Why travelers find tiered loyalty programs attractive

Planning and implementing a loyalty program correctly is the key to customer satisfaction and long-term engagement. A loyalty program that inspires greater fidelity in the ranks of its members can effectively boost engagement. A new retail study confirms that customers who feel emotionally connected with the brands have approximately 306% higher lifetime value and will recommend the brand at a much higher rate (71%). (Source)

In light of statistics like these, a tiered loyalty program really pays off by keeping the members coming back to the business. It might seem obvious that customer loyalty is paramount to business success. But cultivating customer loyalty is not such an easy task especially turning loyal customers into brand evangelists. Tiered loyalty programs encourage repeated purchases between the members, the core component of boosting life-long loyalty.

Let’s find out why!

Tiered loyalty program is an innovative membership program that rewards the members every time they make a purchase depending on their rank or tier. Tiered loyalty programs rank members into ranks (tiers) defined by a set of rewards or perks that eventually increases customer value as it progresses. Unlike traditional loyalty programs, they go beyond the ‘earn and burn’ philosophy to create a solidified bond with the members through a benefit structure. This is what makes them so powerful and engaging for potentially years to come.

Having tiers in your loyalty program inspire members to climb the loyalty program reward ladder and make them feel more invested in your brand. So, it is a win-win situation for your brand and your customers with these unique benefits –

  • Better segmentation – Companies can segment their customers in a more effective way by reviewing their shopping behavior, purchase habits and aspirations. On the other hand, customers will feel acknowledged that the brands look after them.
  • Engage customers – Use your creativity to create meaningful reward names and imagery to bring excitement to the entire reward scheme in your member’s life. You can also use tiered rewards for branding and prompt potential members to join.
  • Create incremental demand – Tiered reward scheme can be used to spur purchases that won’t be made otherwise. This will come as the by-product of the tiered program where each tier will bring additional rewards. Members who are on the cusp of qualifying a certain tier will often spend more to secure the higher ground.
  • Stay competitive – By attaching additional benefits like upgrades, add-ons, complimentary rewards, etc. to certain high-value tiers will encourage potential customers to choose you over the competition and also encourage frequent repeat purchases.
  • No expiration dates – Customers usually find themselves less inclined to membership programs that only offer points as points generally have an expiration date. Levels or tiers, on the other hand, keep members inclined to your brand and entitled to the benefits unlike with points.

Tiered loyalty programs work as incentives to keep up the interest of members far longer and make them feel stand out. The behavioral science behind tiered programs is the reason for customers getting addicted to this gameplay loop while adding an air of exclusivity to your loyalty program.