The importance of loyalty programs for the main industries

The importance of Loyalty Programs


reading time 5 minutes

Customer Loyalty: why is it so important?

Let’s answer this question right away. We think about the costs that companies have to incur when acquiring new customers. For many entrepreneurs, the goal is to attract new consumers, without considering the possibility of retaining those they already have. Did you know that creating a solid and loyal customer base requires 5 times lower costs than the activity of winning new ones? Having a relationship of trust with customers doesn’t only mean being able to compete in the market, but also establishing a relationship in which the customers themselves become brand promoters.

Loyal customers spend 67% more money than new ones.

Loyal customers spend more than new ones who have an exploratory approach to the brand. On the contrary, loyal customers are encouraged to spend more thanks to the bond that has been established with the brand over time.

Some statistics on consumer loyalty show how a 5% increase in loyal customers corresponds to an improvement from 25% to 95% in corporate profits (ReSci, 2021). Loyal customers are also those who generate profits equal to 8% of sales made through online stores.

Loyalty programs

Loyalty program: how to build the customer loyalty

Loyalty programs are tools used by companies to retain their customers and over the years they have evolved and digitized so that they can be applied in physical stores, in e-commerce and for those businesses that provide a strategy based on an omnichannel approach. What is the purpose of loyalty programs?

  • Reward the most loyal customers
  • Stimulate buyback
  • Consolidate the relationship between customer and brand


A form of gratification that benefits both the brand and the customer.

Loyalty programs can be used to retain customers of B2C and B2B companies. In the first case, the target is represented by the consumer. In Business to Business, the target varies according to the company and can be represented by the sales force, trade, dealer, wholesalers. Let’s discover together what are the main benefits of using a loyalty program:

  1. Offer the customer a reason to repeat the purchase;
  2. Discourage the consumer to buy from competitors;
  3. Generate a sense of belonging and sharing of values among users;
  4. Increase corporate revenues and profitability;
  5. Acquire data and information on customers and their purchasing habits.
Loyalty programs
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Chap 1.

Also in the utility sector, customer experience is the key word 

Over the past decade, utility companies have completely redefined their approach to business and embarked on a journey of digital transformation. Despite the pandemic, investments are increasing and this is confirmed by different factors: resources used, digitization of mobility, cybersecurity. However, the main challenge is knowing how to retain your customers. Until a few years ago this market was monopolized by a few giants with solid business models, but today it’s a different story. Over time, the market has expanded and companies have grown, transforming the playing field into a hyper-competitive context. This is how the giants of the sector have redefined structures and identities, focusing on sustainability and turning the spotlight on the individual customer. Therefore, the focus is on involving consumers, guaranteeing them a better experience. What is the customer looking for?

The current customer wants to use services in a simple way. An ease that concerns:

– the technology used;

– processes towards customers;

– data management.

In the utility sector, it can be more difficult to invest in the customer experience. This doesn’t mean that there are no strategies and tools to do it. Suppliers must go beyond consumer expectations to offer an omnichannel, personal and fully integrated experience. This obviously requires a business, market and target audience analysis, which means: knowing the customers, critically analyzing the processes and steps to face, introducing digital transformation to relaunch the business.

Chap 2.
Loyalty programs for the utility sector

Competing in the utility sector doesn’t mean focusing on the price to guarantee the most convenient offer. The key to success lies behind the dialogue with consumers and a highly personalized strategy. Customers represent the true assets of companies and engaging and retaining the existing ones is the most effective way to increase turnover and improve positioning in the market. Obviously, these are complex challenges, in a context in which the consumer is increasingly informed, involved and, above all, free to change suppliers at any time.

The goal for companies in the utility sector is customer loyalty with the possibility of cross-selling and up-selling operations. We have already described the percentages and investments necessary for the acquisition of new customers, as well as the activities necessary to retain the existing customer base. But the utility sector data highlights some really interesting aspects.

In Europe, the annual average of users changing suppliers is between 12 and 15%. The churn rate represents a significant problem that must be countered with dialogue and engagement strategies that allow for increasing customer loyalty.

Loyalty is almost a state of mind of the customer, which shows that they prefer the products or services of a company to those of the competition, on an ongoing basis.

Companies in the utility sector offer essential services that affect people’s daily lives. These are not highly appealing products but something that the user takes for granted and their absence can lead to significant problems. This is why, for companies in this sector, it is more appropriate to talk about behavioral loyalty, which specifically measures the actual behavior of customers. Therefore, companies should ask themselves a few questions: are people still doing business with us? Are they interested in up-selling and cross-selling opportunities? How do they communicate with us? Through which channels? What are their preferences? Customer care is a crucial issue, actually. It is enough to say that 89% of customers switch to a competitor because of negative customer service experiences. For this reason, companies are investing in effective 24/7 customer support, tailored to the individual user, based on an in-depth analysis of their characteristics and how the customer has acted in the past.


