Amidst increasingly strong competition, both in Thailand and worldwide, building long-term customer relationships has become a key factor for the sustainable growth of any business. A popular and highly effective strategy in this regard is the loyalty program, which is used across a diverse range of businesses, including restaurants, coffee shops, ecommerce platforms, travel and delivery apps, and airlines.

This article explores what loyalty and rewards programs are in Thailand, why they’re popular, and what key factors contribute to their success. We’ll also cover strategies for designing a loyalty program to meet the needs of Thai customers, along with systematic methods for measuring results. In addition, we’ll introduce solutions that streamline and simplify loyalty program management, featuring real-time data recording and automatic points accumulation for every customer transaction.

What’s in this article?

• What are loyalty and rewards programs?
  
• Getting to know loyalty programs in Thailand
  
• Why are loyalty programs popular in the Thai market?
  
• How to design a loyalty program
  
• How to measure the success of a loyalty program
  
• How Stripe can help
  

What are loyalty and rewards programs?

A loyalty program is a marketing strategy that businesses use to cultivate customer relationships and build brand loyalty. This is achieved by setting up a system that allows customers to accumulate points based on their behavior. In return for making repeat purchases or meeting spending targets, they receive discounts, rewards, or special privileges.

Loyalty programs have multiple objectives: increase brand awareness, motivate customer loyalty, encourage repeat purchases, maintain the existing customer base (customer retention), and enhance customer lifetime value (CLV)—all of which are important factors for business in the digital marketing era.

Getting to know loyalty programs in Thailand

Loyalty programs originated from traditional stamp cards, such as those used by coffee shops or barbershops, where customers would collect 10 stamps on a paper card to redeem a free beverage or complimentary haircut. Membership card systems in the form of plastic cards began to appear later, such as those seen at movie theaters or gas stations. Loyalty programs became more prominent in the airline and hotel industries, which aimed to build long-term relationships with customers by offering points for service usage that could be redeemed for various benefits. A notable example is Thai Airways’ Royal Orchid Plus program, which officially launched in 1993.

Later, as digital technology began to play an increasingly significant role, loyalty programs in Thailand also evolved, expanding into other sectors, such as retail, restaurants, coffee shops, department stores, and credit card services. Eventually, the widespread use of smartphones enabled customers to conveniently track points, receive benefits, and redeem rewards with greater convenience via apps and online platforms. Additionally, data began being used to analyze customer behavior and offer promotions that are aligned with individual needs—a practice known as personalization.

How many types of loyalty programs are there?

In general, loyalty programs in Thailand can be divided into five main types, each with its own strengths and suitability for specific businesses. Choosing the right type of program for a business can help increase customer loyalty and create a competitive advantage, as outlined below:

Points-based program

Customers can earn points through the purchase of goods or services and subsequently redeem those points for rewards or discounts. This is the most common type of loyalty program found in Thailand. Examples include Rabbit Rewards, where users earn points by traveling on the BTS (Bangkok Mass Transit System) or purchasing products from participating merchants to redeem for free trips or store discounts; Sephora, which allows customers to earn points to redeem for products or free gifts through its Beauty Insider program; and Starbucks Rewards, where members collect Stars to redeem for free drinks or merchandise.

Tiered membership program

A tiered program has membership tiers where the more you spend, the more privileges you receive. This mechanism encourages customers to increase their spending in order to advance to higher tiers, thereby fostering a sense of exclusivity. Membership tiers—such as Silver, Gold, Platinum, and Diamond—are typically assigned based on total spending volume or purchase frequency. Higher-tier members receive more benefits, such as exclusive discounts, free shipping, or complimentary gifts. Examples of tiered membership programs include AirAsia Rewards, GrabCoins, and Shopee Rewards.

Cash-back or reward-based program

Customers receive cash back or discounts based on their spending, with clear and immediate returns. This model is popular for credit card services and on ecommerce platforms. In addition to cash back, these programs might offer exclusive privileges, such as early access, member-only promotions, complimentary gifts, or supplementary services. Examples of cash-back or reward-based programs include 7-Eleven’s ALL Member loyalty points system and Lazada, which provides rebates good for use toward future purchases.

Paid membership program

Customers pay for a membership to receive additional privileges, such as free shipping, exclusive discounts, or member-only services. This model is best suited for regular customers, generating predictable revenue, as members are incentivized to use the service more frequently to maximize the value of their membership. Examples include coworking space memberships, GrabUnlimited for food discounts and free delivery, or YouTube Premium for ad-free viewing and exclusive features.

