Have you ever thought about how rewarding it is for a business when customers feel genuinely valued? 

Consider a local café with your favorite order ready before you even have to ask or a fashion retailer inviting you to exclusive events and surprising you with personalized discounts and VIP experiences. These personalized touches encourage repeat visits and create a foundation for long-term growth.

If your business is looking to improve customer retention, the key is to implement the best reward programs that resonate with your audience, develop brand loyalty and strengthen your bottom line.

In fact, nearly 80% of consumers say they are more likely to stay with a brand that offers bonuses and privileges. 

In this article, we explore how well-structured rewards programs can improve your loyalty initiatives and help your business reach new heights. We also analyze seven key features of successful solutions and share examples from the practice of how companies use the Loadstone martech ecosystem to implement the best reward programs. 

What is the difference between a reward program and a loyalty program?

To understand what your reward program needs to succeed, let’s first look at what loyalty and reward programs are and how they support your business growth. 

What is a loyalty program?

Imagine a cozy café situated near the bustling city center. What could entice customers to return time and again? 

One effective strategy is a loyalty program. As you probably know, it’s a popular marketing strategy that helps businesses motivate customers to buy more frequently. 

A loyalty program makes repeat visits more enjoyable by offering free products or discounts—like earning a free coffee after purchasing five cups or receiving a small birthday cake. Many of us had that thought, “Just one more cup and the next one is on the house. Why not take a small detour for that?”.

There’s more to loyalty programs than discounts and occasional perks. A well-structured loyalty strategy is a growth engine that delivers a measurable impact. It improves metrics like Customer Retention Rate (CRR) and Customer Lifetime Value (CLV), ensuring that every returning visitor contributes to the brand’s bottom line. 

To put it simply, loyalty programs are based on three pillars:

• Rewards: Customers receive points, cashback, or gifts for purchases.
• Personalization: If customers enjoy exclusive offers on their favorite products, it strengthens their connection with the brand. No one likes to feel “common”.
• Data and analytics: Loyalty is always focused on growth and improvement. Using information about customer shopping habits and preferences, you can create a program that will be in line with the best behavioral marketing practices and always one step ahead of customer expectations.

A well-designed loyalty program transforms purchases into meaningful experiences. It serves as a gift for trust, showing clients your appreciation and encouraging them to return. 

What is a reward program? 

A reward program is a visible part of the loyalty strategy. While an overall loyalty strategy builds a long-term emotional connection with repeat customers, rewards programs are the “fuel” that encourages customers to engage more frequently and meaningfully with your brand. These include points, discounts and other tangible benefits that provide immediate, action-specific incentives and encourage customers to choose your brand over competitors.

Let’s say you run a tableware store; your customers earn activity points for every purchase they make. They can exchange these points for perks, such as a set of wine glasses at a 20% discount or free gift wrapping with any order. Customers also receive an email with a discount on their birthday. 

Want a real-life example?

Brands like Starbucks, Amazon and IKEA offer rewards programs that successfully engage customers, inspire repeat purchases and cultivate long-term loyalty. Starbucks has a rewards system where customers earn “stars” for every purchase and exchange them for free drinks and food. Amazon gives Prime members free shipping, while IKEA’s Family program engages customers with special discounts and early access to sales. 

How do the best rewards programs work? 

• Drive customer retention: When customers know they will receive bonuses or cashback for a purchase, they are more likely to place their next order with you. This subtle yet effective incentive consistently works, with 73% of consumers naming loyalty programs as a key reason for continuing to shop with a particular brand.

• Elevate engagement and repeat purchase rate: Adults love games, even if they don’t admit it to themselves. When customers see their “level” growing and receive a new status or loyalty rewards, they have an inseparable motivation to reach a higher level or number of points. This gamification element taps into the innate desire to progress, increasing engagement and influencing your brand’s Repeat Purchase Rate.

• Reward loyalty: Sometimes, rewards themselves hold stand-alone appeal. By offering points or benefits simply for completing tasks or making purchases, you increase each transaction’s perceived value, nudging the Average Order Value (AOV) upward. 