Chap 3.
The importance of analytics before applying any kind of loyalty program

Are you struggling to decide what kind of loyalty program you should adopt? You want to find out how to really satisfy your customers? The answer is in the data! Before considering what kind of loyalty program you should implement in your business, you should first focus on analytics. All you need to do is analyze your target audience and all the information you already have about it, always trying to find out more.
Analyzing your target audience can actually help you discover what your customers really want and prefer. For example, an important information to keep an eye on is the price level your audience is willing to spend for your products/services and, above all, when it feels more engaged with your brand and offer.         

Here are some steps you can follow to better understand your customers needs and preferences before adopting the right loyalty program:

Conduct a proper analysis of your customers’ desires         

In this way you can understand how your customer retention is performing on different levels such as the after-sales services you offer, the fairness of prices, the level of engagement.

Keep an eye on buying patterns

Knowing how your target audience buys is the first step to know exactly what it expects from you. In this case you can analyze what type of channels your customers prefer to buy from, how they search for information about products/services, what are their shipping preferences, when do they expect a discount and when, instead, they are willing to pay more.

Measure the satisfaction level

Use social media or review websites to investigate what your customers think about you. You will find or receive very precious feedback, on which you can base your customer retention and customer loyalty strategies.

Communicate more

Establishing direct and continuous contact with your customers will tell them that you are always by their side taking care of what they need. Let them know when there are discounts or promotions specifically dedicated to them and ask them if you can do more to meet their satisfaction.

In the past, for customers it was actually difficult to switch between different suppliers in the utility sector. However, nowadays things are different and customers can easily understand what kind of supplier better meets their needs and choose it over others.
What utility companies really need to do is to focus on motivating and engaging customers rather than simply offer them static transactional approaches. 
Let’s find out together what companies in the utility industry should do to boost customer loyalty and implement a specific customer loyalty program in their business.

Chap 4.
How to boost customer loyalty in the utility industry

4.1 Some useful advices


Especially in the B2C world, companies from different industries are experimenting various strategies to engage their customers and, above all, to reward them for brand linked activities they perform. Just think about the possibility, in the hotel and tourism industry, to let customers gain some points and discounts to re-use in other occasions if, for example, they ask to clean the room less often or simply use fewer towels. Well, the utility sector can implement similar strategies too. For example, it can reward customers who save energy by offering some interesting products/services for free, such as vehicle charging stations or sensors that optimize the energy use.


Both Millennials and Gen Z are used to manage most activities on their mobile phones. They love a company that offers an omnichannel customer experience, allowing them to purchase and manage orders via app or internet. What can a utility industry do in this case? To meet these needs, offering the possibility of seeing bills and choosing an automatic payment method, for example, could be a good idea. Having a personalized mobile app can really make a difference, letting the company stand out in the market, since nowadays very few businesses in the utility sector have one.
The app can also answer the need of establishing a direct and fast contact with the brand, actually saying to the customer “we are here for you whenever you need us”. 


Today energy saving is one of the main goals for homeowners, both to save money and be sustainable. However, it is often difficult for them to know how to do it in a proper way, considering that they try to use complex energy-saving IoT devices to meet their goal. How can utility companies intervene? They can simply improve their informational resources and customer service to guide customers through the use of these tools. In this way, customers will be thankful to utility companies continuing to choose their offer.


One of the best ways to start a loyalty program is to convert passive customers into active ones. How? Utility industries should consider a partnership with businesses that offer products/services that their target customers really love. It doesn’t matter if the chosen partner belongs to a completely different industry, what matters the most is to award customers with exceptional treats. So do your research and be creative: hotels, restaurants and cinemas are all good ideas. The result? Customers will enjoy an experience thanks to their supplier, reinforcing their brand loyalty.


Last but not least, when it comes to rewarding customers, utility companies should focus on personalization. Again, data and information about your target audience can really help you in the process of personalizing the awards, allowing you to create targeted promotions and giving customers what they really want. 

