Let’s be real—customers today have options. Way too many. From personalized emails to tailored shopping experiences, they’ve seen it all. So, if your brand’s still relying on that old-school “earn points, get stuff” loyalty model without updating it in years, you’re probably getting left behind.
The truth? Loyalty programs can be incredibly powerful—but only if they’re built to genuinely connect with people, not just squeeze more purchases out of them. They need to evolve. They need to feel worth it. And for us marketers—whether you’re working inside a digital marketing agency, social media marketing, or deep in the branding trenches—cracking that loyalty code can be the difference between a customer who bounces and one who stays for the long haul.
Why Loyalty Programs Still Matter (And Maybe More Than Ever)
You don’t need to be a stats nerd to get the picture. But hey, numbers don’t lie. A 2025 Accenture study showed that a whopping 77% of consumers say loyalty programs make them more likely to stick with a brand. Sounds promising, right?
But here’s the kicker, over half of those same people feel like most programs are just… meh. Uninspired. Impersonal. Not rewarding enough to care.
That’s a huge missed opportunity.
And according to Deloitte’s 2024 report, while more people are signing up for loyalty programs, overall engagement is slipping. So yeah, customers want these programs. But they also want them to be good. Better than good, actually—smart, seamless, and tailored to them.
Which Type of Loyalty Program Is Right for You?
There’s no one-size-fits-all model here. The best loyalty program for your brand depends on what you sell, how your audience interacts with you, and honestly what kind of vibe you’re going for. Let’s break down the most common types:
1. Subscription-Based Programs
Think Amazon Prime. You pay upfront monthly or yearly and in return, you get access to VIP perks like fast shipping, streaming content, or exclusive deals. This works best if you’re offering a broad range of services or products.
2. Tiered Loyalty Programs
Sephora nails this. The more you spend, the more rewards you unlock like early product access, free samples, or even invites to special events. Customers love climbing the ladder (and yes, they’ll often spend more just to level up).
3. Gamified Programs
This is where fun meets function. Brands like Starbucks have turned loyalty into a game—collecting stars, unlocking freebies, and earning surprise bonuses. It works especially well for repeat-purchase businesses, like cafés and QSRs.
4. Community-Focused Programs
Some brands go beyond discounts and aim to build belonging. Take North Face’s XPLR Pass: it offers product previews, exclusive events, and a sense of shared values around sustainability and adventure. It’s not just about the rewards; it’s about the lifestyle.
5. Paid Memberships
Walmart+ is a good example here. Customers pay for benefits like free delivery or gas discounts. It creates a sense of commitment, once someone pays for access, they’re much more likely to stick around.
No matter which model you choose, the golden rule is this: align it with who you are as a brand, and more importantly, what your customers actually care about. That’s where input from a good branding or digital marketing agency can be a game-changer.
What’s In It for You (and Your Customers)?
Done right, a loyalty program isn’t just “nice to have.” It can seriously move the needle:
- Higher Engagement: Members come back more often, engage more deeply, and tend to spend more.
- Brand Love: People who feel valued become organic promoters. And in the age of social media, happy customers are your loudest (and cheapest) form of advertising.
- Better Data: These programs give you a window into real customer behavior, what they buy, when, and how often. That kind of insight is priceless, right?
- Bigger Lifetime Value: Even a small increase in retention can lead to a huge jump in profit. Bain & Company says boosting customer retention by just 5% can lift profits anywhere from 25% to 95%.
How to Build a Right Loyalty Program
Let’s talk brass tacks. If you’re going to do this, do it right:
Keep It Simple.
No one wants to jump through hoops to earn a freebie. If your program requires a user manual, you’ve already lost them. Make sure your app or platform is smooth, your messaging is clear, and your customers know exactly how to benefit.
Get Personal.
People will gladly share their data—if they trust you and if it gets them something they actually want. Whether it’s birthday surprises, tailored discounts, or content that actually speaks to them, personalization is key. Use it wisely.
Think Omnichannel.
Your loyalty program shouldn’t live only on your app or website. Bring it to the real world. Integrate it with your physical stores, email campaigns, social channels, even your customer service chats. Be where your customers are.
Measure Everything.
Track metrics like CLV (Customer Lifetime Value), AOV (Average Order Value), RPR (Repeat Purchase Rate), and Program Participation Rate. This isn’t just to impress the CMO—it helps you tweak things in real-time and spot what’s working (or not).
What’s Next? Trends You Should Be Watching
The world of loyalty programs isn’t standing still. Here’s what’s bubbling up:
- AI-Powered Personalization: Smarter tech means smarter programs. AI can help deliver the right reward at the right time—automatically.
- Cross-Brand Collabs: Imagine earning points at your favorite café and your go-to clothing store. These partnerships add serious value and reach.
- Purpose-Driven Loyalty: More customers care about the why. Programs that promote sustainability or social good can win hearts, not just wallets.
Brands That Are Crushing It
Here are a few loyalty programs that continue to raise the bar:
- Starbucks Rewards: A mobile-first experience, integrations with Delta and Spotify, plus constantly refreshed perks? Yeah, that’s how you keep people coming back.
- Walgreens Balance Rewards: By rewarding healthy habits not just purchases, they reframed what loyalty looks like.
