Main Types of Loyalty Rewards

  • 08 Mar 2017

Loyalty rewards can be split in two major categories – “soft” rewards, including different benefits and privileges, and “hard” rewards, including loyalty points and discounts. The majority of loyalty programs still focus on hard rewards, which can be easily related to the amount spent by customers.

Some of the most successful loyalty programs include a combination of soft and hard benefits. Generally, customers in lower tiers are offered hard rewards, such as points, prizes and discounts, while customers in higher tiers are given soft rewards, including status, recognition and preferential services.

Soft rewards

As technology enables better targeting and personalized offers, loyal customers are being rewarded with different personalized services, including personal shopper services, entertainment tickets, concierge, early access to special collections, family offers and many others.

According to recent research, soft rewards are remembered the longest and have the most long lasting impact in consumers’ mind. So not miss to include them in as part of your loyalty program.


Discounts are one of the most popular forms of loyalty rewards. They can be classified in two major categories – targeted and untargeted. The untargeted discounts, however, usually have a little value in building loyalty.

The targeted discounts, such as two-tier pricing, for example, go one step further. In the most typical case, certain items are given two prices – a standard price for regular users and a lower price for members only.

Such type of programs are often referred as a price-based programs and are popular among customers as they provide immediate and often quite substantial rewards.

Loyalty Points

Loyalty points are the most popular rewards mechanism in most loyalty programs. In this case, the reward options are basically unlimited. Points can be used to earn discounts, take advantages of different privileges, used for cash back or get rewards from participating partners.

To learn more about loyalty programs and rewards, contact us at .