4.2 Don’t forget about gamification!

Nowadays, Gamification is one of the most appreciated and useful trends to improve user engagement, bringing customers closer to brands. Well, the utility sector too should adopt such strategies to better activate and satisfy its target audience. How? Energy and utility businesses can think of various strategies to meet different goals such as: maximizing customer engagement, encouraging behavioral change, educating and increasing awareness.
Let’s consider some interesting ideas to reach these goals:

Engaging customers in utility’s operations: Customers can report problems in order to give useful feedback to companies and help them offer a better service. To encourage such initiatives, utilities can insert gamification formats in the apps or platforms already used by customers, while rewarding them for the given help.

Increasing awareness: Utilities can create game platforms to track how much energy or water their customers are saving. These platforms can enable challenges between different households. The result? Using gamification to encourage good behavior in terms of sustainability. For example, a game solution for utilities can be to involve different households in a competition and then award points and discounts to the one that performs the best energy-efficient and saving actions.

Promoting new services: Utilities can offer points, discounts or free-trial to customers who try new services. In this way customers are satisfied because with a simple action they know and try a new and useful service and they are more willing to continue choosing and paying for it in the future.

We talked about the importance of loyalty programs and how utility companies could adopt them in their business. Today more than ever it is clear why this industry needs a radical change in the way it engages and retains its customers. What do we mean? The utility sector must do its best to change the perception of both market and users. They see it as a simple service provider, while it has all it needs to offer more than that. Utility companies should then act as active players in customers life, like entities that are able to customize their service offering an added value to the market. And what better way than to adopt a loyalty program that engages customers while letting them save money and promoting virtuous behavior?
Don’t wait any longer, start now to implement your loyalty program!

Chap 5. Retail Industry: Winning the trust of customers with loyalty programs

With increasing competition, retail companies need tools and strategies to stand out in the market and gain the loyalty of their customers. In fact, people want to be involved and have a relationship with their favorite brand; the emotional aspect is more important than the economic one and consumers expect benefits in exchange for their loyalty. In this way, companies can obtain detailed information about their customers (demographics, purchasing habits, product preferences, etc.) which can be used to create customized loyalty programs.

The pandemic had a profound impact on purchasing behavior and consumer expectations, testing the characteristics of existing loyalty programs. During 2020, the way consumers shop online has changed completely: they frequently turn to partner channels and are willing to change brands if they find greater value, availability or convenience.

Creating a good loyalty strategy is very important! 


of companies offer a loyalty program to their customers.


of consumers are more likely to stay loyal to a brand that offers a loyalty program.


of consumers say that the possibility of receiving rewards changes their purchasing behavior.

What do you need to build customer loyalty in the retail world?

The main strategy is to consider each customer as an individual and not as a number among many. In fact, loyalty does not depend on the products or services sold but on the emotional connection that is generated between people and brands. Customers tend to reward, through their loyalty, the brands that best meet their needs, offer exclusive shopping experiences and personalized promotions. All these elements transform customers into supporters of the brand, thus increasing its notoriety and influence.

So why is it so difficult to gain people’s loyalty?

First of all, companies must become aware that it is necessary to redefine the logic of traditional loyalty programs, focused on transactions and set on impersonal data. Today, loyalty can no longer be based exclusively on purchases, points or levels but must be integrated into the entire organization and purchasing process.

This guide is intended to help retail leaders create a new approach to loyalty programs by providing an overview of all programs applicable to the industry and the benefits they will reap.

Chap 6.
The loyalty programs for the retail sector

The loyalty programs of the past required significant investment and time to be implemented, often not being functional once they arrived on the market. Today, with solutions like Bit2win Loyalty Management, you can quickly and easily configure loyalty initiatives.

  • Program setting: define the duration, model and activity on which the loyalty program is based;

  • Creation of the members life cycle: set the type of subscription and target the most suitable offer based on customer data;

  • Behavioral assessment: evaluate user behavior based on program goals and engagement achieved. Configure rewards and experiences and activate follow-up actions when necessary;

  • Performance analysis: analyze the information obtained from the program and its effectiveness in terms of sales and engagement.


The tiered loyalty programs are types of subscriptions in which customers obtain benefits based on the level reached. The metrics that companies use to rank users are often related to sales or engagement. The higher the level a customer reaches, the better the rewards.


This type of loyalty program aims to encourage recurring behaviors and creates a sense of achievement in consumers by associating each proposed challenge with an advantage. To make progress, customers must repeat valuable brand actions, following instructions in a fun way.


It is a loyalty program based on traditional logic: customers earn points based on the money they spend. The differentiating factor is the ease of integration as the redemption rate of the rewards is limited by the rewards available. Customers benefit from these programs as the perceived value of the award is greater than the actual cost.