Coalition program

A coalition program is a points accumulation system for partner organizations or brands that participate in the same loyalty program. Customers can accumulate and use points faster with any brand in the network, enhancing convenience and value for customers through an expanded ecosystem. Notable examples include: Star Alliance, the world’s largest airline alliance network, which includes members such as ANA, EVA Air, Lufthansa, Singapore Airlines, Thai Airways, and United Airlines; and The 1 loyalty membership program, which can be used across businesses in the Central Group, such as Central department store, Robinson, Tops, Power Buy, and B2S.

Why are loyalty programs popular in the Thai market?

Loyalty programs are popular in the Thai market because customers value cost-effectiveness and enjoy promotions, whether these take the form of discounts, points accumulation systems, short-term promotions such as flash sales or double-digit days (e.g., 9.9 or 11.11), or member-exclusive privileges. These initiatives offer customers a sense of added benefit for their everyday spending. In addition, the growth of digital platforms and apps has made using loyalty programs even more convenient, simplifying tasks such as earning points, checking special privileges, and redeeming discounts or rewards.

At the same time, increasing business competition has led brands to use loyalty programs to retain existing customers, encourage repeat purchases, and help strengthen brand loyalty. In addition, loyalty programs are an important tool for recording and analyzing customer data to obtain customer insights for developing marketing strategies and enhancing a competitive advantage.

Examples of successful loyalty programs in the Thai market

• 7-Eleven’s ALL Member: This membership system is designed for earning points and redeeming exclusive privileges. Accessible via the 7-Eleven app or a registered phone number, the program connects with more than 10 million customers. Through the program, every purchase earns points, which can then be used as cash, redeemed for products, or exchanged for discounts. It also comes with exclusive privileges and premium rewards reserved exclusively for members.

• Singha Rewards: Use the QR Code under the cap of Singha drinking water to collect points through the Singha LINE official account, which easily reaches the general public, requires no physical card, and allows points to be exchanged instantly for rewards or to enter lucky draws through the “Drink more, earn more points” campaign. This initiative has achieved high levels of engagement because it’s hosted on a familiar and widely used chat platform in Thailand.

• Shopee Coins: With this program, when you purchase products from participating stores, you receive one coin for every ฿1 of qualifying product value. Additional coins can be earned by checking in daily, participating in in-app activities or games, and writing product reviews. One Shopee coin is equivalent to ฿1; however, coins do expire if not used within the specified timeframe.

• Starbucks: This highly successful loyalty program operates through an in-app membership system that allows customers to earn one Star for every ฿25 spent. The program features two primary membership tiers: Green and Gold. Customers can use stars to redeem rewards such as free drinks or food, free drink size upgrades, or special privileges such as discounts or birthday gifts. This system encourages customers to make repeat purchases.

• The 1: The largest loyalty program in the Thai market, The 1 is capable of accessing and analyzing data from more than 22 million members across the Central Group’s diverse portfolio of businesses, including department stores, hotels, and supermarkets. This allows affiliated brands to communicate with precision and deliver in-app promotions that are highly relevant and resonate deeply with their members.

How to design a loyalty program

Designing a loyalty program to meet the needs of Thai customers can be carried out according to the following guidelines:

Set goals

From the outset, loyalty programs should have clearly defined target groups and goals—for instance, increasing average transaction value, boosting purchase frequency, retaining existing customers, or building a customer database. In addition, the target groups should be clearly segmented—potentially based on behavioral patterns or customer value (e.g., new customers, regular patrons, or VIPs)—in order to offer special privileges that align with the marketing strategy and meet the needs of each customer group.

Design and select loyalty program solutions

Design a user experience that’s convenient and accessible by defining the points accumulation system, terms of use, validity periods, and membership tiers (if any) in accordance with the established goals. Streamline the process so customers can accumulate and redeem points quickly and easily. You can design or select a loyalty program solution such as the Stripe Loyalty and Rewards app, which offers key features including:

• Automatic point accumulation: Customers instantly earn reward points upon successful payment, subject to specified conditions.

• Granting of bonus points: Add an option to award bonus points when customers purchase eligible products.

• Support for diverse rewards: Customers enjoy the flexibility to redeem points for a wide range of rewards designed by the business—whether in the form of discounts, free gifts, or exclusive services. Businesses can easily customize and update the reward catalog for their loyalty program.

