The Next Era of Loyalty Programs

May 21, 2019 • 4 min read

loyalty programLoyalty programs are common among companies to retain their existing customers and attract new ones. More and more businesses are using loyalty programs to reward their customers for repeat purchases of their products and services.

According to a research conducted by IRI Worldwide, 74 percent of customers look for a strong loyalty program before choosing a store. Although loyalty programs help in retaining existing customers to some extent, most businesses experience customers shifting to other brands after some time.

What causes this switch?

This is largely due to the changes in their expectations and behavior. A loyalty program can retain customers but encouraging them to advertise your brand requires you to make changes to your marketing strategy.


Advocacy marketing

Advocacy marketing AKA word-of-mouth marketing, plays a key role in the next era of loyalty programs. As the expectations of customers increase, the effectiveness of loyalty programs decreases over time. Hence, businesses need to think beyond loyalty programs to engage customers and acquire new ones. It is evident that many popular brands today use advocacy marketing to sell their products and services.

When customers favor a brand and the products or services it offers, they are likely to communicate with others about their experience with the brand. Moreover, they make repeat purchases and stay loyal to the brand. Businesses must know how to take advantage of this opportunity and figure out ways to equip these satisfied customers with the necessary tools to advocate for the brand.

Such customers are the most prominent marketing assets of a company that helps in growing its business and revenue. Organizations using advocacy marketing programs spend little to nothing on advertising and focus on developing quality products and services instead. The Return-On-Investment (ROI) they receive makes it a no-brainer to continue utilizing the power of word-of-mouth. Traditional loyalty programs reward their customers for repeat purchases. Now, they offer more rewards for referring new customers.


From customers to advocates

To encourage customers to convert to brand advocates, businesses need to incentivize their customers. They may choose to offer memberships, referral points or digital rewards to customers to nurture strong relationships with them and spread positive word of mouth.

Businesses often provide solely membership services to customers and neglect other aspects. What they do is throw money at physical membership cards and offer free rewards hoping that their customers will somehow come back. This is not how you gain loyal customers. You must go beyond loyalty and combine a variety of offerings to successfully turn your customers into active advocates.

TADA is an example of a beyond loyalty program provider. TADA enables businesses to easily manage their digital membership and disburse incentives and points to customers for making repeat purchases, giving feedback, and sharing on social media. Referral rewards are also given if an existing member brings in a new customer.

If you want to turn your customers into brand advocates, you may choose to spend time and effort in creating a solid membership system, good rewards and referral incentives, or invest in a beyond loyalty program provider such as TADA.



Loyalty programs may or may not be beneficial for your business due to the frequent changes in the expectations of hyperactive customers, which forces businesses to move beyond loyalty programs. A reward program that works for a business may not work for others. Therefore, companies should combine various strategies and tactics to see what suits them. The road to achieving active advocates for your brand is not easy.

Understanding the changing needs and preferences of your existing and potential customers is crucial to ensure that your loyalty program is a success.


Interested to find out how to incorporate this seamlessly into your current program?

Let's Talk to TADA Team

TADA is an end-to-end customer retention platform that improve businesses sustainability by retain their customers better.


Clara Alverina

I'm marketing enthusiastic and inherently understands that the customer is the single most valuable asset an organization can have, and driven by the unrelenting pursuit of customer-retention focus, engagement and customer experience.