Chap 7.
How to stand out as a retailer? Take a look at these best practices

Retail customers are the most demanding ones. Why? Probably because the products this kind of industry offers are commodities used every day. Thus, consumers are more interested in the services linked to them or in living an engaging shopping experience that brings them closer to the brands.
Just to make a few examples, people love services such as free shipping, extended return periods and coupons. So, why not leverage a retail loyalty program that rewards customers with what they want? But there’s a lot more in the world of retail loyalty programs, since competitors can easily implement a program that rewards clients with the mentioned services. To stand out in the market is important to go further. Here are some ideas to do so:


Giving your customers the opportunity of staying in touch with your brand on every touchpoint is the key to success. Today’s consumers never use a single touchpoint to complete a purchase, so providing them with an omnichannel shopping experience means meeting their call for a more digital and innovative kind of purchase process. A useful idea could be to implement some devices such as POS or other types of scanner in the stores. These would be able to scan customers’ barcodes while they are paying for a product, making them earn points for every purchase they make. Another idea could be the implementation of proximity marketing solutions. What about proximity marketing? It allows brands to send push notifications on customers’ mobile phones when they are near the shop. In this way, there is a direct connection between the physical store and the digital world, where the customer is invited to enter the shop and take a look at the latest offers and promotions.


In the retail industry in-store promotions are one of the best ways to establish direct contact with customers. Why? Because customers who buy products from the retail industry are more willing to do so when they have the chance to test or try them in person. In-store promotions, for example, could mean organizing a sample distribution to make customers know a product better. What role does loyalty play here? You could ask people to try a product and, if they like it, offer them to buy it to receive a reward that could be: a discount on a different product, a buy 1 get 2 kind of offer, the awarding of loyalty points to use in the shop to get a discount on future purchases and so on.


Offering customers something specially designed for them is the number one strategy to gain their trust, satisfaction and obviously, over time, loyalty. Applying this philosophy to a loyalty program means offering your clients the right awards according to their preferences and needs. You could also provide useful purchase recommendations based on loyalty program customers’ previous purchases, offering them a unique and tailored shopping experience.


The retail industry is the most appropriate one to use social media and leverage them for loyalty programs. In fact, lately customers use social media a lot to directly purchase some specific products such as accessories, clothing or housewares. Hence, the so-called social retail is a trend the retail industry should absolutely take advantage of. They could use rewards and benefits for customers who decide to buy on brands’ social media profiles, making the shopping experience more virtual, omnichannel, easy and fast.

Chap 8.
Customer Engagement is always a good idea! Find out how to integrate it with loyalty programs

Loyalty programs don’t need to stand alone. They can actually be implemented with engagement solutions that add an interesting dash of game to the entire shopping experience.
Games, challenges and awards always convince customers to take part in brand activities. They love a brand capable of involving them with innovative and funny solutions and are more willing to buy from them.
Let’s discover together some engagement and gamification formats that the retail industry can adopt to boost sales and improve customer loyalty:


You can use photo contests to collect interesting and useful data about your customers, reaching the important goal of lead generation. Why should the customer be interested in participating in a photo contest? Because they love to see how brands focus on their clients making them the real stars. You can make customers participate in the contest for free, just leaving some personal data, or ask them to spend loyalty points. Usually, the customers are asked to pose with the purchased product. This improves brand awareness and makes your clients feel really close to the brand. Furthermore, we are talking about an activity that encourages customers to submit user-generated content and thus drive word-of-mouth.

Be ready to leverage user-generated contents, try our Photo Contest module


Buy&Win requires customers to purchase a product, upload the receipt and, usually after entering personal data, discover if they won a prize or not. How to implement this format in a loyalty program? It’s really simple: you can reward your customers for purchasing one or more of your products with loyalty points or coupons to spend online or in store. This obviously will increase your sales and brand awareness: customers will be more willing to try and buy a product they have never tried before just to win a prize. In this way, they may try something they really like, something they will purchase again in the future. Obviously, it will increase customer loyalty too: rewards and the ability to offer your customers new products and an engaging shopping experience make them understand that you really care about them.

Want to boost your sales while rewarding your customers? Click here and find out how


Engagement solutions would not be the same without a touch of gamification. Customers really like challenges and games because they feel like they are killing two birds with a stone: obtaining information about a product or easily interacting with a brand in a funny way while trying to win a prize. There are actually different formats you can use to engage your customers and let them play, such as: Scratch & Win, Rush&Win, Spin Win. Their implementation will be as effective as the one with the already mentioned formats: let your customers play and have fun when interacting with you. They will remember their experience with your brand as a positive and engaging one and they will surely be more willing to choose you over the competition in the future.

Let your customers play! Click here and discover our Instant Games solutions

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