More than 90% of companies use some type of customer loyalty program to engage with their audience. Whether you are looking for ideas to strengthen your existing program or are piloting a new one, these ten loyalty program examples can help you get started.
Table of Contents
- What Is a Customer Loyalty Program?
- Why Do Loyalty Programs Work?
- Customer Loyalty Program Examples
What Is a Customer Loyalty Program?
A customer loyalty program rewards customers who repeatedly engage with a brand. There are four primary types or categories of loyalty programs.
- Social media
Loyalty programs are designed to incentivize repeat interactions and purchases by offering members discounts, VIP events, unique offers, and more.
They are a customer retention strategy that motivates customers to continue interacting with your brand rather than competitors.
Future of Customer Loyalty
Customer loyalty programs are nothing new. They’ve existed for years and you may be quite familiar with them, but they have evolved and they are experiencing a rise in popularity. A recent forecast estimates that the loyalty management market will grow to $18.2 billion by 2026.
What is contributing to this increased demand for loyalty programs? One of the most important factors is digital transformation. It’s a bit of a buzzword, but it just means that it is more necessary than ever for businesses to integrate technology into their processes, customer experiences, and marketing.
COVID-19 and stay-at-home orders accelerated that growth. When people were stuck at home, they did all their shopping online and digital marketing boomed as a result.
On top of that, effective digital marketing relies on understanding your audience, which ads and campaigns are working, and why. With new data privacy regulations and third-party deprecation, more businesses are looking for ways to not only engage and retain customers but to collect first-party data. Customer loyalty programs can do both.
The future of customer loyalty is focused on connecting online experiences, whether it’s through your store’s mobile app, digital ads, or site, to your offline in-store experience.
Why Do Loyalty Programs Work?
Customer loyalty programs are one of the most effective ways to drive revenue, retain customers, and create brand advocates.
Consumers are currently more emotionally invested in their favorite brands than they’ve been in the past, viewing the brand-shopper relationship as more than just a transactional exchange. This also explains why the 2020 Yotpo survey respondents were willing to spend more on a brand they’re loyal to even if cheaper options exist.
Studies show that 75% of consumers favor brands that provide reward programs. The more they buy or engage with a brand, the more rewards they earn.
According to Nielsen, 84% of consumers say they’re more likely to stick with a brand that provides a loyalty program. In a Bain study, 66% of consumers say the ability to earn loyalty rewards changes their spending behavior.
Customers often want an enticing offer to make them feel special while providing perceived cost savings. About 50% of consumers say their major reason for joining a loyalty program is to receive rewards on everyday interactions and purchases.
Companies with loyalty programs outperform brands that don’t have them, especially when it comes to sales and customer satisfaction.
Loyalty Program Benefits
Running a loyalty program means giving away something such as sales, discounts, free shipping, or early access. But the payoff for these reward programs is invaluable. Here are some key benefits.
- Increased customer referrals. Customers will likely tell others about a great loyalty rewards program. More referrals mean more customers.
- Improved customer retention. If consumers find value in your loyalty program, they’ll likely repeat the interaction. Besides, it costs five times more to acquire a new customer than to retain an existing one.
- Higher sales. According to recent loyalty research, 49% of consumers say they’ve spent more after joining a loyalty program.
- Create brand advocacy. With a successful loyalty program, you can turn regular customers into brand advocates who help your business get in front of new consumers through word of mouth, which is a low-cost marketing strategy than paid ads.
Customer Loyalty Program Examples
According to research, 47% of U.S consumers (nearly half) have used a loyalty program. And while these figures may seem small, they represent a critical shift from just a few years ago when less than a quarter (24%) had heard about these programs.
Today, 65% (nearly two-thirds) say they’ve tried at least once or twice to earn rewards with a loyalty program.
This underscores how rapidly the market is shifting toward loyalty programs and the potential to enhance customer loyalty and increase brand visibility. Here are our picks for the best customer loyalty program examples.
Quick Service Restaurants (QSR)
Popeyes has become more than just a famous chicken chain. It has a cult following and dedicated customers. Part of that is thanks to the loyalty program it launched in 2021. The program rewards recurring customers with food deals, branded swag, and members-only experiences.
The Popeyes loyalty program was designed so members can earn rewards and points with each transaction based on how much they spend. For example, loyalty program members earn ten points for every dollar spent on the Popeyes app or online and bonus points on combos and family deals. They also get rewards for personalized challenges as well as other exclusive benefits.
In addition, customers who sign up for the loyalty program can get free apple pie, a small drink, or a regular side.
The program’s launch came as Popeyes’ digital sales made up 17% of total sales in the U.S. As of Q1 2022, the program has contributed to a double-digit increase in same-store sales growth even through the global pandemic. Popeyes’ same-store sales increased 30% on a two-year basis.
