How brands can use loyalty programmes during the festive season

A loyalty programme is a customer retention strategy in which customers earn points for purchasing goods and services, which can later be redeemed for rewards like discounts and freebies. These programmes have long been recognised as an effective way to promote business growth and build lasting customer relationships, proving successful across various industries.

Why do loyalty programmes work?

Though loyalty programmes may seem costly, they are a cost-effective strategy. Retaining existing customers requires far fewer resources than acquiring new ones. By offering rewards, brands make customers feel valued and appreciated, demonstrating that the relationship extends beyond profit. This fosters a sense of belonging and creates strong emotional bonds between businesses and consumers, leading to increased retention and repeat purchases. When done right, loyalty programs not only boost customer loyalty but also turn satisfied customers into brand advocates.

The festive opportunity

The festive season brings a spike in shopping as people buy gifts, host gatherings, and celebrate holidays, often making it a financially demanding period. Many shoppers look to loyalty programs for rewards that can help ease the burden on their wallets. This presents an excellent opportunity for brands to enhance the customer experience by aligning their loyalty benefits with the season.

During the festive season, consumer spending typically increases across various gifting categories, including fashion, luxury items, home decor, food and beverages, and digital products. This widespread spending behaviour opens up opportunities for cross-loyalty and group loyalty arrangements with various gifting brands. Such partnerships can maximise benefits for customers by allowing them to earn more reward points and providing a more curated selection of brands to shop with.

Ways brands can leverage loyalty programmes during the festive season

Free shipping: During the holiday season, free shipping is a practical and appealing benefit. Removing shipping costs helps customers save during an already expensive time and can entice new members to join loyalty programs or keep existing ones engaged.

Exclusive experiences: Today’s customers increasingly value experiences over material goods. Offering unique, memorable experiences adds excitement to loyalty programs and strengthens emotional connections with the brand. Exclusive festive-themed experiences, such as customised packages or limited-time deals, can amplify the feeling of being valued and create long-lasting positive impressions.

Mystery gifts and rewards: Surprise rewards generate anticipation and engagement. Holiday-themed promotions, such as advent calendars, daily giveaways, or prize draws, can enhance customers' festive shopping experience and build excitement around the brand.

Non-transactional activities: Reward customers for participating in non-purchase activities, such as attending brand events or engaging in relevant industry activities. This creative approach differentiates brands from competitors and fosters a sense of community among customers, making loyalty programs more engaging and enjoyable.

Lifestyle incentives: Many modern consumers seek to support brands that align with their values. Offering incentives tied to causes or lifestyles can strengthen customer loyalty by showing that the brand cares about more than just sales. For instance, sustainability or charitable campaigns can resonate deeply with customers and strengthen their connection to the brand.

Purposeful and surprise gifting: Festivals often hold special significance for customers, and brands can create a lasting impact by incorporating thoughtful gifting into their loyalty programs. For example, BluSmart, a ride-hailing service, gave small boxes of sweets (mithai) to all riders on Raksha Bandhan. While this represented a cost for the brand, it made customers feel special, creating a memorable and positive association with it.

Standing out during the festive season

With increased spending during the festive period, consumers are more willing to invest in brands that offer meaningful rewards and memorable experiences. This provides businesses with the perfect opportunity to stand out from the competition, strengthen brand loyalty, and leave a lasting positive impression.

By aligning loyalty programmes with the festive spirit, brands can:

1. Create emotional connections with customers
2. Encourage higher spending and engagement
3. Differentiate themselves in a crowded market
4. Turn satisfied customers into brand advocates
5. Build a community around their brand

The festive season presents a unique opportunity for brands to creatively leverage their loyalty programmes. By offering exclusive experiences, surprise gifts, cross-brand partnerships, and purposeful gestures, companies can create memorable moments that resonate with customers long after the festivities end. These strategies not only drive short-term sales but also foster long-term loyalty, turning seasonal shoppers into year-round brand enthusiasts.