5 Best customer loyalty programs (And e-commerce loyalty program examples) (2022)

The era of loyalty program began in the 70s with the concept of award-winning miles by airline companies. The early successful loyalty program example was the Frequent Flyer program from American Airlines.

Since then, more and more companies are implementing loyalty programs as a better connection between the company and the customer;

According to Bond, the top five sectors in which spend increases when a consumer is a member of the loyalty program are:

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The customer gives their personal information and agrees that the company uses them to improve sales. At each payment, the customer gives their loyalty card or code in the mobile application and realizes benefits.

In this way, customers tell the merchant about their habits.

Companies must continuously work on improving their products and services.

If they don’t, there are new companies with new products who will easily erase them from the market.

Excellent customer experience, customer retention, the appropriate reaction to customer dissatisfaction, bright areas of the business to improve and maintain the quality of products and services following established standards.

When designing and building a loyalty system, the main goal should not be the profit of the company.

Consumer satisfaction and better user experience must be a priority. (read our CX ultimate guide)

Before diving into more loyalty program examples, let’s cover the different types of programs.

Types of Loyalty Programs

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The goal of each loyalty program is to maintain a long-term relationship with the customer.

But also to work on the customer’s satisfaction regularly.

(Video) 10 Innovative Customer Loyalty Programs (And How to Start Yours)

More and more users access loyalty programs through their mobile devices.

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What are the different types of loyalty programs?

1. Points Loyalty Program

The Point Loyalty Program is considered the most frequent loyalty program. Points are earned for different behaviors, such as buying, visiting stores, or downloading an application.

It is based on the principle: you spend more, and you will get more. This is very much the answer to those consumers who pay a lot.

When a customer buys a product or a service, he gets a certain amount of points depending on the purchase. That can be a discount or some special treatment for the buyer.

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Point loyalty programs can get excellent customer information that is important for making business decisions, and one of the main drawbacks is that the rewards are somewhat more expensive than other types of loyalty programs.

2. Tiered Loyalty Program

The tiered loyalty program is based on the fact that buyers will get more rewards as they buy more.

In accordance with this, it uses multiple levels of a system that rewards the primary loyalty and encourages more purchases.

This type of program provides two things – fast customer satisfaction and rewards.

It is essential to communicate with consumers as they want to know what the benefits of loyalty programs are, how much they currently have points, at what level they are now and how much they have to spend to reach a higher level.

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A satisfied customer here will repeat the purchase but also, he will be ready to buy the product at a higher price.

It is common practice to use this loyalty program in the travel industry.

3. Value-Based Loyalty Program

Value-based programs are intended for those who focus on charities. Let’s say you have an online store with eco-friendly products. Your target audience is ecologically aware, and you are willing to do everything to have more people engaged in saving our planet.

Then the loyalty program is a great way to show them how it means to you.

Once a customer buys an eco-bag or eco-food from your store, he or she gets a certain number of points he can use in future purchases, and you donate a certain amount (for example $50) dollar to an environmental organization that works in your neighborhood.

What’s important here is transparency – your customers want to know how much you have donated to a particular organization and how much donations helped to develop the organization itself.

A value-based loyalty program is specific because you connect your customers to a deeper and more emotional level.

4. Coalition Loyalty Program

The Coalition Loyalty Program enables sellers to extend their rewards outside of their loyalty program to deliver more value to consumers than they would with a stand-alone program.

Such programs allow for quick and easy placement of relevant offers to the mutual satisfaction of the members and partners of the program.

(Video) Types of customer loyalty programs

Also, users can collect points and utilize the benefits of all card partners.

By participating in the program, users receive relevant bids and benefits created according to their buying habits and needs.

We will now cover our last loyalty program example.

5. Non-Monetary Loyalty Program

The non-monetary loyalty program is an alternative to conservative loyalty strategies.

Like the Peiguss (2012) says, non-monetary rewards are created around customer values. Loyalty programs that use this do not offer monetary incentives but, rather, offer value-centered incentives that entice customers to buy.

In order for this loyalty program to be successful, you must truly know the target group. Market research is needed to select the best strategy and to see which form of donation the customers prefer most.

There is another loyalty program example that must be highlighted. We are referring to the no loyalty program where the brand is so strong and doesn’t need any program.

Certainly, the most famous example is Apple. When the release date for a new Apple product is announced, people around the world decide to camp for a few days before in front of the Apple stores, just to get the first one to snatch their product; without any discounts or similar delays in purchasing.

If you are not as lucky as Apple, let’s deep down and see what loyalty program examples you can use in your loyalty program.

