Why bother with customer loyalty programs?
Well, you can’t expect your customers to appreciate your business if you’re not appreciating your customers.
It’s not news to you, I know.
You understand that customer loyalty will always be important. Once you have a base of loyal customers, it means you’re succeeding in building good customer relationships—that’s everything to long-term success.
Customer loyalty programs are the best way to kickstart this journey. Read on for some of the best examples of loyalty programs.
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What is a customer loyalty program?
A customer loyalty program is a marketing strategy that recognizes and rewards customers for buying from a brand repeatedly. Shoppers join loyalty and rewards programs to get benefits, which helps businesses with customer retention and growth.
Successful customer loyalty programs bring businesses close to customers, which is a key success factor for many companies. Research suggests that 81% of customers want relationships with brands, which includes appreciation for being loyal.
That’s why brands allow to benefit from customer loyalty programs in many different ways. Example: Blume’s customers can get points by also doing other things besides buying (see below).
Types of customer loyalty programs
Customer loyalty programs come in many forms and each works differently. For example, a points-based program allows customers to redeem points for benefits, while a mission-based program drives repeat purchases with similar values.
The common types of customer loyalty and rewards programs include:
Loyalty points programs
Now, let’s see how loyalty programs work using examples from real businesses.
Customer loyalty program examples
Dollar Shave Club
The Body Shop
“Earn points every time you shop.”
That’s what Chubbies promises customers in its rewards program.
Sounds … too general. Almost boring.
Still, the brand earned $44 million last year. How, you ask?
The promise of Chubbies’ customer loyalty program is the only “boring” thing. The brand created a unique customer experience by putting its own spin on a common, point-based rewards program.
Customers can earn points for each purchase and climb the ladder from Weekend Connoisseur to Weekend Master. Each different rank gives exclusive perks and benefits.
As you can see, even a one-time customer gets to experience some of the benefits. Besides the opportunity to earn discounts, they also get a generous 100 points for their birthday.
Another best practice Chubbies demonstrates is making it easy for customers to earn points. Customer loyalty is hard to earn, but the same shouldn’t be true about loyalty points. If they are hard to get, then many customers will get discouraged.
That’s why even a one-time customer can get up to 350 points from Chubbies. This amount translates into almost a $20 discount for the next purchase!
This example of a customer rewards program shows us how the landing page should be designed.
Chubbies has a landing page that checks these best practices:
Explain how to participate
Answer FAQs that customers might have
The landing page is also perfectly aligned with the brand’s playful personality—
Positive, colorful, and exciting.
Some businesses overlook landing page design, but you shouldn’t. The customer loyalty program and the way you present it also influence your customer’s perception of your brand.
So, visit Chubbies loyalty program for some inspiration.
For more inspiration and best practices from successful businesses, check out our collection of Best Shopify Stores (includes Chubbies, Allbirds, and Gymshark).
2. Powershop: “Switch your mates”
“Switch your mates!”
That’s what Powershop, a power company, calls its client loyalty program.
This program illustrates three best practices:
Demonstrate value for customers
Make it easy to get started
Strong reasons to make the switch
Let’s break this loyalty program example into these three elements to understand how and why it works.
First, the value.
Powershop’s promise is simple: get $100 worth of free power for inviting friends and family, who also receive $150 free power.
This bonus from Powershop offsets the average annual power bill (around AU $1,400) by about 10%.
Bringing other people on board is simple.
Powershop’s clients just need to copy and share one invitation link. Once someone signs up, the bonus money is automatically deposited.
Easy as that.
Demonstrating why customers should sign up.
To encourage clients to invite more people, Powershop’s loyalty program page has two important elements: compelling arguments about benefits and social proof.
The benefits for clients are a major reason to sign up, so Powershop shares them on the “Why Powershop” page.
Once we click the link—
We get six strong reasons to use Powershop, including guaranteed savings, award-winning customer support, and a lack of fixed-term contracts.
For many people, it should be enough to try the service.
As for social proof, the landing page of this client loyalty program shows the company’s rating on Facebook.
All these points make this example of a loyalty program a great one to follow for service businesses.
3. Starbucks® Rewards
Meet a customer loyalty program with 40+ million members.
Starbucks Rewards is one of the most successful customer loyalty program examples. Yet, it’s super simple: customers buy coffee with an app and receive stars (points).
Stars can be redeemed for free drinks and food, priority service, and birthday bonuses.
Recently, the brand expanded the range of gifts beyond coffee.
For example, with enough points, customers can now get free breakfast and merchandise.
But that’s not everything.
Members of this customer loyalty program also participate in exclusive contests and games. In this one shared by email, they could win more freebies or a 50% discount.
The best part? No purchase is necessary. What a way to encourage joining!
As you can see, Starbucks gives customers multiple ways to redeem stars, which helps keep the brand top of mind.
Having multiple ways to earn points and many ways to redeem them are the two biggest takeaways from this customer loyalty program.
Emails are great for sharing loyalty program offers.
These Ecommerce Email Ideas for Customer Retention should be helpful to create email campaigns that foster loyalty.
4. Beauty Insider, Sephora
When Beauty Insider was launched in 2007, it was an innovative example of a loyalty program. Unlike other brands, Sephora rewarded their customers with gifts and bonuses they could choose themselves.
Now, the program includes three tiers (Insider, VIB, and Rouge), categorized by spending.
Besides spending, the brand also lets customers enjoy perks like access to exclusive events, “meet & greets”, first access to products, and gift cards.
They are called “Experiences.”
These “experiences” are designed to leverage emotional drivers of loyalty such as pride, delight, surprise, happiness, and anticipation.
