Skip to Content
Loyalty programs: How they work
Loyalty programs can encourage customers to continue purchasing from your brand. Learn why that’s important and explore examples you can emulate.
Last updated January 20, 2025

Any business knows it can’t just open up shop and expect customers to come rolling in—they need to be motivated to buy. In many situations, an excellent product or an outstanding customer experience (CX) will do the trick. Sometimes, however, organizations need a dedicated strategy to entice customers to continue buying.

Customer loyalty programs reward repeat customers with product discounts, special offers, and other benefits. This guide covers how these programs work, their benefits, and how they contribute to positive CX.

More in this guide:
Benefits of customer loyalty programs
Boosts revenue and retention
One of the main benefits of customer loyalty programs is that they’re an effective way to increase revenue and boost customer retention.
Builds stronger customer relationships
Establishing a loyalty program can help you connect and build stronger customer relationships.
Shows customer appreciation
A customer loyalty program is one of the best ways to show customer appreciation. While many programs are based on spending volume, you can get creative with the rewards you offer.
Motivates consumer behavior
These programs can encourage customers to take certain actions. For example, you can entice customers to sign up for an email newsletter or text alerts by offering a discount code.
Builds stronger customer relationships
Point systems are among the most popular programs. They reward customers with points for completing designated actions like purchasing or submitting feedback. Customers can redeem points for:
  • Credit toward their next purchase
  • Discounted services
  • Giveaways

Customers can track their accumulated points with a loyalty card, online account, or mobile app. A points program is a fairly recognizable reward format for customers. They understand how to take advantage of it, so it’s an easy way to build customer loyalty.

Tier-based programs
Tier-based programs give consumers rewards based on their level of spending. For example, a business could have a “diamond level” tier that customers can access after spending $10,000 within a year. These diamond-level customers could earn exclusive pricing for your most expensive products and services.
A tier-based program can motivate your customers in lower tiers to spend more to reach the next level. The more exclusive the reward, the greater the customer appeal.
Mission-based programs
Not every rewards program focuses on tiers and discount codes. If your company is highly mission-driven, you may want to try a customer loyalty program with a cause. Mission-based programs make offers like “5 percent of purchases go towards the charity of your choice.” These programs can be more effective when you partner with a nonprofit organization that strongly connects to your company’s mission.
Have Questions?
Is DeliPal a Point of Sale?
DeliPal is not just a POS; it is a powerful ERP software designed on the open-source Odoo platform, specifically customized to cater to the unique needs of the restaurant business. It is modular in nature, with an array of apps that can assist you in managing various business processes such as Purchase, Sales, Inventory, Manufacturing, Human Resources, Financials, and more. It revolves around an interactive POS system that is tailored to the restaurant industry, enabling your guests to connect with you and take Guest Engagement to the next level.
Who built DeliPal?
DeliPal is not just a POS; it is a powerful ERP software designed on the open-source Odoo platform, specifically customized to cater to the unique needs of the restaurant business. It is modular in nature, with an array of apps that can assist you in managing various business processes such as Purchase, Sales, Inventory, Manufacturing, Human Resources, Financials, and more. It revolves around an interactive POS system that is tailored to the restaurant industry, enabling your guests to connect with you and take Guest Engagement to the next level.
Why is dish-by-dish feedback important for a restaurant?
DeliPal is not just a POS; it is a powerful ERP software designed on the open-source Odoo platform, specifically customized to cater to the unique needs of the restaurant business. It is modular in nature, with an array of apps that can assist you in managing various business processes such as Purchase, Sales, Inventory, Manufacturing, Human Resources, Financials, and more. It revolves around an interactive POS system that is tailored to the restaurant industry, enabling your guests to connect with you and take Guest Engagement to the next level.
Why is it important for the feedback from guests to be instant?
DeliPal is not just a POS; it is a powerful ERP software designed on the open-source Odoo platform, specifically customized to cater to the unique needs of the restaurant business. It is modular in nature, with an array of apps that can assist you in managing various business processes such as Purchase, Sales, Inventory, Manufacturing, Human Resources, Financials, and more. It revolves around an interactive POS system that is tailored to the restaurant industry, enabling your guests to connect with you and take Guest Engagement to the next level.
Mission-based programs
Not every rewards program focuses on tiers and discount codes. If your company is highly mission-driven, you may want to try a customer loyalty program with a cause. Mission-based programs make offers like “5 percent of purchases go towards the charity of your choice.” These programs can be more effective when you partner with a nonprofit organization that strongly connects to your company’s mission.
Address:
28-30 G-ral. Gheorghe Magheru Blvd., District 1, postal code 010336, Bucharest, Romania
Telephone:
+40.318.059.211
Fax:
+40.318.059.602

Are you a restaurant?

Running a restaurant is tough. DeliPal helps you gather real-time guest feedback, streamline orders, and boost loyalty – all in one simple platform.

More Returning Guests

Turn feedback into action and boost loyalty

shape

Higher Operational Efficiency

Less wait time, more table turnover

shape

Smarter Decisions

Understand customer preferences and optimize menu

shape
Learn more
Mission-based programs
Not every rewards program focuses on tiers and discount codes. If your company is highly mission-driven, you may want to try a customer loyalty program with a cause. Mission-based programs make offers like “5 percent of purchases go towards the charity of your choice.” These programs can be more effective when you partner with a nonprofit organization that strongly connects to your company’s mission.
We started using DeliPal to collect dish-level feedback and reward guests for sharing it. Within weeks, we noticed more returning guests — especially those who used the app. After two months, our customer retention grew by 28%, and our staff felt more in control during busy hours. After two months, our customer retention grew by 28%,

Cristian

Restaurant Coliba Haiducilor

Mission-based programs
Not every rewards program focuses on tiers and discount codes. If your company is highly mission-driven, you may want to try a customer loyalty program with a cause. Mission-based programs make offers like “5 percent of purchases go towards the charity of your choice.” These programs can be more effective when you partner with a nonprofit organization that strongly connects to your company’s mission.