Loyalty Programmes vs Subscription Models: What’s Best for Your Online Business?
Which Model Wins Customers and Boosts Your Bottom Line?
In the world of eCommerce, customer retention is just as crucial as attracting new buyers. But with so many strategies to encourage repeat purchases, how do you decide what’s right for your business? Two of the most popular models are loyalty programmes and subscription services. Each has its perks, but choosing the right one can make all the difference in driving long-term success. Let’s break it down so you can make the best decision for your online business.
The Key to Retention: What’s Your Goal?
Before diving into the specifics, ask yourself: What do you want to achieve? Do you want to reward loyal customers for repeat purchases, or do you prefer a steady, predictable revenue stream? Loyalty programmes and subscription models both help retain customers, but they do so in very different ways.
Loyalty Programmes: Encouraging Repeat Business
Loyalty programmes reward customers for shopping with you. They can take many forms, from simple point-based systems to tiered rewards that encourage bigger spending.
Why Choose a Loyalty Programme?
- Increases customer lifetime value – Shoppers are more likely to return when they know they’re earning rewards.
- Boosts engagement – Customers enjoy working towards perks, making your brand more memorable.
- Flexible and low commitment – Unlike subscriptions, customers can shop at their own pace without feeling locked in.
Popular Examples:
- Airpoints and Flybuys offer points per dollar spent, which can be redeemed for travel or products.
- Starbucks Rewards gives free drinks and exclusive perks based on purchases.
- Sephora’s Beauty Insider lets customers accumulate points for discounts and early access to products.
Subscription Models: Predictable Revenue & Customer Commitment
Subscription models offer customers recurring products or services for a set fee. This strategy ensures predictable income and builds a sense of exclusivity.
Why Choose a Subscription Model?
- Steady and reliable revenue – With recurring payments, cash flow becomes more predictable.
- Stronger brand loyalty – Subscribers often stay engaged longer, especially when they feel they’re getting a great deal.
- Great for consumable or experience-based products – Perfect for businesses selling beauty products, meal kits, or digital content.
Popular Examples:
- Netflix and Spotify keep customers subscribed with ever-expanding content.
- Dollar Shave Club delivers razors monthly, eliminating the hassle of reordering.
- Kiwi brands like My Food Bag offer weekly meal kits tailored to customers' preferences.
So, Which One Is Best for Your Business?
Both models offer fantastic benefits, but the right choice depends on your products and customer behaviour. Here’s a quick guide:
- If your customers shop occasionally but spend more per order, a loyalty programme encourages repeat visits without commitment.
- If your product is used regularly and customers need a consistent supply, a subscription model ensures they never look elsewhere.
- Hybrid approach? Some brands successfully combine both, offering exclusive discounts or extra perks to subscribers while maintaining a points-based reward system.
Ready to Optimise Your eCommerce Strategy?
Choosing between a loyalty programme and a subscription model doesn’t have to be complicated. At Creative Web Designs, we help businesses craft tailored eCommerce strategies that drive sales and keep customers coming back. Whether you’re launching a new website or optimising your existing one, our expert team is here to help.
Need guidance? Let’s chat! Contact us today.