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Loyalty Discount - Meaning, Importance & Example

Published by MBA Skool Team in Marketing and Strategy Terms Last Updated: August 14, 2023Read time:

What is Loyalty Discount?

Loyalty discounts also called patronage discounts are discounts offered to repeat customers to encourage larger purchases. Loyalty discounts give incentives on price or extra benefit or discounted rates for customers who are loyal to the brand.

Importance of Loyalty Discounts

Usually companies provide loyalty card, as a part of their loyalty program, also called reward card, point’s card or club membership card to customers to track repeat customers and to offer them special discounts etc in order to retain them. This helps build strong customer loyalty towards their product and service offering. For any company’s brand management and retention strategy, such loyalty discounts are integral in engaging customers & clients. These are also referred to as patronage rewards.

Also, companies might keep record of customers like in case of travel booking sites, online shopping sites etc and provide discounts for large purchases or on special occasion like festivals etc. Regular or frequent customers are retained by such loyalty discount options. It not only keeps them engaged but also increases brand awareness. Such loyalty programs in the long run helps to build strong brand loyalty amongst the customers. The below image is an illustration of a retail store Shoppers Stop loyalty card offering discount on purchases.

Loyalty Discount Example

Apparel retail chain Shoppers Stop has its loyalty program called First Citizen, which offer loyalty discounts on purchases made. Other retailers like Walmart, Reliance and More also have their loyalty discount programs. Similarly, airlines, hotel chains, ecommerce websites etc have loyalty cards and discounts for frequent customers etc.

Hence, this concludes the definition of Loyalty Discount along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.

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