Three common approaches to customer retention are benefit programs, points programs, and cashback programs. While they all share the goal of retaining customers, each has specific characteristics that make them more suitable for different types of businesses. Let's explore the differences between them with practical examples and guidance on choosing the ideal model for your company.
1. Benefit Programs
The benefit program offers direct and immediate advantages to the customer upon making a purchase or using a service, without the need to accumulate points.
How it works:
- The customer receives instant rewards like discounts, gifts, or free services after meeting a certain criterion (number of purchases or amount spent).
Practical example:
- In a beauty salon, after every 7 haircuts, the customer receives a free manicure session.
- In a clothing store, registered customers get a 15% discount on all purchases during their birthday month.
Advantages:
- Quick and easy-to-understand rewards.
- Strengthens emotional connection with the brand.
- Simple to implement and manage.
Businesses that fit well: This model adapts better to service sales than product sales.
- Beauty salons (e.g., “For every 5 hair treatments, get a free haircut”)
- Cafes (e.g., “Buy 9 coffees and get the 10th free”)
- Gyms (e.g., “Refer a friend and receive one month free”)
- Aesthetic clinics (e.g., “Get a free facial cleansing after 3 waxing sessions”)
2. Points Programs
In this model, the points program, the customer accumulates points with each purchase or specific action, which can be exchanged for products, services, or discounts.
How it works:
- With every amount spent or action taken, the customer accumulates points that are logged in a system.
- These points can be exchanged for specific rewards.
Practical example:
- In a supermarket, for every R$1 spent, the customer earns 1 point. Upon reaching 1,000 points, they can redeem a R$50 shopping voucher.
- In an online bookstore, the customer receives 5 points for each book purchased. After collecting 100 points, they get a free book.
Advantages:
- Encourages repeat purchases of higher value.
- Offers flexibility to customize rewards.
- Creates a sense of ongoing progress for the customer.
Businesses that fit well: Ideal for stores that sell everyday necessity products.
- Supermarkets (e.g., “For every R$1 spent, earn 1 point to exchange for discounts”)
- Pharmacies (e.g., “Accumulate points and exchange them for hygiene products”)
- Airlines (e.g., “Accumulate miles and exchange them for flights”)
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Fuel stations (e.g., “For every R$1,000 in fuel, get a free oil change”)
3. Cashback Programs
In the cashback program, the customer receives back part of the amount spent in the form of credit or money, which can be used for future purchases or withdrawn in some cases.
How it works:
- The customer makes a purchase and receives a percentage of the amount back as credit.
- This amount can be used for future purchases or, depending on the program's policy, transferred to a bank account.
Practical example:
- In an electronics e-commerce, the customer receives 5% of each purchase value as cashback to use in the next purchase.
- In a fuel station network, for every R$100 spent, the customer earns R$5 back for refueling on the next visit.
Advantages:
- Encourages loyalty as the customer returns to use the cashback.
- Offers transparency and ease of understanding.
- Ideal for encouraging higher-value purchases.
Businesses that fit well:
- E-commerce (e.g., “5% cashback on all purchases over R$300”)
- Delivery apps (e.g., “Receive cashback on orders over R$100”)
- Digital banks (e.g., “Cashback on purchases made with the card”)
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Electronics stores (e.g., “Receive double cashback on the purchase of phone accessories”)
How Smartbis simplifies loyalty program creation
Smartbis offers comprehensive solutions for the implementation of personalized loyalty programs. With an intuitive platform, it's possible to create, manage, and track the results of benefit, points, or cashback programs practically and efficiently.
Smartbis Differentials:
- Full automation: Manage rewards and monitor performance in real-time.
- Personalization: Create programs tailored to your audience and sector.
- Detailed reports: Advanced analysis to understand customer behavior.
With Smartbis, your company attracts more loyal customers, increases purchase recurrence, and stands out in the market. Explore the possibilities and transform your customer's experience!