The role of loyalty and rewards programs in brand growth

As we briefly mentioned, loyalty and rewards programs keep customers engaged, turn them into repeat buyers and create an emotional connection with your brand. They help you increase revenue and customer lifetime value. 

Here are the benefits you can expect from having the right loyalty and rewards programs: 

1. Increased retention: A survey found that 81% of customers shopped more often with a brand after joining its loyalty program. The math is simple—a loyal customer thinks more about your brand and less about competitors. Rewards programs provide compelling reasons for your customers to return. 
2. Increased average bill: When a customer comes back again and again, they spend more. Your job is to give them a reason to do so. Rewards like discounts and free shipping are exactly that—they motivate customers to shop with your brand to get those exclusive benefits.
3. Customers turned into brand advocates: Satisfied customers tell their friends about you, leave reviews and share on social media. And with referral bonuses (which you can set up within your loyalty strategy), they do it even more willingly.
4. Competitive advantage: Amidst many brands, the one that values ​​its customers stands out. A rewards program lets you show appreciation for their loyalty, turning it into a competitive advantage and creating a positive association with your brand. 

7 loyalty features your reward program should have

A rewards program is not a complete solution by itself. To achieve real success, it should be integrated into the overall customer experience. This is a challenging task that can require countless hours of effort.

That’s why the experts at Loadstone have compiled this list of key features your rewards program should have so that you can quickly and easily launch your strategy. 

1. Transparency and simplicity

People value clarity. If the rewards program’s terms are complicated, customers will quickly lose interest. A quality customer loyalty program has clear rules, where the customer immediately understands how to earn and use rewards.

A good practice is to immediately give 20 points when a customer purchases for 20 EUR. Add a notification: “You have accumulated 20 points. Spend them on your next purchase to receive a 10% discount”. This message is simple and clear and encourages repeat visits. 

With Loadstone, you can create simple yet effective reward programs that allow customers to view their points immediately after purchasing. And you can do so without writing a single line of code. 

Loadstone offers drag-and-drop blocks that let you design your program’s logic in a few clicks. Simply define customer actions, like purchasing, or triggers, such as birthdays. Then, attach corresponding rewards, like earning points or receiving discounts. 

Loadstone also lets you easily share program details with your customers—like their points balance and special offers—through the app or website.

2. Omnichannel capability 

Omnichannel is an approach in which all customer and brand interaction channels are linked into a single system.

The customer should have all the rewards they accumulated—whether online or in the offline stores—in one place, automatically on their account. They shouldn’t have to switch through multiple sources or keep track of points they have earned.

One of our clients is a prominent clothing store chain that sought to implement a points-based loyalty program for its customers. The client wanted participants to be able to collect and redeem points through their purchases across all sales channels. 

Here’s how they’ve been using Loadstone’s omnichannel features to bring their reward program idea to life: 

1. Setting up a reward program access in a mobile application: Customers see the accrued points in real-time, receive reminders about their use, and can order goods with delivery, paying part of the amount with bonuses.
2. Connecting with offline physical stores: At the checkout, the customer only needs to provide a phone number or show a QR code from the app to write off points. The purchase is immediately reflected in the general profile, and the points are automatically updated.
3. Sending notifications: If the customer walks near the store, they receive a push notification: “Your 200 bonuses will soon expire! Come in today and spend them on a discount of up to 15%!”.

Results:

• In the first month, customers began combining online and offline purchases more actively.
• The frequency of returns to stores increased by 20%, and the use of points increased by 35%.
• Customer satisfaction, as measured by the NPS survey, increased by 15% because the program became as convenient and understandable as possible.

Want to see similar results? Let’s talk!

3. Personalized incentives

There is no secret that each customer base is unique, which you must consider when creating your best loyalty programs. The more precisely you understand the needs and habits of your customers, the more effective your loyalty program will be.

For example, one of Loadstone’s clients, a chain of electronics stores, faced a problem: 25% of their customers made only one purchase and didn’t return.

To address this issue, the client used Loadstone to implement a personalized rewards program. 

How was it designed? 

The client relied on Loadstone Customer Data Platform (CDP), the core Loadstone product that becomes part of your tech stack as soon as you sign up. 

