We all know that customer loyalty is important for any business. However, to ensure that customers remain loyal, initiatives need to be done to ensure that they are engaged, happy, and willing to continuously show their support. This is where customer loyalty programs come into the picture.

Although many brands today may already have a loyalty program in place, the question is: are they the standard, run-of-the-mill loyalty program or is there something that entices customers to keep coming back?

Our experience working closely with top F&B and retail brands in Singapore has proven that there is a need for brands to differentiate their loyalty programs from everyone else in the market, as most businesses have existing loyalty programs. So what’s the secret sauce to make your loyalty program unique and different?

With the changing market and user trends today, what is really upcoming & working for most businesses are paid loyalty programs.

Paid (or premium) loyalty programs offer elevated benefits and high-touch experiences to customers in return for a nominal membership fee that is paid upfront. 

We’re sure you have many questions like how these programs work, how they differentiate from free memberships, why most businesses gravitate towards paid loyalty programs, how can you get benefited from them, etc. 

To get the answers to all of these questions, let’s dive straight in.

What are Paid Loyalty Programs?

At first glance, paid loyalty programs look similar to traditional loyalty programs, except for one difference: the upfront membership payment. However, there is more than meets the eye as paid programs carry much more value for customers than free membership programs.

Paid loyalty programs tend to deliver bespoke, high-value rewards, and elevated customer experience compared to their free-entry counterparts.

Some well-known examples of paid membership programs are Amazon Prime, Sephora’s Beauty Insider, etc. In Singapore itself, many brands like Dian Xiao Er, Awfully Chocolate, Wok Master, etc. have adopted paid loyalty programs and have achieved amazing success in terms of revenue generation, customer retention, and cashflow

The logic behind Paid Loyalty Programs: Why do customers pay WILLINGLY?

If the concept of Paid Loyalty Programs is new to you, we bet you are thinking, “why would customers want to pay to join a loyalty program?”

The truth is, that buying behavior has changed. are changing. Today’s customers yearn for exclusivity. Customers willingly pay for the membership if it makes them feel special, and provides unique rewards, while still giving more value to them. If your customers feel that they have access to benefits that not everyone is entitled to, this will make your program more desirable and attractive, resulting in increased loyalty, higher retention rates, and higher customer lifetime value.

On the other hand, customers who did not subscribe to the paid loyalty program also have a feeling of FOMO (fear of missing out). They wouldn’t want to miss out on the benefits that everyone else is getting, so they’re likely to sign up for the loyalty program as well.

Hence we see that there is a ripple effect. On one hand, they want to feel special like they are a part of an exclusive club. On the other hand, they also do not want to miss out on high-value benefits which will drive them to sign up for the paid loyalty program. 

Typically, the customers who are willing to pay for your paid loyalty program are the ones who feel emotionally connected to your brand. They already have a positive experience with your products and services, and by signing up, it signifies that they want to have a long-term relationship with you. 

These customers are the ones that are the ones that you should treat as VIPs because they paid to be in the “inner circle”. When these individuals receive the appreciation and gratification they seek, they will keep coming back.

According to research done by McKinsey, 62% of consumers spend more money on a brand after signing up for a paid loyalty program. This statistic is proof that paid memberships are a sustainable and highly successful customer retention strategy. Why is this so? Simple. When a customer pays for a paid membership, they would want to fully utilize the benefits offered. As such, they will make sure to keep returning so that they can get maximum value off every dollar spent.

How to create an irresistible paid loyalty program for your brand?

As mentioned above, the customers who pay for your loyalty program also expect a great experience in return. They would also expect to receive more perks than your average customer. Just picture this: If you offer the same benefits for all customers, regular or new, then why would anyone want to sign up for a paid membership?

 Here are some important points to keep in mind while designing your paid loyalty program:

  1. It should be easy to understand.
  2. The enrollment process should be quick and seamless.
  3. There should be some kind of immediate reward upon signing up (e.g. free drink, an SGD20 voucher, an extra 10% enrolment discount, etc.). Instant gratification is a must-have for paid loyalty programs.
  4. It should offer “exclusive” benefits that are significantly better than your free loyalty program.
  5. The paid membership program must provide a personalized experience to the members.
  6. It should be simple to earn and redeem rewards.
  7. There should be a way for members to easily track their rewards.

To date, Advocado has deployed paid loyalty programs for more than 400 brands across the F&B, lifestyle, health & wellness, and retail space. We are known as the No.1 Cloud Loyalty CRM for a reason, as we empower all business owners to not only increase, but maintain a steady flow of revenue by implementing the best loyalty solutions catered to each brand.

Free or Paid: Which loyalty program should you offer your customers?

Don’t get us wrong; we are not saying that free memberships or loyalty programs no longer work and that you should scrap them entirely. We are advocating that a paid loyalty program should be in place for you to keep your most loyal customers happy and constantly rewarded. 

Every customer segment has varying buying behavior and connects differently with your brand. There will still be customers who decide to try out other brands despite being regulars, while there are also some who would stick to only one brand for their entire lifetime! Therefore, having a loyalty strategy that caters to both spectrums of audiences is the key. Remember, a paid loyalty program is not a replacement, but a supplement to your free membership program.


We all know that customer loyalty is the currency that keeps the business running today. Paid loyalty programs have proven to become a sustainable and successful customer loyalty tool. Want to implement a paid loyalty program for your brand? Wait no longer; speak to our Loyalty Experts today and be prepared to be amazed.


For any further information, have a chat with our experts to see if Advocado suits your business.
You'll be amazed!

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