From specialty retailers to big name brands, these successful loyalty programs are driving engagement, retention and profits.
- The best loyalty programs don’t have to be household names to be successful.
- Successful loyalty program examples deliver maximum value with the right mix of benefits.
- The best loyalty rewards programs are easy to join, easy to use and incentivize members.
- Successful loyalty programs share five common elements.
- There are four main types of loyalty programs, each with their own differentiating opportunities.
In today’s retail landscape, customer loyalty programs are considered a key ingredient to the customer-brand relationship. Eighty-six percent of U.S. shoppers say a loyalty program influences them to buy again from a particular brand, and 44% say a loyalty program highly influences their purchase decision.1 What’s more, consumers spend 37% more with brands when they are part of the brand’s loyalty program.2
Luckily, your brand and your program don’t have to be household names to win the loyalty game. In fact, many lesser known customer loyalty programs have just as much staying power when it comes to engaging customers and increasing sales.
That includes the 10 successful loyalty program examples we’ll discuss here. Each one delivers plenty of value to keep the retailers’ customers happy — and coming back for the long term. Best of all, you can apply features of these best rewards programs to strengthen your own loyalty program.
What are the best loyalty programs?
Best-in-class loyalty programs help attract new customers, retain existing ones, reactivate lapsed customers and increase revenue through repeat purchases. Despite increased competition, the 10 successful loyalty program examples below may not be widely known — yet they’ve thrived by building relationships, creating a sense of exclusivity, and delighting shoppers with personalized benefits and other perks tailored to their interests.
What are the four main types of loyalty programs?
Before we dive into the examples, let’s pause a moment to look at the four most popular types of loyalty programs — each of which we’ll illustrate in more detail below. Bear in mind that these aren’t the only approaches, and it’s not uncommon to incorporate more than one type into a single loyalty program. To differentiate themselves, retailers should build a program that fits their goals, company culture and customer needs.
The four most popular types of retail loyalty programs are:
- Points-based loyalty programs
- Free versus paid customer loyalty programs
- Experience-based rewards programs
- Tier-based loyalty programs
Best loyalty program examples: Successful loyalty programs build relationships with simple programs and customer-centric rewards.
Loyalty programs that are easy to join and interact with work well to engage and retain customers. These loyalty programs also thrive by being customer-focused and delighting shoppers with personalized benefits and other perks tailored to their interests as embodied by your brand.
IKEA’s free loyalty program, IKEA Family, targets consumers who love their homes and love to shop at IKEA®. Unlike many traditional loyalty programs that focus on earning and redeeming points, IKEA Family focuses on creating a delightful shopping experience. Members enjoy special perks just for belonging — like free beverages while they shop, special discounts, exclusive offers, simplified checkout, free workshops and more. By understanding their customers — and the types of benefits that appeal to them — IKEA creates engagement, drives sales and earns its place among the best customer loyalty programs.
The North Face loyalty program, XPLR Pass program (formerly VIPeak), incentivizes loyalty members to earn more and more rewards by offering traditional points-based options as well as unique opportunities tailored to match its customers’ lifestyles. For instance, members can earn points for bringing a reusable bag when shopping in stores, using The North Face app to check-in at a national park or national monument, and more.
Ace Hardware’s Ace Rewards program offers members a “toolbox full of ways to earn points, receive rewards and save.” Exclusive benefits include a welcome gift, 10 points for every dollar spent, access to special offers, events and instant savings, free delivery and additional mobile app benefits.
Loyalty Marketing Takeaway
Staying true to your brand message and culture can help your business attract loyal followers who want to interact with your company because they feel a genuine emotional connection. Look for creative ways to reward loyal followers for taking specific actions. Offer exclusive rewards that can’t be replicated by your competition. Above all, keep your loyalty program simple, transparent and easy to understand and interact with.
Best loyalty program examples: Fee-based loyalty programs provide more value to members.
Research shows that more than one-third of shoppers would pay for enhanced loyalty programs that offer more than basic perks and points.2 And a recent report by McKinsey shows that consumers are 62% more likely to spend more on a brand after joining a paid loyalty program.3
While hardly “under the radar,” Amazon’s Prime membership program is a clear example of a successful fee-based loyalty program. Prime customers are happy to fork over membership fees because they feel they’re getting more value in return for what they spend upfront. For example, taking advantage of free shipping, free Prime video and free Kindle book benefits more than makes up for the cost of the annual membership.
1800flowers.com’s Celebration Passport rewards members of its paid loyalty program with exclusive perks when they send gifts to others. From free shipping across their family of brands to free greeting cards, exclusive content and events, gifting tools and priority customer service support, giving is fast and easy for members.
Loyalty Marketing Takeaway
In addition to being an enticing tactic to encourage more spending, fee-based loyalty programs allow brands to customize the experience and provide more value to their members.
Best loyalty program examples: Unique experiences and reward redemption flexibility drive customer loyalty.
Offering customers the right mix of benefits and rewards encourages them to participate in your loyalty program and helps build increased traffic and sales. When you can tap into your customer interests and preferences, your program adds more value to your members and to your brand.
LEGO’s LEGO® VIP rewards program is a traditional points-based program with no tiers or limits. Members simply earn points whenever they shop in LEGO-brand retail stores and at LEGO.com. The program’s flexible and experiential reward structure includes perks such as tickets to special events and experiences like LEGOLAND.
