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A customer loyalty program (or rewards program) is a customer retention strategy businesses use to entice customers to continue buying from them. These programs typically consist of discounts, free offers, or other perks consumers earn for repeat purchases.
Many card issuers will allow you to redeem your cash back with a statement credit, a direct deposit to your bank account or a check payable to you. Some issuers also offer redemption options like gift cards, tickets to concerts and sporting events or even charitable donations.
Unlike VIP and rewards programs, loyalty programs are not based on any purchase amount, but rather discounts and specials are freely given without restriction to encourage repeat business.
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Unlike traditional loyalty programs that are free to join, paid loyalty programs require customers to pay a fee in exchange for rewards. Members of paid loyalty programs enjoy special perks inaccessible to other customers. These extra benefits encourage customers to continue purchasing over an extended period.
What Is a Loyalty Program? Loyalty programs, sponsored by retailers and other businesses, offer rewards, discounts, and other special incentives as a way to attract and retain customers. They are designed to encourage repeat business, offering people a reward for store/brand loyalty (hence the name).
Some data suggests that the initial investment alone can be as much as $500,000. To build a bespoke loyalty program in-house, you'll also need to consider: Development costs. Maintenance and updates.