Let’s be honest, “loyalty” gets thrown around a lot in marketing circles. Points here, discounts there, punch cards, exclusive perks… it sounds great in theory. But like all good marketing, a loyalty programme only works when there’s a plan behind it.
Just look at Tesco. Over 22 million households in the UK hold a Tesco Clubcard (Statista), drawn in by the promise of personalised savings and offers. On average, a Clubcard user saves £351 a year just by accessing Clubcard Prices. That’s loyalty done right but it’s built on understanding the customer, personalising the experience, and delivering real value.
Done well, loyalty programmes can strengthen customer relationships, drive repeat business and support your long-term growth. Done for the wrong reasons? They end up costing more than they’re worth and distracting you from the bigger picture.
So, is a loyalty programme right for your business? Let’s dig into when it works, when it doesn’t, and what you should think about before launching one.
What is a loyalty programme (and what it isn’t)
At its core, a loyalty programme rewards customers for coming back. But it’s not just about chucking out discount codes or giving freebies every 10th visit. A real loyalty strategy is about building trust, consistency and value over time.
True loyalty means your customers:
- Choose you even when cheaper options exist
- Recommend you to others
- Stick around because they want to, not because there’s a discount dangling
Take O2 Priority as an example. O2 doesn’t just reward customers with mobile discounts it offers loyalty benefits outside its own sector. From free Greggs treats to discounted concert tickets, it taps into lifestyle perks that genuinely matter to customers. That’s what keeps users sticking with O2 as their SIM provider, even when cheaper networks are available.
If you’re thinking of launching a programme, it should be an extension of your overall marketing, not a sticking plaster for slow sales.
When loyalty programmes can work
Loyalty schemes aren’t a magic fix, but they can be incredibly effective in the right setting:
✅ You’ve got regular, repeat customers
Whether you run a salon, sell online products, or offer a subscription-style service, if your customers come back naturally, a loyalty programme can encourage more of the same.
✅ Your customer experience is already solid
If people already enjoy buying from you or working with you, a loyalty programme enhances that. It’s a reward for a relationship that already exists, not a substitute for one.
✅ You have clear goals
You’re not just handing out points for the sake of it. You’ve got a strategy behind what you want customers to do: refer a friend, leave a review, visit more often and the rewards support that.
A great example of this is Greene King’s Score King game. Instead of simply offering discounts, they created a fun football score prediction game on their loyalty app. Customers who guess correctly can win free or discounted drinks, but only at their favourite Greene King pub. It’s a clever, strategic move: they understood their customers’ behaviour, built an engaging experience around it, and linked rewards directly to visits.
When they probably won’t work
Just because loyalty programmes are popular, doesn’t mean they’re right for every business:
🚫 You don’t really know your customer journey
If you’re still figuring out how people find you, buy from you or come back — you’re not ready. Get the basics working first before adding bells and whistles.
🚫 You’re trying to “buy” loyalty
Offering 10% off to get someone to stay isn’t loyalty. It’s a transaction. True loyalty is emotional built through trust, consistency and experience. Discounts can support loyalty, but they shouldn’t be your whole strategy.
🚫 You haven’t got the time to manage it
If you’re a small business with limited resources, a loyalty programme might just add more admin to your plate. Unless it’s automated or simple to run, it could end up being more hassle than it’s worth.
Things to consider before launching one
Before you go all-in, ask yourself:
- What behaviour do I want to encourage?
Repeat purchases? Referrals? Engagement? Make sure your programme aligns with real, strategic goals — not just activity for activity’s sake. - Can I track it properly?
Whether it’s digital stamps, email integration or points through an app, make sure the tech doesn’t become a headache. - What’s the cost vs. return?
Will rewarding loyalty eat into your margins? Or drive growth? Be honest about what you can afford and what success looks like. - Does it match my brand?
A slick app-based programme might work for one business. For another, a handwritten thank-you note with a small gift might go further. Know your audience and what they’ll appreciate.
Tesco’s approach to Clubcard offers a brilliant reminder here — not only are discounts provided, but the prices customers see are personalised based on their previous shopping habits. That level of personalisation shows real understanding, and it’s what makes the loyalty offer stick.
What to do instead (or alongside)
If a loyalty programme isn’t the right move yet, focus on what builds loyalty the long-term way:
- Deliver great customer experiences
Be consistent, be responsive, and make every interaction count. - Stay front of mind
Email marketing, helpful content, social media — all of these help build the relationship over time. - Create a community
People stay loyal to brands that feel like a good fit — and that often comes down to shared values, not just vouchers.
Final thoughts
Loyalty can’t be bought — it’s earned.
A loyalty programme can absolutely support your strategy, but it needs to be the cherry on top of a business that already delivers a brilliant experience.