Zumiez customers can join The Zumiez Stash, a free loyalty program that offers rewards points for shopping in-store or online, and for completing certain activities. A highlight of the program is that points can be redeemed for access to memorable VIP experiences with favorite athletes, musicians and artists, as well as sweepstakes entries and more traditional rewards like limited edition merchandise.
Loyalty Marketing Takeaway
Understanding and delivering the benefits and rewards that matter most to your customers, including experiential rewards, helps loyalty program members feel special and part of an exclusive club. Try using your loyalty program to test more personalized rewards that not only align with your brand’s core values but also your customers’ individual tastes.
Best loyalty program examples: Program tiers motivate and reward VIP customers.
Incorporating tiers into your loyalty program lets you elevate program members based on the actions you want to motivate them to take. Tiers can be based on spend, points or other parameters that represent how you define customer engagement.
The Sill’s Green Rewards loyalty program supports and rewards shoppers on their “plant parenthood journey.” With tiers ranging from Member to VIP (very important plant person), this creative loyalty program makes it easy for plant lovers to earn and redeem points that can be used for free products or dollars off their next purchase. Members can move up the tiers based on annual spend to unlock more exclusive benefits.
Aldo Shoes’ loyalty program, AldoCREW, also includes tiers based on annual spend. Basic benefits include an instant welcome offer, 20% off birthday treat and price-drops and bundles. Higher tier benefits include free shipping and a free birthday gift. Members in the highest tier, VIP, can even share their program discount with friends.
Jeweler Anna Beck’s Anna Beck Rewards tier-based rewards program is incredibly straightforward and easy to understand. Shoppers are prompted to join immediately once on the website and are incentivized with an immediate discount. By rewarding customers early in their brand experience, loyalty program members are incentivized to earn more benefits and rewards by moving to a higher tier.
Loyalty Marketing Takeaway
Loyalty program tiers can give your most loyal members the feeling of exclusivity by allowing them access to better offers, discounts and other privileges. For you, tiers based on spending levels can be an enticing tactic to encourage more spending. By providing enough value and the right mix of benefits, shoppers will be motivated to return to your store more frequently and interact with your brand.
What elements should a good loyalty program have?
Retail brands of any size and budget can use customer loyalty program best practices and successful loyalty program examples, like the ones above, to increase engagement, retention and sales.
These five ingredients of the most successful loyalty programs can help your business enhance customer relationships by providing the right mix of value and benefits.
1. Understand your brand culture, message and mission so you can align your loyalty program benefits with your values. For example, offer member benefits that are unique to your brand’s personality and can’t be easily duplicated by a competitor. Be sure to convey your program benefits clearly and consistently in all customer communications.
2. Know what your customers want from your loyalty program. Dig into the details of your customer data and consider scoring customers based on spending habits. Conduct surveys or focus groups to gain more customer insights.
3. Examine shopper behaviors to see how they influence purchase decisions. For example, by understanding how age and life stage impact loyalty, you can tailor your programs to better align with the factors that create more value for your customers.
Further Reading: Our fifth annual Retail Customer Brand Loyalty Study reveals how consumer shopping behaviors and loyalty preferences have changed since 2021. Get your free copy of the full 2022 report.
4. Create the optimal mix of benefits and rewards that appeal to your customers, whether it’s tiers, partner rewards, customized benefits, or a combination of all perks. Look at transactional data and feedback to create a program that delivers the most value. Motivate specific behaviors by awarding points for purchases and activities like reviews, interactions, etc.
5. Create a great customer experience by making your loyalty program easy and intuitive for shoppers to join and interact with. For example, regularly communicate the benefits of your program across all channels and platforms. If your program includes tiers or a fee-based membership, make it so simple to understand that it’s a no-brainer for the customer. This includes the ability to earn, view and redeem points online and offline. Ensure a positive digital experience with your rewards program, as well as seamless integration between online and physical stores.
What is the most successful loyalty program?
There is no one-size-fits-all approach to best-in-class loyalty programs. But the most successful loyalty programs focus on providing value to the customer. Savvy retailers know that loyal customers spend more money with their preferred brands — and those shoppers are more likely to share their positive experiences with friends and family. By using the customer loyalty program examples and best practices above as a guide, brands of all shapes, sizes and budgets can create successful loyalty programs that engage customers, create brand advocates and ultimately grow their bottom lines.
Are you ready to take your customer loyalty program to the next level? CCG’s retail marketing experts have focused on helping our clients build stronger, more profitable customer relationships for more than 40 years. See how our retail marketing services and solutions — including loyalty program development, refinement and management, Statistical Loyalty Program Optimization™ and retention program development — can help your organization meet its customer retention goals. Call us today at 303.986.3000 for a free consultation.
1 “The State of Brand Loyalty 2022,” Yotpo, https://www.yotpo.com/the-state-of-brand-loyalty-2022/, accessed Aug. 12, 2022
2 “More Than One-Third of Shoppers Would Pay for Enhanced Loyalty Programs,” Marie Griffin, Retail Touchpoints, posted May 21, 2018, https://www.retailtouchpoints.com/topics/loyalty/more-than-one-third-of-shoppers-would-pay-for-enhanced-loyalty-programs, accessed Aug. 12, 2022
3 “Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand,” Julien Boudet, Jess Huang, Ryter von Difloe, McKinsey & Company, posted Oct. 22, 2020, https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/coping-with-the-big-switch-how-paid-loyalty-programs-can-help-bring-consumers-back-to-your-brand, accessed Aug. 22, 2022