Bonus point systems – pros and cons

When starting a loyalty program, it is important to think about the type of benefits you should have. Welcome and birthday coupon deal with what we call the onboarding program. This is where you recruit new members. The benefits program, on the other hand, will help make your customers / members even more loyal to your particular store / chain. There are many paths to success here. In this article, we give some examples of how this can be done, with some of the advantages and disadvantages with the various alternatives.

1. Standard bonus ladder: Bronze – Silver – Gold
2. Bonus ladder with various membership benefits
3. Point level coupons
4. Coupons without the use of points
5. Loyalty card

1. Standard Bonus Ladder – Bronze – Silver – Gold

The standard bonus ladder is inspired by the aviation and hotel industry; you get different discount levels / benefits as you climb the ladder. For example: Bronze – 5% discount, Silver – 10% discount, Gold – 15% discount. Qualification period and point life can be asynchronous, but most programs keep them equal in 1, 2 or 3 years duration. A member must within each qualifying period earn the necessary points to achieve the same status. You must decide whether the member will receive the discount with each purchase, once, or if they should receive X number of coupons within each level.

BENEFITS

  • A familiar system to most people.
  • Generally easy to understand for members.
  • You can still provide other additional coupons for all members during given promotion periods.
  • Fully integrated with all checkout systems.
  • Fully integrated with WooCommerce.

 

DISADVANTAGES

  • May limit the most-buying customers.
  • Coupon duration – if you reach the next bonus  level the day before the qualifying period is over, you go down again the next day.
  • Customers will not be notified when they have reached a new level (SMS).

 

2. Bonus ladder with various membership benefits

This variant is quite similar to the bronze, silver and gold levels, but with different names. This model is most often used by online stores to provide a good customer experience.

BENEFITS

  • Generally easy to understand for members.
  • You can still provide other additional coupons for all members during given promotion periods.
  • Gives customers a sense of an exciting bonus program with various benefits when they are loyal.
  • Fully integrated with all checkout systems.
  • Fully integrated with WooCommerce.

 

DISADVANTAGES

  • May limit the most-buying customers.
  • Coupon duration – if you reach the next bonus  level the day before the qualifying period is over, you go down again the next day.
  • Customers will not be notified when they have reached a new level (SMS).

 

3. Point level coupons

This means that for every X Euro spent, you get a voucher or percentage discount on your next purchase. For example, for every Euro 2,00 spent, you will receive a Euro 10 discount. If you earn many points, you will be given the choice of using a Euro 10 discount (200 points), Euro 20 discount (400 points), Euro 30 discount (600 points) or NOK 40 discount (800 points). You can easily choose at checkout which coupon to use.

BENEFITS

  • Very easy for customers to understand.
  • Generates loyal customers quickly – purchases directly provide future discounts.
  • Easy for employees to explain / sell to their customers.
  • Continues indefinitely.
  • Can also create their own coupons / promotions for periods.
  • Fully integrated with all checkout systems.
  • Fully integrated with WooCommerce.

 

DISADVANTAGES

  • Can only have one recurring coupon.
  • Can only have the same benefit in the loyalty program (excluding own coupons / promotions).
  • Customers will not be notified when they have received a new coupon (SMS).

 

4. Coupons without the use of points

For instance when having a sale, you can create a separate campaign that is sent by SMS to everyone or a segmented group of members.You will get valuable statistics on who uses the coupon (s). Even if you have a sale that applies to all members, it can be an advantage to enter a coupon that is registered on the member at the time of purchase. Then you will build up history on your members, what they shop for, how often, if they only shop for sales, etc.

BENEFITS

  • Valuable statistics providing the purchase patterns of your members. It allows you to run an even more relevant campaign next time, and it increases loyalty as you get more and more relevant to your customers.
  • You can set up coupons / promotions ahead of time, which will be activated automatically at the set time.
  • SMSes can similarly be set up in advance and sent out at the set time.
  • Fully integrated with all checkout systems.
  • Fully integrated with WooCommerce.

 

DISADVANTAGES

  • Must make a coupon in Diller that pops up in the online store or at checkout. However, this is done very quickly, so we would probably say that the advantages clearly outweigh this small disadvantage.

 

5. Loyalty card

Most people are used to the old paper loyalty cards. For example, for pet store, coffee shop, or for filling gas bottles. You can get a digital loyalty card right at the checkout, and the member can follow their status via their member page.

