5 Tips for Structuring a Successful Customer Rewards Program

Customer retention is among the most important factors in running and growing a health and fitness business. While attracting new customers is always a top priority, keeping your existing clientele returning for more impacts your business in the long run. A rewards program can be a great tool to retain and attract customers––but you must structure the program well for it to be effective.  

By providing perks and rewards to members who hit milestones, sign up for certain membership tiers, participate in studio events, or purchase merchandise, you can show your customers how much you value their loyalty. Here's how to create a successful rewards program that aligns with your goals, engages customers, and helps grow your business.  

How to create a customer rewards program

When developing a rewards program, lay a strong foundation by focusing on a few key elements.  

• Clearly define your goals, such as increasing customer retention, boosting sales, or encouraging referrals. 
• Choose a program structure that aligns with these objectives, like a points system, tiered rewards, or a referral-based program. 
• Set a realistic budget that ensures the program is both attractive to customers and financially sustainable for your business. For example, you can't give too much away because the program will become too expensive, but you can't give too little, or your customers will lose interest.  

Customer rewards program ideas

Whether you want to motivate clients to visit more often, refer friends, or explore new services, these creative customer rewards program structures and ideas for health and wellness businesses are a great place to start. 

Point-based rewards

The tried and true point accumulation system works where activities like spending money or attending classes earn points, which are redeemed for prizes. This structure is easy for you to track and for customers to understand. It also incentivizes them to engage more deeply with your business.  

Example: A fitness studio can offer 1 point for every dollar spent, and customers can redeem 50 points for a free smoothie or class. 

Tiered rewards

In a tiered rewards program, customers unlock greater rewards as they reach higher tiers based on their activity or spending. This structure offers faster point accumulation, access to more exclusive perks, and encourages ongoing engagement and increased spending.  

Example: A spa that offers bronze customers 1 point per $ spent, silver customers 2 points per dollar spent, and gold customers 3 points per dollar spent. 

Referral-based rewards

Referral-based rewards create a mutually beneficial system where loyal customers are rewarded for bringing in new clients. This method is a cost-effective way to expand your customer base while engaging your current clientele. 

A successful referral is often worth hundreds of dollars to health and wellness businesses, so ensuring that the points given for a referral are appropriate (not too few) is important to keep clients interested in referring your business to their friends. As a good rule of thumb, reward your referrals enough so that they can redeem a high-value reward if they bring you a new customer. 

Example: A fitness studio might offer current customers 100 points or a free class for every successful referral. Additionally, referred customers might receive a free month of membership or a free trial class in return.  

Milestone-based rewards

In this program, customers are rewarded for reaching specific milestones, such as attending a certain number of classes or spending a designated amount. These points add up quickly with frequent attendance and customers love the perk of attending for free. This system is effective because it incentivizes attendance and encourages and rewards consistency. 

Example: A Pilates studio could offer a free month or merchandise for every 25 classes attended, or a spa might offer customers a free bikini wax for every six waxes. 

Partner-based rewards

A great way to provide customers with valuable rewards while keeping costs manageable is to partner with other nearby businesses that offer complementary services. Customers can earn rewards through your program, which they can then redeem at these partner locations, and vice versa. This strategy not only enhances the sense of community among local businesses but also helps expand the customer base for both your business and your partners. 

Example: A cycling studio can reward its members with a free smoothie at the neighboring juice bar when they achieve a milestone or earn a certain number of points. In return, the juice bar can offer customers a discounted introductory cycling class for every ten smoothies they purchase. 

Subscription or membership rewards

Members of a subscription or loyalty club receive ongoing benefits, such as discounts, free services, or exclusive offers, in exchange for a monthly or annual fee. 

Example: A med spa may offer members a discount on skincare products or services for signing up for its facial membership package. 

Tips for creating an effective customer rewards program

Now that you’re familiar with the types of customer rewards programs, here are some actionable tips to create a program that drives success. 

Calculate your earning velocity

The average earn velocity tells you how many points each customer earns per month across all activities you reward. For example, a yoga studio might factor in the average number of classes attended, retail purchases, workshops, and referrals. Let's say this totals 30 points per month. In this scenario, setting the cost of a free class at 1,000 points would be challenging because it would take the average customer almost 3 years to redeem a free class.  

In contrast, pricing a free class at only 50 points would be too low, allowing customers to earn a free class every other month. You'll need to find the right balance to ensure your customer rewards program is engaging and profitable.  

Make a reward attainable within three to six months

Your customers should earn at least one reward within 3- to 6 months. Otherwise, they will lose interest in your program, which won't be effective. Ideally, this reward would be small or inexpensive. For example, a health club may offer a smoothie or discount on retail. In the instance above, at least one reward would cost between 90 and 180 points. 

Bring in new customers with an intro offer

An intro offer is a great marketing tool to bring in new customers. You can set up an intro offer in the Mindbody app to encourage first-time visits. Additionally, you can link this offer directly to your customer rewards program. For example, you can give existing customers rewards points or incentives for sharing introductory offers with their family and friends. Furthermore, you might allow customers to redeem their existing reward points for discounted or free intro offers that they can share with others. 

Use your rewards to cross sell 

Entice customers to try different services or products at your business by cross-selling. If your business is a salon, use retail as the reward so more customers try your hair products. If you have a gym, consider offering personal training as a reward to encourage more customers to try it. Cross-selling encourages customers to try out offerings they may not have otherwise and adds variety to your rewards program. 

Implement a software for better rewards management

The right software can improve how you manage your rewards program. It can automate tasks such as tracking points and processing redemptions. Additionally, many platforms provide features like detailed analytics, which offer insights into customer behavior and program performance, allowing you to optimize your rewards strategy.   

For example, Mindbody's client rewards feature offers a built-in loyalty program that grants clients points for booking classes online, buying services and products, and referring new clients to your business. This feature saves you time and reduces administrative overhead. 

Create a rewarding relationship with your customers

There’s no one-size-fits-all perks program that will work for every health and fitness business and client base. As you design your benefits and perks structure, think about how you can best keep your members happy and wanting more. Remember, delivering a great service is important, but it's the way you make members feel that can make all the difference in your client retention and long-term success.