- Nordstrom’s The Nordy Club: Style quizzes, personal stylists, home visits… this is next-level luxury meets loyalty.
But Wait—There’s a Catch
With great data comes great responsibility. Customers are becoming savvier about how their information is used. So if your loyalty program leans heavily on data, taking a transparent and ethical approach to rewards, such as clearly stating what data is collected, why it’s collected, and how it’s stored or processed—helps build customer trust and ensures compliance with the UAE’s Personal Data Protection Law (PDPL). Obtaining explicit user consent and being clear about data retention and usage policies is essential, especially when offering loyalty programs..
Final Thoughts: Loyalty Is a Relationship, Not a Transaction
At the end of the day, a loyalty program isn’t about bribing people to come back—it’s about building a relationship. It’s about creating moments of value, delight, and trust that make customers feel like they’re more than just a number.
And as digital marketing agencies, we’re in the perfect position to lead that charge. Whether you’re working in a branding agency, running paid media, or crafting content strategies, loyalty programs can amplify your efforts in a way few other tools can.
So go ahead—keep it simple, keep it personal, and don’t be afraid to shake things up.
Your customers? They’ll thank you by sticking around.
Sources:
Retaining customers is the real challenge | Bain & Company
Consumer Loyalty Program Trends | Deloitte US
15 mind-blowing stats about loyalty
FAQ
1. How do I start a customer loyalty program for my business?
Starting a loyalty program might sound overwhelming, but it’s really about understanding your customers and giving them a reason to stick around. First, figure out what kind of rewards would actually excite your audience, discounts, early access, exclusive perks, that kind of thing. Then, choose a model that fits your business, maybe it’s a points system, a subscription plan, or even a simple punch card if you’re brick-and-mortar.
From there, map out how customers will earn and redeem rewards. Keep it simple, intuitive, and easy to join—nobody wants to jump through hoops. You’ll also need a reliable system or platform to track everything (there are plenty more on that below). Once it’s set up, launch with some buzz. Promote it across your channels, train your team, and make sure customers know what’s in it for them. A soft launch with your most loyal customers can help iron out any kinks before going big.
2. What are the key features of a successful loyalty program?
A great loyalty program feels less like a gimmick and more like a genuine “thank you” to your customers. The key features? Simplicity, relevance, and real value. If it’s too complicated, people will drop off before they even start. And if the rewards aren’t meaningful, they’ll stop caring.
Personalization is huge—customers should feel like the program gets them. Whether that’s birthday perks, tailored offers, or exclusive content, these little touches go a long way. Don’t forget seamless integration across platforms, too. Your program should work just as smoothly in-store as it does online.
Finally, make sure it evolves. Stale rewards and outdated systems are loyalty killers. Keep things fresh with limited-time offers, gamified challenges, or collaborations that surprise and delight.
3. What are the different types of customer loyalty programs?
Loyalty programs come in all shapes and sizes, and the best one depends on your brand and audience. Here’s a quick rundown:
- Points-Based: Classic and familiar. Customers earn points with purchases and redeem them later for rewards. Think Starbucks or your favorite grocery store.
- Tiered Programs: The more customers spend or engage, the more perks they unlock. It’s a great way to encourage higher-value behavior. Sephora nails this with its Beauty Insider tiers.
- Paid Memberships: Customers pay a fee (monthly or annually) for access to premium perks—like Amazon Prime or Walmart+. Works best when the benefits clearly outweigh the cost.
- Gamified Programs: These tap into our love of progress. Points, badges, streaks, challenges—great for keeping people coming back. Ideal for food, fitness, and lifestyle brands.
- Community-Based: Focused less on transactions and more on belonging. Think early product drops, exclusive events, or mission-driven perks. These programs build emotional loyalty.
4. How can I measure the success of a loyalty program?
Numbers don’t lie—but they don’t tell the whole story either. Start with key metrics like:
- Customer Lifetime Value (CLV): Are members spending more over time?
- Repeat Purchase Rate: How often are they coming back?
- Average Order Value (AOV): Are they buying more in one go?
- Enrollment and Participation Rates: How many people are signing up—and actively using the program?
Beyond the data, listen to feedback. Are customers actually enjoying the experience? Are they talking about it? Sharing it? Referring to friends? A loyalty program isn’t just about retention—it’s about building a community of advocates. If your members are proud to be part of it, you’re doing something right.
5. What tools or platforms can help manage loyalty programs?
Good news: You don’t have to build everything from scratch. There are a bunch of tools out there that can handle the heavy lifting—from tracking points to sending personalized offers. A few popular platforms include:
- Smile.io – Easy to integrate, especially for ecommerce brands using Shopify or BigCommerce.
- LoyaltyLion – Known for advanced features and data insights, great for brands serious about customization.
- Yotpo – Combines loyalty with reviews and user-generated content, which is a solid combo for building trust.
- Talon.One – A bit more enterprise-level, but super powerful if you want flexibility and custom rule-building.
- Punchcard-style apps – Perfect for small businesses wanting something simple and affordable.
Look for tools that integrate with your existing CRM, ecommerce platform, or POS system—and always, always test the user experience from your customer’s perspective.