It’s no secret that customer loyalty programs are an essential part of running a successful business. But while there are many options out there, not all loyalty programs are created equal. Research has shown that premium loyalty programs offer several advantages over traditional points-based programs. From increased customer engagement to higher ROI and lower churn rates, the benefits of premium loyalty programs can’t be ignored.

Memberships for Shopify mean increased customer engagement with brands

According to data from Bond Brand Loyalty, 90 percent of customers enrolled in premium loyalty programs say they are likely to continue shopping with the same brand if offered a rewards program, compared to only 61 percent for traditional points-based programs. Additionally, 83 percent of customers enrolled in premium loyalty programs report feeling more engaged with the brand, compared to only 57 percent for traditional points-based programs. This demonstrates that customers are more likely to remain loyal and remain engaged if offered a premium loyalty program.

Premium Loyalty generates higher ROI for Direct to Consumer brands

According to Forrester research, companies offering premium rewards saw an average 4x boost in return on investment (ROI) within 2 years. This is largely due to their ability to attract and retain high-value customers by offering personalized experiences tailored specifically for them. Additionally, these companies saw increases in lifetime customer value after launching their premium program—in some cases as much as 60 percent!

Paid Loyalty programs have lower churn

A study conducted by Maritz found that customers who were members of a company’s premium loyalty program had significantly lower churn rates than those who were members of its traditional points-based program—49 percent vs 63 percent respectively. This demonstrates the effectiveness of a well-crafted and properly implemented reward system in retaining customers over time.

Premium loyalty programs offer significant advantages over traditional points-based ones when it comes to retaining customers and increasing ROI. With increased customer engagement, higher ROI, and lower churn rates than points-based programs, businesses should consider transitioning from their existing reward system if they want to maximize their success. By offering personalized experiences tailored for your most valuable customers through a premium loyalty program, you can ensure your business remains competitive in today’s ever-evolving market environment.