This strategy is brilliant because true loyalty is defined by emotional engagement. By targeting the emotional part of loyalty, Sephora gives shoppers strong incentives to engage.
Another major feature of this loyalty reward program: community.
Sephora created an online forum where Beauty Insider members come together. They share tips, inspirational looks, ask questions, and recommend products.
The community plays a huge role in strengthening customer relationships and learning more about their likes and dislikes. Thanks to this addition to the loyalty program, Sephora powers growth and drives brand advocacy.
5. Dollar Shave Club
On the surface, subscription-based programs resemble traditional customer loyalty programs with one small catch: a recurring subscription.
This is the approach Dollar Shave Club took to build a customer base.
To succeed, the business had to create a personalized loyalty program with unique benefits and rewards that would keep customers “cocooned” in the brand experience.
A brilliant customer loyalty scheme focused on building a sustainable relationship with every customer.
Benefits of this loyalty program:
Birthday gifts and rewards
First access to new products
Access to exclusive products
Member-only grooming magazine
Dedicated customer support team
Personalized product recommendations
These benefits make Dollar Shave Club sound more like a community than a buy-more-to-earn-more loyalty program.
That’s why the best customer loyalty programs combine most of the points above. With them in place, subscription businesses have a great shot at ensuring long-term customer loyalty.
6. The Body Shop
Over 80% of Millennials are loyal to businesses that share their values.
That’s why many companies choose mission-driven customer loyalty programs. People feel good when their purchase makes a positive difference for something they care about.
The Body Shop is one of these companies.
Thanks to the loyalty program, customers get many ways to earn loyalty perks, including points, access to exclusive events, birthday gifts, and special offers.
It’s not only about treats.
The brand also allows customers to donate rewards to charities.
When a customer gets 100 loyalty points worth $10, they can donate the voucher to Black Lives Matter, No More, World Land Trust, Wires, and Born Free USA.
Businesses with a mission-driven customer loyalty program can build strong relationships with customers and build a great reputation for helping others.
If your company also stands for something, then this type of a member loyalty program could be a great idea.
Have you heard about Digitally Native Vertical Brands (DNVBs)?
These businesses merge ecommerce with social, environmental projects to make the industry greener and supportive of communities and charities.
Learn more: What is a Digitally Native Vertical Brand?
7. Famously You, Famous Footwear
“Famously You” made it to the America’s Best Loyalty Programs 2021—and for a good reason. Unlike other businesses, Famous Footwear ensures that brand experiences give its loyal customers instant gratification.
We’re talking about cash back.
Cashback is the second most-valued monetary reward because customers get to choose how to spend the money.
Famously You uses this tactic. Customers receive cashback rewards when they make purchases and can then use them to reduce order costs.
But savings don’t end there.
Members of this loyalty program also get free shipping, special coupons, birthday gifts, first notifications about sales promotions, and other rewards.
If customers spend over $200 a year, they upgrade to the second tier: Superstar. Once you reach that status, you’ll get even more—and bigger—rewards.
I have to say that $200 is a reasonable amount, especially since an average American customer spends $419 a year on footwear.
This loyalty program example offers us two takeaways: use cash back and keep tier milestones easily reachable.
Will it work?
Well, Famously You has over 22 million members. Plus, many customers love cashback, so it’s a good bet.
8. Chipotle Rewards
Everyone loves free food.
That’s why Chipotle’s point-based loyalty program gifts customers free products.
They can earn points for joining the loyalty program, buying products, and for special occasions like birthdays. Extra point days help to get to free Chipotle faster by doubling the amount of earned points.
Thanks to these benefits, Chipotle Rewards has grown to 24 million members.
That’s great but … that huge number represents only 24% of the company’s customers.
So, Chipotle isn’t easing off the gas pedal.
A couple of months ago, a new loyalty program feature was introduced: Extras. It adds gamification with extra points that can be exchanged for food items, sustainably-made apparel, and even charity donations.
9. 48 Bowl
This loyalty program example from 48 Bowl is a combination of a digital punch card, frequent client discounts, and tiered rewards. It achieves two important goals: awarding guests and recognizing loyal clients.
The program has three tiers: Silver, Gold, and Platinum.
Joining the club and unlocking new levels is easy.
Free game for becoming a member
Regular exclusive deals, discounts, and offers
Discounts for every visit on bowling, food, and beverages
The only thing required to start is to install a special loyalty app to get a digital punch card. Every visit counts towards unlocking new benefits, making this loyalty program a great example for entertainment businesses to copy.
Hotels.com uses a tiered, points-based loyalty system, which is the most popular in the hospitality industry.
Thanks to this scheme, customers can get a wide range of benefits: discounts, free stays, free room upgrades, priority customer service, different checkout times, and others.
Hotels.com realizes that there are many ways to build loyalty, so they focused the rewards program on allowing clients to personalize their stays.
That’s a great tactic, as 57% of consumers are interested in customizing their hotel experience (choosing a checkout time, room upgrades, etc.)
Not surprisingly, the highest tier has the most personalization options.
The biggest takeaway here?
Focus your loyalty rewards programs on something people really want.
Customer loyalty programs: summary
Customer loyalty programs are a must for successful customer retention. They come in many forms but have a few common goals: retain customers, show appreciation, and make them feel good about buying.
Carefully consider which customer loyalty program is best for your business.
Points can motivate customers to buy more, while tiers contribute to the feeling of exclusivity. Cashback and discounts are also great motivators, especially for ecommerce businesses. Lastly, not all incentives need to be monetary, especially for ethical or eco-businesses that attract customers keen to support a cause or charity.
Pawel is a Head of Growth at Wisepops and a Lead Generation&Pop-up Expert.