Since repeat customers are more powerful than new ones, Dunkin’ is doing everything to keep them.
For breakfast and coffee lovers, Dunkin’ offers a Perks app that gives loyal customers points for every purchase. The current program, which is known as DD Perks, allows consumers to sign up through the Dunkin’ app or website. Currently, Perks has over 5 million users.
Mobile integration is also a large focus for Dunkin’. In general, it is becoming increasingly important for quick-service restaurants.
The DD Perks program was developed to provide customers with new levels of convenience and speed. Millions of members have signed up for DD Perks and use it for mobile ordering. The results suggest that this will be an ongoing trend.
Customers get a free beverage when they reach the 200-point mark or for each $40 spent. They can then earn five points for every $1 they spend at any Dunkin’. Also, they get other perks, including a partnership with Shell fuel for customers to earn $0.15 off per gallon for five Dunkin’ drinks.
Dunkin’s website advertises faster checkout for members plus the ability to order via the Perks app and skip the wait time at the drive-thru or counter.
In the world of loyalty programs, Starbucks reigns supreme. The coffee chain’s rewards program has consistently been recognized as one of the best.
As of October 2021, the Starbucks Rewards program had nearly 25 million members. The loyalty program now represents 53% of overall spending in their stores.
The coffee giant is at the top because of its personalized customer experience.
The Starbucks Rewards program awards members with “stars” when they order or pay using the Starbucks app. As customers earn stars, they receive free coffee and products.
Centralizing customer transactions like this creates a goldmine of data on their behavior and preferences empowering the brand to offer more relevant communication and perks to its customers.
In addition to celebrating their birthdays with a free treat, Starbucks loyalty program members also receive bonus rewards like double-star days as well as access to exclusive offers and games.
However, it’s more than free treats that hook customers enough to become loyal Starbucks customers. Starbucks also uses geolocation data in its app and geofencing marketing. Customers receive push notifications of deals and marketing messages when they are nearby a Starbucks location.
The number of Starbucks Rewards members increased by 13% over the last year to 27.4 million members.
Panera Bread is a big US bakery chain comprising more than 2,000 cafes, and it operates one of the industry’s largest customer loyalty programs.
The Panera Bread loyalty program is designed to enable customers to receive free rewards every time they visit the store. Members get free rewards when they buy items like soups, sandwiches, coffee, and more from any other Panera café. To join the program, customers are expected to sign up for the MyPanera Rewards.
The best thing about the Panera loyalty program is that customers get a reward just for eating at Panera. They don’t have to purchase something specific or spend a particular amount of money.
Unlike other customer loyalty programs, customers don’t earn points for the amount spent. Instead, Panera tracks your activities to determine the kind of rewards you’ll get.
You’ll find the number of visits needed until your next points in your account. Essentially, you need to visit Panera more often to be able to earn points; the more you visit the store, the more rewards you’ll earn.
You can have multiple daily visits as long as they are more than 2 hours apart. In addition, a visit counts if customers order a coffee or a full meal, but rewards reflect what customers usually buy and/or spend.
No two members get the same rewards– Panera tailors the points based on customers’ purchase history.
McDonald’s customer loyalty program has signed up over 26 million members since its launch almost a year ago. It has become one of the industry’s fastest-growing and most popular loyalty programs shortly after its debut.
McDonald’s Rewards’ omnipresence and the frequency with which consumers use the chain have made it easy to match competitors.
CEO Chris Kempczinski called the program “an instant fan favorite” that is already driving results. The company cited the rewards program for its two-year same-store sales increase of 14.6% in Q3.
Customers can earn 100 points for every dollar spent. They can also work toward 16 reward options, distributed into four different tiers. Some items like a cheeseburger or a hash brown cost just 1,500 points to redeem, while a Big Mac or Happy Meal will set members back 6,000 points.
With the McDonald’s app, you can easily re-order favorites, access exclusive daily deals, and select convenient pickup options with Mobile Order and Pay.
To encourage customers to join, McDonald’s loyalty program allows them to earn free large fries after downloading the app and unlock free faves in the app with 1500 bonus points after the first purchase.
Retail and Ecommerce
Anthropologie is a US clothing retailer operating in more than 200 stores. Its customer loyalty program, AnthroPerks, offers perks such as:
- No tiers or points, just members-only perks that apply to each registered member
- Members enjoy paperless returns as well as free shipping on every $150+ order
- Early access to new collections and birthday treats
AnthroPerks is all about rewarding customers with the best shopping experience. It demonstrates that fashion loyalty programs are equally capable of creating communities and making the shopping experience pleasant. Rewards like free shipping could be tiered benefits but turning them into a customer perk generates loyalty by developing customer gratitude instead.
On the landing page, AnthroPerks starts with a “Sign up—it’s free” call to action to address the buyers’ price concerns.
