Why loyalty programs matter
A good program adds switching cost in the customer’s favor. Accumulated points and status make the next purchase default to you instead of restarting the comparison.
Common loyalty program models
- Points per purchase, redeemed as credit or discounts
- Tiers with escalating perks and early access
- Paid memberships with benefits built in
- Action rewards for reviews, referrals, and birthdays
Questions
Do loyalty programs pay off for small stores?
Only with margin to fund rewards and a product people rebuy. Consumables and repeat-purchase categories benefit most; one-time purchases rarely justify the mechanics.
Is rewarding reviews with points a good idea?
Yes, when the reward applies to every review regardless of rating and the incentive is disclosed. Rewarding only praise crosses into review gating.