E-commerce Loyalty Program Examples

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According to McKinsey & Co, the subscription e-commerce market has grown by more than 100% a year over the past five years.

One of the best points loyalty program examples is Walgreens, an American company that operates as the second-largest pharmacy store chain in the US.

When you shop at Walgreens Ap, you just need to use your Balance Rewards membership to clip coupons and save instantly to check out. You can track your Balance Rewards points and save them at the register or earn Balance Rewards for healthy choices.

For example, for every $50 a customer spends on beauty products, they will get 5,000 points. These points can be redeemed for discounts on future purchases. Also, you can save extra if you unlock additional savings – you can get paperless coupons, special promotions, and members-only offers.

Coalition Loyalty ProgramExample

Danish online beauty store, Matas is a convenient example for Coalition Loyalty Program. Matas has partnered with more than 15 other companies, and users can gain points when buying from any of the partner companies.

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They are united under the name Club Matat involving more than 300 stores across the country which sell perfumes, cosmetic and healthcare products. Users sign up for a Matas account and use points to buy different products.

The program improves better user experience, enhances the brand strength and encourages sales to all partners, and the customer gets as many excellent products as possible.

RetailLoyaltyPrograms Example

Some more examples are Costco Wholesale where buyers get discounts on the purchase, especially for wholesale. One particular feature is that it is all offered in bulk and makes it easier to buy all the desired products.

Costco has created a unique customer experience. It has access to the membership card with access to warehouses that are full of products for everyday use. Costco’s greatest advantage is that a wide range of services can be found in one place.

The more you buy, the more points and discounts you will get.

(Video) 5 Customer Loyalty Programs, Compared | Fivestars, Square, Clover, Toast, and Spark Loyalty (2022)

There are still many e-commerce businesses that use reward systems. Some of them are Amazon, Grow & Behold, Sophie & Toffe, Kiehl’s, Incircle at Neiman Marcus, Bulletproof, and others.

Fantastic Services loyalty program is another great example where you get exclusive access to offers and special discounts.

Mobile App Loyalty Program Examples

A report from Vibes shows that 77% of smartphone users say receiving surprise point/rewards, exclusive content, and special birthday/anniversary messaging would have a positive impact on their brand loyalty.

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The most famous example of a tier loyalty program is the Starbucks Rewards program.

Everyone knows about Starbucks, but you may not know what benefits you may have from using their products. You can earn stars in many ways – at Starbuck stores, in grocery stores, in the mail, on double-star days, or in and out of Starbucks stores.

There are two levels on the app – one is green level (0-299 stars) and second is gold level (300+ stars). At green level, you earn 2 Stars per $1 Spent, you get Birthday Reward, you can Pay through the App, Order Ahead, get free In-Store refills and you will be invited on member events. Gold level follows after 300 collected stars.

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Then you get monthly double-star days, personalized gold card and be rewarded after every 125 stars.

Another great example is Uber – transportation network company from San Francisco.

They have one of the first significant applications that came out with a loyalty system. Users love the Uber application for free rides and discounts on driving. Uber drivers earn every interaction, which gives an even better impression of Uber himself, placing his drivers in the first place.

Uber’s application also includes a VIP element – riders move gold, platinum, and diamond levels and thus earn more money and free upgrades za UberBlack and accelerated points earnings.

Some of the other examples of mobile apps with amazing loyalty programs are Sephora, Cumberland Farms, Jamba Juice’s, Kroger, Sweetgreen, and others.

We have covered additional examples in this article.

Gamification Loyalty Program Examples in SaaS

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Software as a service (SaaS) is a model for the distribution of software where customers access software over the Internet.

In SaaS, a service provider hosts the application as its data center, and a customer accesses it via a standard web browser.

Gamification is the application of techniques and elements of the game to everyday tasks and business processes.

It consists of points and levels, resource collection, challenges, missions, and social components.

Gamification is undoubtedly the future recognized by the world’s largest companies and used in communication with customers, promoting and applying new products, and even in internal efficiency-enhancing processes.

Below are some examples of gamification in SaaS.

Gamification Example With CommercialTribe

CommercialTribe is a SaaS platform for training, development, and onboarding of sellers and managers.

(Video) How To Implement Customer Loyalty Program

They use innovative approaches and activate coaching among managers and provide them with clear recommendations and guidelines.

They are trained with interactive quizzes and videos and rewarded with point cards, particular highlights, and by giving them star evaluation depending on the achievement.

Twitch

Twitch is a platform for game video streaming. It adapts a lot of gamification techniques, and there are several reward systems.

Just a few of these are the Drops – awards you get for just watching shows and thus increasing the engagement of the user.

