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How to Mitigate Your Loyalty Program Costs By Adding a Subscription

The cost of loyalty programs continues to rise.  

Full-service costs include rising platform fees (especially for hosting(, increased labor fees (as service providers struggle to retain top talent) and turbulent rewards availability (which means more expensive rewards). As a platform-only approach, Software as a Service (SaaS) is a less expensive option for brands, but many don’t have dedicated teams to manage it. 

High costs or not, consumers demand more and when it comes to loyalty programs, they want things like instant benefits and status. At a time when you want to differentiate your brand and loyalty program from your competitors, you need to offer your customers more value. 

Here’s how adding a subscription can help you mitigate the cost of your loyalty program. 

Consumers Demand More From Your Loyalty Program 

Subscription-based loyalty programs, like premium loyalty, require customers to pay a monthly or annual fee in exchange for exclusive benefits and instant rewards that make members more valuable to you. 

According to our 2022 Premium Loyalty Data Study, 78% of consumers don’t want to wait to accumulate points in loyalty programs and think loyalty programs should provide immediate benefits. 

This rising trend is impacting many brands and their respective customers. Consumers want value and they’re willing to pay for it. 

They’re drawn to subscription loyalty programs because they can save money, try new products and engage more with their favorite brands. Plus, subscription loyalty programs are convenient and fun for consumers. 

Our 2023 Loyalty Programs Data Study shows that 71% of consumers will recommend subscription products to friends and family if they are excited by them.  

To illustrate how the subscription model has permeated popular culture, according to our 2023 Paid Enrollment Data Study, a staggering 93% of consumers belong to at least one subscription and 68% of that group belongs to multiple subscriptions.  

More than half (54%) of consumers expressed their willingness to participate in a subscription-based paid enrollment program if the benefits were deemed valuable. 

And 70% of consumers are interested in discounts on purchases when it comes to paid enrollment offers. 

Offering a subscription-based loyalty program will differentiate your brand from your competitors, make your best customers significantly more valuable, give you a steady stream of recurring revenue and elevate customer engagement. 

Download the 2023 ebbo Paid Enrollment Data Study.

Download the 2023 Paid Enrollment and Subscription Loyalty Data Study.

How a Subscription-based Loyalty Program Can Pay For Itself 

Through a recurring revenue stream, a subscription-based loyalty program helps you fund your rewards, benefits and experiences.  

It can help you you segment data on your best customers and increase overall engagement. Plus, members are likely to choose your brand over competitors. Consider that 91% of premium loyalty members are likely to choose a brand over a competitor offering a lower price if they’re satisfied with the special benefits offered by the brand’s program. 

According to our 2022 Premium Loyalty Data Study, 71% of premium loyalty members shop with brands whose programs they participate in at least once a week. And 91% of premium loyalty members are likely to recommend a brand to friends or family when the brand offers a program with valuable benefits. 

Premium loyalty members are your best customers. Members are 60% more likely to spend more with that program while members of free loyalty programs are just 30% more likely to, according to a 2020 McKinsey Survey

Remember to start small. There is no need to launch a complex loyalty program. Start with a simple program and you can add features and benefits as you grow based on member feedback and behavior. This will help you cover the costs of the program and make sure that it is successful before you decide to enhance it down the road. 

Target the top 20% of your customers who might want a better experience and create an appealing value proposition. After funding your subscription-based loyalty program with member fees, use any excess money to cover the costs of a free program or for internal initiatives. 

Track the performance of your loyalty program so that you can make necessary adjustments. This will help you ensure that the program is meeting your goals and objectives. 

Similar to a premium tier, you can also increase member engagement through paid enrollment.  

In exchange for a fee, a paid enrollment is a limited-time, subscription-based loyalty amplifier that gives customers a unique experience and includes things like product discounts and chances to win or buy exclusive items through members-only or time-sensitive offers. 

Screenshot showing CVS tiered loyalty program structure

Examples of Subscription-based Loyalty Programs  

Here are a couple of examples where brands added subscription tiers to their loyalty programs. 

Earlier this year Best Buy launched three membership options in its loyalty program, My Best Buy Memberships™.   

Each membership tier has a different set of benefits, ranging from members-only pricing and deals, access to exclusive sales and events, 24/7 tech support, product protection and free shipping. The three memberships are: My Best Buy™, My Best Buy Plus™ and My Best Buy Total™. The first option is free for consumers to join while the other two carry annual membership prices.  

The two premium loyalty options cost $49.99 and $179.99 annually.  

Best Buy’s three loyalty programs show how you can offer the best of your brand to your customers. These three programs meet the needs and expectations of every type of customer Best Buy has and include excellent benefits for each membership level.  

Also, CVS launched its premium loyalty CarePass program in 2019.  

This program costs members $5 per month or $48 per year and allows consumers to receive elevated benefits like instant discounts, free shipping, and 24/7 access to a live pharmacist.  The CarePass experiential benefits complement the transactional benefits and elevate the program nicely.  

Give Your Customers The Type of Loyalty Program They Want 

Your best customers want a better experience and enhanced benefits and are willing to pay for it. 

A subscription-based loyalty program can provide your members with those things and give you a way to cover your costs, pay for those benefits and receive elevated customer data that you can use to tailor better experiences in the future. 

Subscription loyalty is a rising trend and both brands and consumers are excited to participate because they’ve seen positive results across the board from recurring revenue streams and increased engagement levels.

Learn more about the rise of subscription loyalty programs or check out The Ultimate Guide to Subscription Loyalty


ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.

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ebbo™ is an all-in-one loyalty company. With our data driven strategy, full-service approach, and the unwavering support of the people behind the platform, our dedicated team will work with you to understand your loyalty goals, innovate solutions and help you build customer engagement on repeat.

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