Loyalty Reward Incentives for Customers (with Examples)

Share This Post

Turning a customer into a brand loyalist is a difficult feat. You need to have a reliable strategy for rewarding loyal customers so that they would buy from you over & over again. This is where customer loyalty reward incentives come in.

With the right loyalty incentive, you can turn a first-time buyer into a repeat customer—fast.

In this article, we will tell you all you need to know about successful customer loyalty programs from their types to their various things you can use as incentives.

What Are Loyalty Reward Incentives?

Firstly, you need to know what loyalty reward incentives are. A successful loyalty program is a marketing strategy that rewards the target audience that frequently engages with the brand. By rewarding this repetitive engagement, you can ensure continuous business growth. 

The idea is that if you reward your current customers for their loyalty they will keep coming back for more. These incentives can include free products, discounts, and a lot more. Let’s see what types of robust loyalty programs currently exist in the business market.

Types of Loyalty Programs


In this type of innovative loyalty program, every time a customer shops with you, they gain points. Later on, the frequent customers can exchange these points for different benefits, such as coupons, free items, free shipping, etc. 

This is a well-established, time tested model which has served much business all over the world.  By rewarding your customers with redeemable points, you are encouraging them to keep investing in your brand and they are less likely to switch over to a competitor.

Tiered Loyalty Program

The concept behind a tier program is that the more loyal a consumer is, the more they will be rewarded. This reward level is tiered, and it encourages the happy customers to unlock the next levels of loyalty and get the benefits associated with that level. 

Moreover, tiered programs have a competitive element as well since the different type of customers compete with each other to reach higher levels. 


Paid loyalty programs are a relatively new type of loyalty VIP program in which the customers pay a fee in return for a VIP experience. The experience can be anything from free priority shipping to discounts and coupons.

This may seem a bit counter-intuitive, but charging your customers a fee is not a deal-breaker and this is a very effective rewards program. This is because the customers if the reward value is higher than what they are paying. For example, they will be happy to pay 10$ for a monthly subscription instead of paying a 5$ shipping fee every time they buy a product. 


What is one of the biggest motivators in real life? Progress. When people believe that they are making progress and close to achieving a goal, they become more committed and make double their efforts to achieve that goal. 

This is a psychological trigger that you can effectively use in your loyalty program, to ensure repeat customer engagement. Encourage the progress of consumers via your loyalty program and help them reach their goals using your products.

You can reward the users based on the level of their social media engagement as well. The more like & comment on your posts, the better the chances of them getting a reward.


Another effective loyalty reward program is strategic partnerships with your customers depending on your services and their needs. For example, if you are a dog food manufacturer, you can partner up with a veterinary office and offer co-branded deals which are beneficial both for them and your company.

Create a community on a platform (like Slack or Discord) where the customers can interact with one another and share ideas, feedback, etc. It will encourage discussion about your services and products as well.


Sweepstakes usually involve entering all the members of your company’s loyalty program into a lucky draw. This gives the users a chance to win a prize and a way for you to show your appreciation for them.

Prize draws create buzz and also generate awareness regarding your brand. This will help you retain your loyal customer base well as attract potential customers and thereby improve your annual sales.

Types of Loyalty Reward Incentives for Any Business

Free Product

Who doesn’t like getting free stuff, right? And when the free product is your favourite book, eyeliner, or any other item, loyalty programs become alluring and enticing. Give free products or product samples as the reward for your loyalty program and see how the engagement and sales go through the roof. 


Providing discounts on your services and products will motivate the customers to keep coming back to your company. The trick is to limit the discounts available to the general public and leave the special offers, personalized offers & discounts to your loyalty program members.

You can give discounts in the form of signup incentives to ensure complete custom loyalty right from the start. Issue them customer loyalty cards or create a rewards app to keep track of the loyalty program rewards.

Limited-Release Swag

You can take the reward game to the next level by offering exclusive products to the members only. From limited clothing to limited book editions, you will attract a lot more customers by offering limited edition products. 

Store Credit

Another popular reward is store credit & cash backs for the customers on future purchases. For every dollar the clients spend, you can give them store credit that will be applicable the next time they buy something from you.

Birthday Gifts

What is a great way to make your clients feel valued? By giving them free treats on their birthday. You can send them free product samples, branded swag, discount coupons, etc. with a customized birthday card to make them feel special and appreciated.

Why not give them gift cards for streaming services and see how your user response rates improve?

Free Shipping

Another iconic perk is free shipping to your loyal customers. People really appreciate fast service and if you offer them free shipping in addition to quick delivery (case in point is Amazon prime with their same-day shipping), it will be the cherry on the top.

VIP-Only Products

Another way to reward your loyal customers is by offering them exclusive access to products. For example, if you sell camping and mountaineering equipment, you can let your members redeem their points for expeditions & adventures around the globe. 

If you are a fashion brand, you can offer priority access to fashion events, exclusive sales, gift cards, and free tickets to beauty & style workshops.

Benefits of Loyalty Rewards

Here are some various benefits of loyalty programs, just to name a few:

  1. Greater Revenue
  2. Increase in Customer Retention Rates
  3. Easier Conversions
  4. Competitive Advantage
  5. Improved Customer Relationship

Customer Loyalty Reward Incentives: Final Word

Offering customer rewards programs is an excellent way of getting loyal customers and keeping your brand in their mind. There are many types of rewards that you can offer to appreciate the customer purchase.

The key here is to understand the needs and demands of your clients, and then selecting a program that will improve the value you provide them.