Also, users can become premium members and make money in the game. So they can conquer and change vehicles, skins, characters, and virtuals currencies.

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In the end, some loyal users are rewarded by custom loyalty badges, and some of them are Base Badge, 3-Month Badge, 6-Month Badge, 1-Year Badge, and 2-Year Badge.

Quuu Promote

Quuu Promote is a marketing automation tool that adjusts game mechanics to increase user engagement. The more benefits a user uses, the more rewards it gets.

Quuu helps brands and bloggers share their content in relevant places and reach their targeted audience.

In addition to being easy to use, Quu rewards content that reaches a large number of users with free credits. Twenty-five badges can be won and indicate the goals to be achieved. The higher the goal is to get more free credits.

There are several more examples, and that are Khan Academy, Badgeville, Classdojo, CodinGame, Corsica, Habitica, Todoist.

Wrap Up

Use your customer feedback to create the best loyalty program for your business.
You can check our feedback tool for more details.

Loyalty programs are usually a combination of different things. We can mention discounts, gifts for purchase or birthday gifts, points for purchased products, extra points.

Loyalty programs encourage the customer to feel more satisfied, but also to spend more.

You can also learn more about loyalty programs for your website in this article from Dreamhost.

Companies recognize the importance of mobile app as compulsory in the loyalty system of their loyal customers.

What about you?

About the author

Iva Mikić is a marketing assistant at Factory.hr – design and development of mobile and web applications. Iva has 3+ years of experience in content marketing and copywriting for one of the most student influential Croatian news portals. When she’s not writing, she loves to read books connected with marketing, writing tips, and economy.

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(Video) 5 Ways Successful Loyalty Programs Stand Out [Customer Loyalty Minutes]

FAQs

What is customer loyalty and loyalty program? ›

What are customer loyalty programs? A customer loyalty program is a system where a business offers rewards to its customers who make frequent purchases. From a business perspective, it's a tactic used to encourage customers to repeatedly buy from your business.

What are the five criteria for a successful loyalty program? ›

These five attributes seem to be in common among successful loyalty programs
  • Simplicity. Customers are shielded from the program's complexity. ...
  • Global. ...
  • Connected to CLV. ...
  • Relevant rewards. ...
  • Data: Loyalty programs should provide valuable data that enable you to improve your marketing mix.

What is a loyalty program in ecommerce? ›

An ecommerce loyalty program is a marketing strategy developed by ecommerce stores to nurture and reward their best customers. Membership may be paid or free. And when customers join, they're given special deals, discounts, and rewards for engaging with the brand and buying products.

What is loyalty and example? ›

noun, plural loy·al·ties. the state or quality of being loyal; faithfulness to commitments or obligations. faithful adherence to a sovereign, government, leader, cause, etc. an example or instance of faithfulness, adherence, or the like: a man with fierce loyalties.

What are the 4 types of loyalty status? ›

4 types of loyalty programs and their benefits
  • Tiered loyalty program. Tiered loyalty programs separate benefits into different levels, with more rewards offered to customers in higher program tiers. ...
  • Subscription-based loyalty program. ...
  • Value-based loyalty program. ...
  • Points-based loyalty program.
19 Aug 2022

How do you create a successful customer loyalty program? ›

Steps to develop a customer loyalty program
  1. Study your current customers. Here are some questions to ask about each customer: ...
  2. Prepare your customer loyalty program. ...
  3. Set goals, and measure them with a CRM. ...
  4. Set a budget. ...
  5. Decide which customers to target. ...
  6. Choose tactics that will encourage client loyalty.

What are the 6 stages of customer loyalty? ›

They are: suspect, prospect, first-time customer, repeat customer, client and advocate.

How do you attract customers to your loyalty program? ›

How to market a loyalty program effectively
  1. Encourage employees to promote the program. ...
  2. Promote the program to existing customers. ...
  3. Offer sign-up incentives. ...
  4. Use existing marketing assets to build awareness. ...
  5. Use social media to drive engagement. ...
  6. Use mobile apps to drive engagement. ...
  7. Incentivize customers to refer others.
4 Aug 2022

Why is customer loyalty important in ecommerce? ›

Retaining customers is less expensive than attracting new customers, and to retain customers retailers must give them reasons to be loyal. A study from Harvard Business School showed that an increase in customer retention rates of 5% can increase profits by 25–95%.

