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What is loyalty marketing and how can it work for you?

There's a lot more to loyalty marketing than just handing out rewards. It’s a strategy built on relationships: encouraging customers to choose your business repeatedly through meaningful engagement. So, what is loyalty marketing exactly? How does it work in practice? Read our Ello Group guide below for the answers.

Kristina Singleton

07-08-2025

People discussing business with paperwork and a laptop

What is loyalty marketing?

Loyalty marketing is about rewarding customers not just for spending money but for choosing your brand again and again. It’s a loyalty scheme that utilises incentives such as discounts, perks, early access, and exclusive content to foster long-term relationships with your most valuable customers. 

But it’s not just about giving things away. Done right, loyalty marketing encourages repeat behaviour, increases engagement, and provides insight into what your customers truly care about. It’s a two-way street: they stay loyal, and you keep offering something worth staying for.

Why does loyalty marketing matter?

Not focused on turning one-time customers into repeat customers? Here’s what you’re missing out on:

Loyal customers give you money. 

Keeping customers loyal isn’t about getting a warm, fuzzy feeling or making friends (not that that hurts). It’s about the bottom line – it’s profitable. Depending on your industry, loyal customers may be likely to spend more per transaction, try new products, and add on extras without needing a push. They don’t need to be convinced because they already know the value of what you offer, and that trust translates directly into revenue. A strong loyalty strategy turns that steady spend into something you can rely on. 

Loyal customers don't give money to competitors.

Every time a customer chooses you, they’re not choosing someone else. When a customer is loyal – when they’re earning points, getting perks, and feeling recognised – they’re less likely to be tempted by a discount somewhere else. Loyalty marketing helps you secure your share of the wallet and maintain it. 

Targeted marketing keeps acquisition costs low.

New customers are expensive to find. Running ads, promos, partnerships and all kinds of customer acquisition strategies all add up. But when you’ve got a base of loyal customers, you can focus your spending more efficiently; loyalty programmes create a direct line to people who are already interested. You can personalise your campaigns, cut wasted spend, and use insights from loyal behaviour to shape more innovative strategies.

What does effective loyalty marketing look like?

It’s one thing to understand the benefits of loyalty marketing, but it’s another to implement it successfully. Here are some tried-and-tested tactics that can help you do just that.

Offer meaningful incentives and rewards.  

Rewards only work if people actually want them. That means knowing your audience and offering perks that feel like a genuine thank-you, not an afterthought. At Ello Group, we work with businesses to identify the rewards that mean something to their audience: movie discounts, pizza, coffee, money off attractions or products – whatever your customer wants, they can get, and it’s you they’ll thank.

Make it easy for customers to engage. 

If joining your loyalty scheme feels like filling out a tax return, people won’t bother, so keep the process simple. Make it quick to sign up, easy to earn points, and obvious how to redeem them. A seamless, hassle-free experience is part of the reward.

Use data to personalise the experience.

Loyalty marketing isn’t just about throwing out offers and hoping they stick. Use what you know. Tailor messages, suggest products based on past purchases, celebrate birthdays, and acknowledge milestones. Personal touches build connection, and connection builds loyalty.

Keep evolving your loyalty strategy over time.

What worked last year won’t always work next year. Keep checking in with your customers. What do they like? What could be better? Use feedback, look at the data, and don’t be afraid to update your programme to keep it relevant.

Want to build customer loyalty that lasts? Let’s talk.

At Ello Group, we help businesses create bespoke benefits schemes that genuinely support employees. We work with thousands of businesses, creating tailored loyalty and rewards platforms with a range of work-life balance perks. Did you have dining rewards and entertainment benefits in mind? Or do you prefer the idea of coffee shop rewards and cinema rewards? Whatever the case, we’re pretty sure your customers will love the savings that Ello Group can offer them.

Get in touch with our team of experts to discuss the perfect solution for your organisation today.

 

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