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Pandemic conditions have shaken customer loyalty worldwide. In contrast to this general state of customer loyalty, there has been an increase in value for companies that implement paid loyalty programs effectively.

Paid loyalty programs can be described as projects that change consumer behavior, create value, enhance the overall consumer experience, offer tailored, high-value rewards, and focus consumers around a common brand promise or offer, forming a part of an exclusive community.

While these programs may seem small in appearance today, they are rapidly expanding. Recently, major brands have been launching paid loyalty programs one after another to fund unique experiential benefits and provide a sense of privilege to their members. Companies are now opting for this loyalty model that has emerged as consumers become increasingly connected and experience-oriented.

Why do consumers pay for loyalty programs?

When implemented correctly, paid loyalty programs not only enhance the overall consumer experience but also transform consumers into a special community focused around a common brand promise or offer by providing high-value rewards.

In recent years, brands have been fighting harder than ever to retain their customers, which is increasing the cost of service. Brands that cannot hold their ground in this field quietly withdraw, while successful brands strengthen their offerings and develop the loyalty paradigm by financing more expensive benefits.

A 2020 McKinsey survey on loyalty programs reveals that members of paid loyalty programs are 60% more likely to spend on the brand after subscribing, compared to only a 30% increase in this likelihood for free loyalty programs. Additionally, paid loyalty programs yield higher engagement compared to free loyalty programs. As a result, paying members exhibit higher loyalty compared to non-paying members.