How do I create a loyalty program in ecommerce? ›

  1. Know the Success Factors. Naturally, the first strategy is to know and major on the factors that influence brand loyalty itself. ...
  2. Eliminate the Loyalty Killers. ...
  3. Brand Your Program. ...
  4. Build a Community. ...
  5. Invite Before, During & After. ...
  6. Put the Offer Front and Center. ...
  7. Communicate the Benefits Clearly. ...
  8. Make Redemption “Crazy Easy”
16 Aug 2018

Why is e loyalty important? ›

It is also important to focus your resources on online loyalty marketing because it enables you to widen your reach. You're able to build trust and attract new shoppers who aren't only close by – your market to sell becomes larger. You can also look to capitalize on the social element of online retail.

Who benefits from loyalty programs? ›

Loyalty programs not only give customers perks and benefits, but also build an emotional connection between brands and shoppers. This connection is what keeps customers coming back time and time again. In fact, 78% of consumers are more likely to buy from a brand with a loyalty program.

How do you explain a loyalty program? ›

What Is a Loyalty Program? Loyalty programs, sponsored by retailers and other businesses, offer rewards, discounts, and other special incentives as a way to attract and retain customers. They are designed to encourage repeat business, offering people a reward for store/brand loyalty (hence the name).

What type of marketing is loyalty program? ›

Loyalty marketing is a marketing strategy where companies offer rewards, perks, and incentives to customers, in order to build trust, inspire customer loyalty, and increase customer retention. Loyalty marketing programs are an important tool for businesses today as they attempt to stand out in a saturated market.

How many types of loyalty programs are there? ›

Offering perks and incentives to loyal customers can be an effective method for improving customer retention. Learn about the different types of loyalty programs and how they can help you get repeat customers.

What was the first loyalty program? ›

19th Century

UK's green shield stamps were the first known loyalty program 'cards' and were awarded by the S&H Company to its customers after every purchase at the checkout counter of their department stores.

What are the types of loyalty? ›

Our experiences are perfect illustrations of the two primary types of loyalty in the world: transactional loyalty, and emotional loyalty.

What is an example of loyalty in the workplace? ›

Referrals. When an employee feels loyalty to a company, she takes pride in the company's product and the company itself. Loyal employees create customer referrals by encouraging friends and family members to purchase your product or service. They also provide referrals for qualified employment candidates.

What is loyalty Short answer? ›

loyalty, general term that signifies a person's devotion or sentiment of attachment to a particular object, which may be another person or group of persons, an ideal, a duty, or a cause.

What is a good sentence for loyalty? ›

How to use Loyalty in a sentence. I will decide for myself where his loyalty is. The Malays are an intensely aristocratic people, and show a marvellous loyalty to their rajas and chiefs. He had intended to demand her armies, her loyalty, her oath of non-interference in his plans.

What are the 5 types of customer value? ›

Customer value can be seen as the difference between a customer's perceived benefits and the perceived costs. Perceived benefits can be derived from five value sources: functional, social, emotional, epistemic, and conditional.

What are the 10 types of customers? ›

The 10 types of customers
  • Disinterested. They don't want what you are providing. ...
  • Detached. You won these customers, but they lack loyalty. ...
  • Delighted. ...
  • Devoted. ...
  • Disappointed. ...
  • Disaffected. ...
  • Dormant. ...
  • Draining.
1 Jun 2014

What are 3 ways we create loyal customers? ›

How to build customer loyalty
  • Communicate your values.
  • Provide exceptional customer service.
  • Activate loyalists to help spread the word.
  • Show your appreciation with a loyalty program.
  • Connect in a deeper way.
  • Ask for feedback.
  • Continually improve.
17 Apr 2020

What are the 5 core principles of a successful customer? ›

  • Introduction. "Customer success" is a relatively new idea and term. ...
  • Listen. This one is extremely important to product design. ...
  • Value. After you listen—truly listen—to what your customers are saying, you need to then value what they are saying. ...
  • Communicate. ...
  • Transparency. ...
  • Treat Everyone Like Someone. ...
  • Conclusion.
8 Jul 2020

What are the 5 keys to fully know customers? ›

Understanding the customer journey
  • 1) Building the business case. ...
  • 2) Identifying the channels. ...
  • 3) Acquiring the data. ...
  • 4) Joining the dots. ...
  • 5) Measuring effectiveness. ...
  • Non-existent. ...
  • Beginner. ...
  • Intermediate.
31 Mar 2017

What are the 7 types of customer relation? ›

Types of Customer Relationships
  • Transactional. This means there is no real relationship between the company and the customer. ...
  • Long-term. ...
  • Personal assistance. ...
  • Dedicated personal assistance. ...
  • Self-service. ...
  • Automated services. ...
  • Communities. ...
  • Co-creation.

