What type of promotional tool encourages repeat purchases through rewards?

Loyalty programs are specifically designed to encourage repeat purchases by rewarding customers for their continued patronage. These programs often provide points or rewards that accumulate with each purchase, leading to discounts, free products, or exclusive offers. The structure of loyalty programs creates an incentive for customers to return to the business to redeem their rewards, fostering brand loyalty and customer retention.

In contrast, coupons offer short-term discounts that may encourage immediate sales but do not necessarily build a long-term relationship with the customer. Contests can engage customers and create excitement, but they rely on chance rather than a commitment to repeat purchasing behavior. Event marketing aims to create brand awareness and excitement through events, but it does not provide the personalized incentive that loyalty programs do. Therefore, loyalty programs are the most effective tool for promoting repeat purchases through a structured reward system.