It collects all customer data—online, from websites and apps, and offline, from physical stores and kiosks—and organizes it into detailed profiles. This gives you access to an up-to-date view of your audience. You get to see details like their names, birthdays, addresses and behavior data, e.g., which pages they visit and whether they’ve subscribed to your newsletter. It also provides insights into their average spending and how often they purchase from your brand. 

With this granular info, you can group your customers and offer loyalty incentives that fit their needs and preferences.

The client did precisely that—they used Loadstone CDP to segment their customers into three distinct groups based on their purchase history: 

• Newcomers: Those who made only one purchase
• Regulars: Customers with two or more orders
• VIP customers: Customers making large orders

Newcomers were incentivized with a 5% discount on their second purchase, encouraging repeat business. Regulars earned double points when purchasing accessories, increasing the Average Order Value (AOV). VIP Customers received exclusive gifts, such as power banks or certificates, increasing their loyalty and the perceived value of the program.

You can achieve similar impressive results, too. Use Loadstone CDP to offer personalized, targeted incentives based on your customers’ demographics, buying habits and loyalty program activity. For example, you can send exclusive 20% discount offers to customers aged 30–35 who’ve purchased a specific product three times in the past year and are on the “Silver” membership tier. 

Talk to one of our experts to get started.

4. Gamification elements

People love to play. And the best way to add playfulness to your reward program is through gamification. It brings excitement to the shopping process and makes interaction with your program more engaging.

For example, you could implement levels like “Beginner”, “Regular Customer” and “Expert”. Each level would unlock new bonuses. For “Beginners”, you could offer a welcome discount. “Regular Customers” could receive early access to sales, while those with “Expert” level get VIP perks like free shipping or big, personalized discounts and birthday gifts. 

You may also introduce challenges like “Make three purchases this month and earn 500 bonus points!”. A progress bar showing how much time remains until the customer achieves the next reward or level is also a great way to entice and engage your shoppers.

These gamification elements make the experience more fun and encourage customers to participate more actively.

Loadstone’s case:

Our client, an electronics store chain, improved its loyalty program by adding levels, each offering unique privileges such as VIP delivery and early access to sales. 

As a result, customers with the highest loyalty levels spent a whopping 40% more than regular customers!

If this sounds exciting, book a call to learn how you can use Loadstone to create loyalty and rewards programs that bring joy to your customers and outstanding results to your business. 

5. Quick access to rewards

None of us likes doing things that take a long time. The same applies to bonuses: if points accumulate for an extended period or are difficult to redeem, motivation decreases and you may lose the client altogether.

With Loadstone, you can create a system that allows instant point collection. You can set it up in a way that your customers immediately receive a notification after a purchase that says, “You have earned 50 points! Would you like to spend them on a free gift?”. 

This message gives your customers the feeling of being instantly rewarded and encourages them to use their points immediately or return later to redeem them. In both cases, it’s a win for your business because clients will keep coming back to engage with your brand. 

6. Adaptation to mobile devices

Our smartphones are with us almost all hours of the day. This makes mobile apps the perfect way to stay connected with your customers. 

There’s no need for plastic cards or memorizing loyalty program numbers. All your customers have to do is display the QR code or barcode from the app. Our experience shows that most clients prefer to manage their loyalty benefits and bonuses using their smartphones.

Loadstone lets you run your reward program through customers’ phones: 

• Send notifications about new bonuses and discounts
• Allow scanning of QR codes to collect and use points
• Enable shoppers to view their balance and personalized offers in real time via the app

One of our clients used Loadstone to implement the “scan and pay with points” feature via a mobile app. This simplified the use of bonuses and their consumption increased by 35%!

7. Constant monitoring and optimization

Your rewards program needs to evolve alongside your customer and business demands. That’s why you must monitor its performance and pinpoint what works and what doesn’t.

To do so, track parameters like:

• Which rewards and offers are most frequently used? 
• Which customer segments are the most active? 
• In which situations do customers lose interest in the program?

One of our clients, a retailer, used Loadstone analytics tools to track customer activity, such as average order value and which products customers were most and least interested in. This helped them realize that interest in particular products decreased. So, they launched a limited-time promotion as part of their retail loyalty program, offering double points for purchases of those products. As a result, sales in this category increased by 20%. 

