. Often, it’s a psychological effect because ultimately the customer is still paying. Think of loyalty points, for example. The customer needs to make many more purchases than average to earn enough loyalty points. But because they are primarily focused on the reward, customers often forget that they are spending more and more frequently.


Benefits of a loyalty program


Now that we’ve answered the question “what is a loyalty program,” let’s look at its benefits. A loyalty program is a great way to retain customers and encourage them to spend more. Additionally, retaining current customers is easier than acquiring new ones. This makes a loyalty program very effective for an organization. Generally, the rule of thumb is that 20% of customers account for 80% of revenue. So, retaining and incentivizing loyal customers is much more attractive in the long run than acquiring new ones. Moreover, loyal customers can become ambassadors for your business. These customers essentially act as ambassadors when they recommend your business to others. As a result, you can generate new customers through word-of-mouth advertising, essentially for free, without investing money yourself. 

loyalty program

Types of loyalty programs


There are many types of loyalty programs. One program may better suit one company while another program may better suit another sector. Below, we listed a few types of loyalty programs.


Reward programs

This is the oldest and most well-known loyalty program. This is a very popular phenomenon, especially in supermarkets. Think, for example, of the savings cards for cutlery and pans from Albert Heijn. If you make purchases for a certain amount, you will receive a certain number of reward points. In the past, you had a savings card where you had to stick stamps, but now it’s completely different. Nowadays, a savings card is kept online via an app or website. Certain products are excluded from reward programs by law. This includes medicines, cigarettes and alcohol.


Benefit programs

Benefit programs are also widely used to reward loyal customers. This can be done, for example, by giving customers who make frequent purchases a discount voucher. Discounts are often also given to products that a specific customer often purchases. So if you often buy beauty products at, you will receive an extra discount on a specific brand that you regularly buy. This feels very personal to the customer, which can make the customer even more loyal. With a benefit program, no reciprocal action is required. The benefit is expressed in receiving more or paying less.



A premium is often an addition to the normal loyalty program. In this case, a customer receives even more discounts than usual in exchange for a monthly or annual payment. Often, one month free is also offered so that the customer can experience the benefits of this premium program firsthand. Albert Heijn Premium is a very good example of this. Through a small payment, the customer receives almost twice as much discount compared to the normal bonus card. This further encourages customers to make purchases at Albert Heijn instead of at another supermarket.


How do you start a loyalty program?


Starting a loyalty program yourself can be very difficult. You have to come up with an idea yourself, turn it into a concept, implement it and find or create a program to store it all in your systems. This can be very difficult, especially if you are already busy enough running your business. Fortunately, there are plenty of ways to set up a loyalty program. In addition, there are many companies that specialize in this and can help you. So are you interested in a loyalty program? Then look for a company and together create a way to make your customers more loyal!