The company then explains the benefits of joining the loyalty program, with each box representing a perk that members enjoy, from “inclusive” access to new products and promotions to compelling incentives such as annual free shipping.
Anthropologie also sends a birthday discount to customers for a members-only celebration. The key to Anthropologie’s loyalty program success is how well it delivers on its promise with emails, including special discounts and birthday rewards.
Beauty Insider, cosmetic brand Sephora’s loyalty program, is one of retail’s most popular. It offers members access to extra perks through store credit cards, access to promotions, exclusive promotions, and discounts.
Across the retail customer loyalty landscape, many programs focus only on transactional loyalty where rewards equal to discounts and prizes are rife. For Sephora, the program’s success correlates more closely to emotional and community drivers.
According to research, almost 75% of what triggers customer loyalty and engagement are emotional perks. Customers now interact with brands based on emotional loyalty drivers.
One strategy for acting on an emotional driver is to offer birthday perks through a loyalty program. Sephora provides members across all tiers with birthday offers, tapping into the personal element with customers. These gifts include mini-sets from popular brands like Drunk Elephant and Kat Von D. Additional loyalty perks incentivize shoppers to join the loyalty program.
The Sephora loyalty program personalizes its perks allowing members to pick one of three benefits for the year, including extra points, sharing makeover experiences with others, or quick shipping. This makes it adaptable to every member’s needs.
The Sephora customer loyalty program boasts 17 million members in North America alone who are responsible for up to 80% of the company’s sales. The program brings customers to the Sephora website even when they aren’t shopping.
Enhanced brand engagement results in a 22% rise in cross-sell and a 13-51% growth in upsell revenue. This encourages people to spend more and also increases customer loyalty.
After 84 years, the specialty outdoor retailer REI Co-op changed how members can connect with the co-op by updating its lifetime membership program with five new benefits. It also increased the price from $20 to a $30 one-time fee.
REI co-op introduced new benefits in addition to its existing perks, including automatically 10% off almost everything in the store, members-only coupons, and discounts on classes, rentals, adventures, and events.
The five new additions include:
- Free shipping: Free US standard shipping on all orders with no minimum purchase. Exceptions are for oversized items and international shipping.
- Charity donation: REI will donate $5 to the REI Cooperative Action Fund with each new membership purchased to support organizations committed to equity, justice, and belonging in the outdoors.
- Member-only collections: A curated, broader set of members-only products each month, such as limited editions, brand collaborations, early access, and special offers.
- Shop service discount: In-store snowboard, ski, and bike shop services discounts are doubled to 20% off for members.
- Used gear for members only: Re/Supply or used gear offerings are now just for members.
Today, REI boasts 20 million lifetime members intending to grow to 50 million by 2030, making it one of the most engaged loyalty program examples.
Hotels and Hospitality
Marriott International combined the three loyalty programs—Marriott Rewards, Starwood Preferred Guest, and The Ritz-Carlton Rewards —into one.
The programs are now operated under one set of benefits and currency spanning Marriott International’s portfolio of 29 brands and over 6,700 participating hotels. Members can earn and redeem rewards from these hotels and receive Elite status with the new Elite tiers.
Program members can also earn, on average, 20% more points per dollar spent and have their Elite status recognized at each Marriott-branded hotel, as well as, book stays throughout the portfolio on the website, apps, and customer engagement centers.
While FordPass Rewards is among the most comprehensive North American loyalty programs in the auto industry, adding the three new tiers gives members access to extra exclusive offers and benefits.
“FordPass Rewards is a unique relationship-building tool for our customers and our dealers, as it offers flexibility and drives ongoing business to our stores,” said Elena Ford. “Tiers is not only a foundational way to increase engagement with our customers throughout the ownership period of their vehicle, but also a platform to launch new services such as Pickup & Delivery – bringing great experiences to our most loyal customers.”
Customers move up the tiers by achieving milestones through buying or leasing a new Ford vehicle (50 milestones). They can also earn milestones by getting a retail service at the dealer (25 milestones), purchasing a Ford Blue Advantage used vehicle (25 milestones), and being active FordPass Rewards Visa cardholders among others.
The FordPass Rewards section, one of the app’s frequently used features, goes hand-in-hand with the customer loyalty program. It allows them to easily check their tier status and points balance and access benefits. The app offers customers access to Vehicle Health Alerts and emergency services, remote command and control features, and information on Ford Credit and recalls– all at no cost.
Customer loyalty programs are what give most brands the advantage. In addition to increasing customer satisfaction, experience, and sales, loyalty programs are a great source of first-party data. They can help you strengthen your marketing campaigns, and reach customers when they are most likely to buy.
This is where Goodway excels. We work with national brands and multi-location businesses to reach customers, at-scale in creative but data-driven ways. To learn more about how Goodway can help you create more effective marketing campaigns with better data, audience targeting, paid media services, and more, schedule a consultation.