BENEFITS

  • Digital loyalty cards do not require members to remember paper cards – only a mobile number.
  • If you do not have a bonus point model, you may use loyalty cards instead. For example, for every tenth clip (one clip for every Euro 25) you get a Euro 15 discount. This corresponds to a Euro 15 discount for every Euro 250 bought on a recurring coupon.
  • You can receive reports per month for the number of clips used per loyalty card.

 

DISADVANTAGES

  • Not fully integrated with all checkout systems.
  • Not fully integrated with WooCommerce (can display status, but not used in online store).

 

If you have any questions about how to build the best possible benefit program for your particular company, just contact us. We can meet by phone, e-mail or chat. We are here to help! Get in touch
"A large proportion of those who shop are members of the loyalty program. I have no doubt that much of the growth is due to increased loyalty from members. I am sure it's an important factor."

Kai Gulbrandsen

CEO, Princess retail chain

"The loyalty program button is on the front page of the cash register, so everything is automatic. Our members use the stamp cards and coupons because it’s so easy to use. We see that we get higher sales from members than non-members."

Evy Ingebrigtsen

Operations and HR Manager, Baker Brun

"Data is the new gold. It is essential that purchase information and customer data form the foundation for all good customer dialogues. Having control over this is in my opinion absolutely crucial."

Pål Wibe

Norway's "Mr Retail" Pål Wibe

"A terrific app that really helps our business to grow together with our customers. Adds value for both us and the customer, a complete customer journey from the physical to the online store."

BMB Paleet

"Thank you very much for the fantastic follow-up when we launched our loyalty program from Diller. You guys made the whole process painless. Looking forward to seeing what we can achieve together. We really recommend Diller AS to anyone that need a loyalty program on the Shopify platform."

Bolina

Furniture and Interior Design

"Advertising must be planned 2 weeks in advance, but at that time the campaign may be completely irrelevant. With Diller we can turn around and act in no time! We can put out a campaign overnight. This is absolutely invaluable to us."

Tone Tengesdal Stavnheim

Tengesdal Sport

"I would never buy a cash register system without an integrated loyalty program. For me, it was essential to have a good loyalty program included in the POS."

Maria Quarnström

Owner, Rilo Zoo

"We recently startet using Diller and are very pleased with the app. It is easy and understandable to use, and it has already generated more customers and sales. What is important to mention is that the customer service is outstanding, and we are getting all the help and support we need! Our contact has been patient and so happy to help and guide in out teams-meetings for the set up :)"

Shine

Design

"Great app and customer service! The loyalty features combined with the SMS engine and mail integration towards MailChimp is a winner for me. Thanks to Erik for helping me set everything up!"

Henriks Herre

Men's fashion

"Great app, easy to customize and simple to use. Customer service is outstanding and helpful. The few times we have had any issues, customer support was very responsive and resolved the issues in minutes! Highly Recommend!"

MARK+BRANDY

Fashion

"We see great results from the loyalty program. The immediate feedback comes from employees in the store, who notice that customers enter the stores only 5-10 minutes after we send out an SMS."

Stine Handley

Head of Administration, Fredrik & Louisa

"Very easy to set up the app. It’s perfect for creating a good-looking loyalty program widget, that is customized to my brand and webshop.   Super friendly and helpful support team! They answer very fast and do everything to help you out.  Great experience so far."

Corado Coffee Roasters

"We see that average sales and margins are higher even though we offer a 10% welcome discount. As a customer, you are welcome to bring a little extra in the shopping cart to get the most out of the deal. The goal is for the loyalty program to be the icing on the cake for our customers so that they want to continue shopping with us."

Jon Grøteig Andersen

Head of Marketing, PetXL

"I searched the web for suppliers and found Diller that way. They have everything I need in a loyalty program, and for me, it was an added advantage that it is a Norwegian company."

Hans Hvinden

General manager, Hageglede.no

"We have seen that it is not just discounts that attract customers. For example, when we send out an SMS about new products from one of our brands, traffic to the stores increase, since the members like to get early product information."

Martine Remsøy Romøren

Store manager, Lively

"When customers shop in our store, we ask them if they want to be members and tell them that they get bonus coupons depending on purchase levels, invitations to events and other benefits. Everyone signs up!"

Heidi Andersen

Store Manager, Coco Skien

"The big advantage of the loyalty program is that it becomes easy to communicate with customers. We see endless possibilities with this in the future and look forward to using it more."

Anders Johan Braaten

General manager of Buster Hund og Katt