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Bubblehouse is the leading loyalty solution for brands and online stores.

February 7, 2024

Bubblehouse Guide: Traditional loyalty programs

As a business in 2023, you have access to many different loyalty programs that your business can engage with, in order to boost retention and customer loyalty with your business.

The advantages of loyalty programs are many, but I will not go into this in detail here, as we have written separate articles on the topic of loyalty, its importance, and how loyalty can be measured.

Major loyalty programs are already heavily utilized by a number of businesses ranging in size, so the need of implementing a loyalty program for any business looking to get more out of their existing clients goes without saying.

Point Systems:

This is arguably the most popular type of loyalty program out there. Point accumulation is used by pretty much every business that decides to engage in a loyalty program. They work by simply having the customer continuously accrue points on every purchase that they make at the company’s physical or digital locations. After a customer is able to accumulate a certain number of points, these can be exchanged for a cash value, or for a free product from the company. For example, you can think of Starbucks’ Stars that customers can collect every time they order. Once a Starbucks client gains 10 stars, they can exchange these stars for a free coffee.

Point systems can be done in the form of a punch card, they can be online, and they can be as intricate or as simplistic as you would like. Certain companies use the term “cash back” for their points-based loyalty program. This works very much the same as points in that for every purchase, a customer accrues certain points which can then, upon the customer reaching a certain predetermined number of points, be exchanged for a gift card. In this instance, each point a customer receives is given a cash value, so the customer is always able to calculate how much “cash” they have earned. This type of system is utilized by Honey, GNC, and many other DTC companies you will have definitely heard of.

Traditional Discounts:

A system that is also often utilized is giving customers consistent discounts once they sign up for an account with your company. This essentially means that the idea behind this loyalty program is to have your customers create accounts with your brand, after which you will reward your customers with sporadic discounts, offers, and exclusive promotions only available to your members. This system is widely used in pharmacies and physical shops like supermarkets. CVS, Gristedes, and Walgreens all opted for a system that falls under this category, where customers are sent regular newsletters which specialized promotions available only to them, which they can redeem within a certain time period (that is the main reason behind the infamous 3-foot-long CVS receipts that you may receive after any purchase there).

Walgreens uses a slightly different tactic to CVS where they do not send out special personal promotions to users, but have consistent discounts on different products within their stores, which can only be taken advantage of if you have signed up to their membership program.

Tiered Programs:

Tiered programs are essentially an extension of a points-based loyalty program and have become popularized following the inception of the many airline bonus programs that have been about since the late 90s. Tiered programs also allow customers to accumulate points for making purchases with the company, but instead of being able to redeem these points for free products or cash back, these programs unlock, certain levels that the customer is able to reach.

For example, take British Airlines, this airline has two different points available that customers are able to earn: Avios and Tier Points. Avios are the air miles that you earn, which you can spend on reward flights and certain upgrades. They are the equivalent of cash back. Tier Points, on the other hand, are points, which customers can accumulate, that do not have a way of being spent. What Tier Points allow you to do is to climb through the different status tiers that British Airlines offers within their Executive Club program: Bronze, Silver, and Gold. Upon unlocking these tiers, British Airways customers have a set of continuous perks that they can take advantage of whenever they fly including priority check-in, priority boarding, lounge access, free extra bags, and more.

Implementing a Tiered Program is another way to make sure your company is offering interesting perks to its customers without only relying on giving them the ability to get back some money from their purchases. Tiered programs allow the marketing team to be more creative with the different activations that are run.

Cause-Based Programs:

One slightly more unique loyalty solution is one that appeals to the emotions of buyers. Utilized by many brands that have a real cause behind them, cause-driven loyalty programs are a way to position your brand with the things that your team believes in or stands for. It is also a way to foster a deeper connection between your brand and the customer by showing them that your brand is not all about profits but is also trying to do good in the world. The program itself is rather simple, it involves donating a percentage of the customer’s purchase to the charity of your choice and using this charity work as the basis for your communication with customers about your loyalty program.

One example of this was done by Sephora who allowed the points of their Beauty Insider program to be used to donate to the National Black Justice Coalition. Such campaigns or loyalty solutions are instrumental in aligning a brand with important political or humanitarian causes, which improved the brand image in the eyes of current and potential customers.

Paid Loyalty Programs:

The most illustrative way of explaining a paid loyalty program is simply: Amazon Prime. A paid loyalty program is essentially the same as a paid membership program. This is when a business requires customers to pay a subscription for a specific service in return for benefits, access to special items, or unique services. Such a loyalty program is an effective way for a business to generate additional revenue, however, the caveat to it is that the products and services on offer behind the paid program must be deemed valuable enough for a customer to want to spend their money on it.

Amazon Prime is the most successful program of this nature. It gives its customers access to fast free delivery, the Amazon Prime Video service, and other additional Amazon tools. If done well, this is a great branding moment as it allows Amazon to promote Prime separately from Amazon, which adds an additional layer to customer communications.

Gaming Loyalty Programs:

Another way to build retention within your client base is by going outside the box. Starbucks introduced a new way of turning occasional customers into frequent customers. Through playing a mobile game, customers were able to earn extra points in their loyalty program, which took the relationship Starbucks built with their customers beyond the simple purchase and get rewarded model.

Gamifying your loyalty experience is also a very good way of streamlining the progression of customers through your different points or tiers, which makes participating in the loyalty program more worth it for your consumers. Instead of feeling like they need to purchase a lot of items to get rewarded with something small, they now get the sensation that if they spend enough time with the brand, they can earn their way to the rewards.


As you can see, there are many different ways that loyalty programs can look and feel like for a business. As the person in charge of retention and loyalty, it is your hub to understand what would relate to your customers so that you can pick the optional type of loyalty for you. Most of the time just having one solution is not enough for a business, as different loyalty programs offer slightly different benefits, so a healthy mixture of activations is the best way for a brand to move forward with implementing locality programs into their efforts of driving retention.

With Bubblehouse, you would be able to achieve all of the loyalty objectives achieved by every type of loyalty program mentioned above. Bubblehouse uses digital collectibles with personalized benefits that are issued to customers for completing certain tasks, so you can pick and choose exactly what benefits and tasks you would want your customers to achieve and unlock. Whether you want to drive your customers to more in-store activations, get them to make lifestyle choices that align with your brand’s causes, incentivize customers to attend your events, or whatever else it may be, you can make these the requirements needed to unlock certain collectibles which give your customers the benefits that they would most want. Collectibles offered by Bubblehouse are really here to drive experiential rewards, as a way to make you cultivate the brand that your company has. They are a way to look beyond price incentives, which can have the effect of turning brands into discount stores. Bubblehouse also offers traditional loyalty solutions to add on top of collectibles, so points, tiers, and more are also part of Bubblehouse’s customer loyalty program.

If you’re interested in learning more about Bubblehouse’s new approach to customer retention, feel free to schedule a 15-minute call.

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