Loadstone lets you track customer data and actions like total purchases and order frequency. You can also monitor key rewards program metrics, such as the number of loyalty program members in each membership tier and points redeemed.

Loadstone—your partner in building an effective reward program

While it may be tempting to adopt a template or copy an existing market idea—since “it already works”—this approach often yields limited results and can even harm customer loyalty. Customers may stop using accumulated points and discount promotions can lose their effectiveness.

Instead, you should implement loyalty features that align with your business needs and goals. That’s precisely what you can do with Loadstone Loyalty Management.

It’s one of the Loadstone martech ecosystem products offering capabilities like:

• No-code rewards program builder: Set up your rewards program using the drag-and-drop builder. Just click on the blocks to define how customers earn points and what rewards they can claim. This saves you time and effort, as there’s no need for coding—you get to launch and manage your program in minutes.
• Customer segmentation: Loadstone CDP automatically categorizes customers into groups based on their behavior and purchase history, allowing you to provide the most relevant rewards. Create unique offers tailored for each segmented group, increasing customer engagement and satisfaction. 
• Scalable solution: This is another capability you get thanks to the Loadstone CDP and composable structure. The platform can handle millions of users, letting you easily scale your reward program as your user base grows. Your program will run smoothly, no matter how big your business gets. Plus, you can easily add on other martech solutions when the need arises.
• Real-time analytics: Reward programs relying on poor analytics operate at half capacity. That’s why Loadstone provides systems that track every customer interaction, from the initial engagement with the brand to the final transaction. This data helps identify vital “growth points” like enrollment and redemption rates. This way, you can monitor and analyze program performance in real time, enabling you to make necessary adjustments and improvements promptly.
• Omnichannel engagement: Ensure interaction with the loyalty program across all channels—online and offline, including mobile applications, social media, digital wallets and physical stores.
• Сommunication automation: Use Loadstone CRM and marketing automation platform to configure automatic notifications and reminders that encourage customers to make repeat purchases and use their accumulated points. 
• Customizable loyalty rewards: Build a reward program that fits any scenario. Reward customers with points for every purchase. Offer special discounts to bring back those who left items in their cart or create tiered memberships where the most loyal customers unlock the best perks.

As a composable e-commerce platform, Loadstone lets you take your marketing and loyalty efforts even further. Connect it with our other tools like CRM and Communications and Promotional Marketing to create a unique solution that keeps customers engaged and helps you drive sales.

And whenever you need a hand, Loadstone experts are here for you. You can count on clear advice to make the most of our products and see real results.

By choosing Loadstone, you gain a partner who helps you build effective rewards programs and foster strong relationships with customers who value your brand, remain loyal over time and contribute to your business success. 

Ready to launch a reward program that truly works? 

As you can see from the examples we covered, the right loyalty features in the rewards program improve customer loyalty and increase customer retention, leading to higher sales and overall success.

But, creating a successful rewards program involves more than just theory. It requires e-commerce tools that help you design solutions in line with the intricacies of your business and customer expectations. 

Take your reward program to the next level—book a call to discover how Loadstone can provide you with the customer engagement software and expertise you need to design a loyalty solution that fits your needs and delivers the results your business deserves.

FAQs

What are the characteristics of loyalty?

The characteristics of a successful loyalty program are simplicity, omnichannel capability, personalization, gamification, quick access to rewards, mobile app adaptation and performance monitoring. 

What does a rewards program do?

A rewards program encourages customers to shop more. It offers points, discounts and gamification elements like progress bars. It makes shopping more engaging and fun, keeping customers coming back and buying more. 

What should I offer in a rewards program?

You should offer personalized incentives to reward customers based on their behavior and preferences. These incentives may include points for purchases, special discounts, or free products. For example, if a customer often buys T-shirts, reward them with a free one after a certain number of purchases.

What is the best example of a loyalty program?

A great example of a loyalty program is a business that used Loadstone to categorize its audience into Newcomers, Regulars and VIPs and customize incentives for each group. New customers received a discount on their second purchase, Regulars earned double points for buying specific products and VIP customers got exclusive gifts like power banks. This approach led to a 30% increase in repeat purchases and an 18% higher average check.

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