The Benefits of a Paid Loyalty Program

September 9, 2021 Written By Darshit Parmar

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The Benefits of a Paid Loyalty Program

Offering a paid loyalty program is always a good idea for businesses. However, many retailers have started thinking about to offering to their customers. Nowadays, it is unimaginable to rely on traditional loyalty models where benefits are accrued later after you complete transactions. Monthly membership fees are required to enjoy the benefits of the program immediately and throughout one’s lifetime.

A loyalty program is offered by Shoppers Stop under the First Citizen program. It provides tangible benefits despite operating through a loyalty program based around cards and tiers. Members of the store also receive exclusive offers from the store, such as sneak peeks at new products, out-of-store sales, and home delivery of alterations. You can earn points in its pan-India stores as well as online. Shoppers and retailers both benefit from this.

Because of this, it may be time to stop assuming that consumers are unwilling to pay for additional services. Generally speaking, customers are concerned about what type of service they will receive after pandemics.

According to Forbes, over 90% of companies offer some form of loyalty program. There is no doubt that these numbers are the reason why you should opt for a loyalty program, whether it is free or paid.

As we discuss in this article, paid loyalty programs are playing a large role in retaining customers and improving retailers’ value propositions.

What is Paid Loyalty Program?

Basically, a paid loyalty program is a premium loyalty program in which brands offer special offers or discounts in exchange for recurring monthly or annual fees. It could be free shipping and returns, access to new products, member discounts, or invitations to exclusive events.

The fact that retailers used to offer paid loyalty programs to their clients and benefit from them is no longer a secret. Millennials and Gen Z are less likely to trust and spend when it comes to loyalty programs. This is due to many factors such as their need for instant gratification, modern technology, and lack of trust.

How Paid Loyalty Programs Work?

Free loyalty programs are obviously opposite of paid loyalty programs. Free loyalty programs don’t require customers to pay anything to brands or stores. To access exclusive deals and discounts within a paid loyalty program, you need to pay a certain amount of money.

Paid loyalty programs are easy to understand and why you should choose your brand or online store. There is a reason why customers are attracted to loyalty programs paid by companies since it eliminates following instructions and T&C.

Customer loyalty programs can make customers feel special as they feel like they are part of the team and are part of something special. Customer experience is what ultimately determines the best product on the market.

Benefits of a Paid Loyalty Program

Now that you know what a paid loyalty program is and how it works, let’s look at benefits of a paid loyalty program. Let’s explore the benefits of paid loyalty programs so you can see why it can be a smart move for your online store.

  •  Deliver Exceptional Customer service

When you consider the value of customer experience, you will question whether customers will be willing to pay. Nowadays, where customers are so busy and demanding, they always look for something that doesn’t interfere with their routine and schedule.

As an online store, you have the option of offering paid loyalty programs to your customers. However, what you must remember is that your brand experience must be awe-inspiring and memorable, since customers notice bad experiences and deal based on that in the future.

The customer is ultimately concerned with the experience regardless of whether it is free or paid. Exceptional customer service is the key to a great customer experience.

  •  Enhance Customer Retention

When you lose your customers, it damages not only the bottom line of your business but also your reputation. Those customers who leave you are like your friends whom you have hurt and have been sad for some time. However, that doesn’t mean they will always be sad.

One way to bring them back into your life is by giving possible reasons and solutions for their departure. Since you are offering them something more than they asked for, it is possible with paid loyalty programs. Your goal is to restore their trust and convince them that they did not make any mistakes.

  •  Create Opportunities to Stand out

Thanks to technology and innovation, customers can now choose anything they want at any price they want. The truth is that many brands are offering their products at cheaper prices than that. It seems to be a strategy to lure customers.

You might be wondering how it’s an opportunity. Therefore, if you offer a paid loyalty program, you can impress your customers by giving them what they need and want. Because you are already offering discounts and deals to your customers, you need to think beyond them.

In contrast to the traditional free loyalty program, a paid loyalty program is not just about the deals, which would make it difficult for your customers to switch brands. With paid loyalty programs, you give something extra to your customers and that will motivate them to stay loyal to your brand.

  •  Gather Data on Customers Needs

The experience of a customer is dramatically impacted by loyalty programs. A loyalty credential is activated upon a purchase or browsing your website. Their wealth of demographic and consumer insights makes them an invaluable source of information on consumers, including:

  • Information pertaining to members (age, email address and phone number) Sales patterns and how members use them.
  • The products they are purchasing.
  • Their preferences in terms of email marketing.
  • How do members use their membership perks?

You can also use the information that you gather within your market research activities to inform product and marketing decisions across your organization. The feedback from your members can be used to help you make further improvements to the beta product before releasing it to the rest of your customers.

Is Paid Loyalty Program Right for your Brand?

An ecommerce brand’s success depends on customer retention. A high rate of customer churn makes it impossible to build steady revenue or grow your business.

Taking care of your loyal customers will allow you to learn what makes them happy and how to relate to them accordingly. Over time, this leads to greater profits. When it comes to running a paid membership program, you must put a great deal of effort into it.

  • Deliver exceptional service to VIP members for high ROI
  • Eliminate unprofitable customers
  • Revenue growth and increased sales
  • An increase in customer lifetime value
  • Compiles customer data
  • Adaptable and personalized


As a conclusion, customers must be rewarded experientially, offered custom offerings, and experience seamless shopping in order for loyalty programs to succeed. Take advantage of these strategies by implementing them into your current program.

Do you need help strategizing a paid loyalty program for your store? M-connect Media can assist you. We can help you get the most out of it if you consult with our eCommerce experts. For more information, please contact us.

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