• Membership tier system: The system allows for the segmentation of customers into distinct tiers—such as Silver, Gold, and Platinum—based on specific criteria (e.g., cumulative spending or purchase frequency), granting each tier access to unique perks and special services.

Integrate the loyalty program with other systems

A loyalty program should be able to seamlessly integrate with other key business systems—via application programming interfaces (APIs), plugins, or add-on apps—allowing data to be recorded and updated in real time. This ensures data consistency across all platforms. Systems that should be integrated include:

• Payment system: Choose a comprehensive solution like Stripe Payments to seamlessly integrate your payment system with your loyalty program. This allows customers across all segments to pay conveniently using a wide variety of channels—such as digital wallets, PromptPay, or mobile banking—while also using loyalty points or redeeming rewards during the payment process.

• Enterprise resource planning (ERP) system: An ERP system is a central data hub that links warehousing, sales, production, and accounting in real time, allowing for inventory management and data updates immediately when transactions occur. This helps ensure accurate stock levels and mitigates shortages, especially during promotional campaign periods.

• Customer relationship management (CRM) system: A CRM system helps align promotions or special privileges in loyalty programs with individual customer behavior based on purchase history and interactions with the brand.

• Data analysis system: A data analysis system helps track, measure, and evaluate the effectiveness of campaigns with greater precision. Data should be analyzed to identify which privileges or rewards customers are most interested in redeeming points for, in order to design offers that better meet customer needs.

Communicate information clearly

Communicate the terms and conditions of the loyalty program in a simple, comprehensive, transparent, and clear manner. Additionally, employees should be trained to thoroughly understand the program, and frontline staff should play a key role in regularly introducing and inviting customers to participate. This effort should be combined with communication across all brand channels—including social media, advertisements, emails, and LINE official accounts—to update customers on promotions, benefits, and current point balances.

Monitor and analyze programs

Monitor and analyze customer behavior to evaluate the effectiveness of the loyalty program, identifying which campaigns are successful, which customer groups have high engagement, and which time periods generate the strongest sales, among other metrics. Use this data to improve the rewards and privileges structure, making it more attractive and better aligned with customer behavior. The program should be continuously tested and developed to ensure sustained, long-term effectiveness.

How to measure the success of a loyalty program

To measure results, assess the success of a loyalty program, and determine whether the program is worthwhile, consider the following key performance indicators (KPIs):

Customer retention rate

This metric serves as an indicator of customer satisfaction and brand loyalty. Retaining existing customers not only helps reduce marketing costs but also reflects the quality of a company's products and services. The cost of retaining existing customers is lower than that of acquiring new ones; also, existing customers are more likely to make repeat purchases and provide referrals. Therefore, if the existing customer retention rate increases, it indicates the implemented programs are effective.

Average order value (AOV)

If the average order value of each customer increases, it indicates that the program is successful. Effective loyalty programs often encourage cross-selling or upselling.

Repeat purchase rate

The repeat purchase rate measures the frequency with which customers return to make subsequent purchases. It serves as a key indicator reflecting the level of customer satisfaction, trust, and the perceived value derived from a company's products and services. It is calculated using the following formula:

(Number of repeat customers ÷ Number of first-time customers) x 100 = Repeat purchase rate

If the repeat purchase rate is high, it indicates that customers have a positive experience and are likely to be loyal to the brand in the long term, which shows that the loyalty program effectively encourages repeat purchases.

Redemption rate

The redemption rate—specifically for points, rewards, or discounts—serves as a key performance indicator for a campaign, measuring the extent to which customers use their accumulated points or benefits. If the redemption rate is too high, the value should be reviewed to allow for appropriate strategic adjustments. However, if the rate is too low, it suggests that the rewards or promotions might not be attractive enough or might be difficult to redeem.

Customer engagement metric

This metric is used to measure the level of customer involvement—specifically, the extent to which customers are aware of and actively participate in a loyalty program. Examples include the number of logins or app usage sessions, the number of activities customers participate in, and the number of clicks on or opens of promotional messages. A high engagement rate indicates a high level of customer loyalty and satisfaction, which contributes to increased opportunities for repeat purchases and higher sales revenue.

Return on Investment (ROI)

This metric serves as a benchmark to assess whether a program yields a worthwhile return on investment. The increased revenue should be sufficient to cover the invested costs. The calculation is based on a simple formula:

(Increased revenue - Program costs) ÷ Program costs = ROI

If the ROI is greater than zero, it indicates the loyalty program can generate profit.

How Stripe can help

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