What are 4 ways to attract customers? ›

Every small business owner wants to attract new customers. Here are 10 time-tested ways to help you bring in “new blood.”
  • Ask for referrals. ...
  • Network. ...
  • Offer discounts and incentives for new customers only. ...
  • Re-contact old customers. ...
  • Improve your website. ...
  • Partner with complementary businesses. ...
  • Promote your expertise.
6 Apr 2017

How do you keep customers happy? ›

How to keep your customers happy
  1. Listen to them. ...
  2. Know your industry better than anyone. ...
  3. Reward loyal customers. ...
  4. Create ongoing, engaging content. ...
  5. Be transparent. ...
  6. Respond promptly to feedback. ...
  7. Commit to innovation. ...
  8. Anticipate their needs.

Why is loyalty important to success? ›

It is a vital ingredient to business success. Without loyal customers, your business will fail to grow and without loyal employees, your business will falter. You need people to trust what you have to say; believe in what you offer; and follow your lead. Developing a loyal following is never easy.

Why loyalty is the key to success? ›

Customer loyalty is the long-term key to business success, because satisfied customers not only tend to buy services and products again, but also to recommend the company to others. Recommendation is ultimately another important consequence that restarts the cycle of satisfied customers.

How does customer loyalty affect sales? ›

Loyal customers return to brands and spend 31% more than new customers. 46% of loyal customers are likely to keep purchasing from a brand after a negative experience. Even a 5% increase in customer retention results in a 25% increase in profit.

What are the factors of a successful e commerce loyalty program? ›

What Are the eCommerce Loyalty Programs?
  • A redefined buying process, to make online shopping feel seamless.
  • Incentivized customer profiling, to generate richer data and boosts other marketing activities, such as personalization.
  • Experiential rewards and VIP benefits, to increase overall customer lifetime value.
12 Jan 2022

What are the five benefits of e commerce? ›

Understanding the advantages of ecommerce
  • Faster buying process.
  • Store and product listing creation.
  • Cost reduction.
  • Affordable advertising and marketing.
  • Flexibility for customers.
  • No reach limitations.
  • Product and price comparison.
  • Faster response to buyer/market demands.

What are the 10 benefits of e business? ›

10 Key Benefits Of Ecommerce For Your Business
  • Low costs. A significant advantage of ecommerce is that launching an online store is much less costly than opening a physical store. ...
  • Speed & Flexibility. ...
  • Faster Buying Process. ...
  • Product Catalogue. ...
  • Wider Customer Base. ...
  • Customer Data Insights. ...
  • Scalability. ...
  • Reviews & Ratings.

What makes loyal customers more profitable? ›

Customer loyalty increases the profits by encouraging repeat business, reducing the operating costs for a business, establishing a favorable price premium, and by generating referrals. To be sure, it is important for businesses to find new customers.

What customer loyalty programs are used in hospitality? ›

There are many different types of customer loyalty marketing programs for all types of businesses. But three main types appeal especially to hospitality businesses. These include the Simple Point System, Punch Cards and Partnerships.

What are the most commonly used loyalty programs in the US? ›

Top 5 loyalty programs in the USA
  • 1.Sephora. Sephora utilises a tiered loyalty system called 'Beauty Insider' program where one loyalty point is received for every dollar that is spent in store, or online. ...
  • 2.Starbucks. ...
  • 3.Amazon Prime. ...
  • 4.Walgreens. ...
  • 5.Target.
4 Jul 2018

What methods is effective in promoting customer loyalty? ›

24 Ways to Build & Maintain Customer Loyalty
  • Offer Discounts. ...
  • Reward Customers. ...
  • Promote Your Rewards Program. ...
  • Encourage Referrals. ...
  • Create a Point System. ...
  • Partner with Another Company. ...
  • Set Up a Subscription Service. ...
  • Ask for Feedback.

Why loyalty program is important? ›

Loyalty programs drive customer retention, which can help organizations generate revenue, increase referrals and achieve overall growth. Organizations typically generate most of their revenue from existing customers, which requires less overhead than revenue from new customers.

What do customers want from loyalty programs? ›

While many customers see loyalty programs as savings, they also want to feel special and have a memorable experience. 94% of customers will take advantage of exclusive offers such as VIP access. Exclusivity makes loyalty programs more attractive, attractive, and desirable.

What are the benefits of loyalty programs for customers? ›

Customer loyalty matters because repeat customers spend more on each transaction. Loyal customers are more likely to repurchase, refer more, and try a new offering. Loyalty programs are a proven incentive to make customers choose you over competitors and bring them back to shop frequently.

What is customer loyalty strategy? ›

Customer loyalty defined

Loyalty is the byproduct of a customer's positive experience with you and works to create trust. Loyal customers. Purchase repeatedly. