Blog post

Analysis: Paid Loyalty vs. Earned Loyalty

There’s been a lot of talk on the internet recently about paid loyalty and how it’s everything earned loyalty ever wanted to be. Respectfully, we have to disagree. Just like Pizza Hut and Papa Johns, there is enough room in our stomachs for both. All pizza is good pizza. All loyalty is good loyalty. The important part is figuring out which is best for you based on your business. And the answer, more likely that not, is probably both! Each one serves a different customer segment. And you, smart marketer/business-owner, know you should be serving everyone! Let’s get into it.

Elise DeCamp
August 17, 2022

Paid Loyalty

We’ll start with the newbie. Paid loyalty is a platform your customers pay for in order to get discounted rates on your products, or access to things from your brand they might not otherwise have access to. The prime example (pun intended) is Amazon Prime. This type of program makes sense if you are a high SKU count website or if you are a brand with reason for significant repeat purchase rates. Converting your customers to a paid loyalty program can be challenging! You have to make the rewards commiserate with the discounts provided. As a brand, this can be appealing because you are getting sure monthly subscription revenue (a rarity in your line of work) however there are circumstances where offering these discounts for the membership doesn’t net in your favor. You have to track your ROI carefully or ensure not to set your discounts too low. It might be more beneficial to build a membership program that gives gifts or experiences rather than discounts. Better yet, it might make the most sense to introduce this type of program exclusively to your top tier of LTV customers.

Reward tiers brands can set up on the Toki loyalty platform for their customers
Through Toki, you can set up Reward Tiers that customers unlock once they have reached a certain volume of tokens, including the option to attach an NFT for those top tier shoppers.

Earned Loyalty

If you are on this page, you are probably familiar with earned loyalty. Loyalty points (or tokens, in 2022) can be earned through activities you take with a brand online and offsite such as making a purchase, following a brand on social, or telling a friend about the brand. The beautiful part of earned loyalty is that it can apply to any type of brand big or small, from any category. But historically, platforms in this sector have not been wildly successful. As a brand, you probably have one, but it feels more like you’re just checking a box, right? Your activation rates are likely pretty dismal.  It’s okay - it’s not your fault. The problem lies in the activities (not engaging enough), the rewards (not commiserate in value to the actions being taken) and, lastly, the fraught login and tracking process. Loyalty should be fun, easy and shocker rewarding!

Micro-activities on the Toki rewards platform
Toki focuses on the micro-activities consumers are already taking, both pre- and post-purchase, to encourage genuine loyalty and to delight the customer ever step of the way.

With Toki, you can set up either program. We are here to be flexible and deliver you the experience you need to grow by activating your customers where they are and where you want them to be, whether they are passive or active, and whether your community is big or small. Reach out to to learn more!

Subscribe to our newsletter
and stay up to date

Interested in keeping up with us as we publish more thoughts on the space? Sign up for our newsletter for notifications on new content.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

The future of e-commerce

Incentive infrastructure layer for brands and communities.

Book a demo
© 2022 Toki Commerce, Inc. All rights reserved.
Follow us on twitter & linkedin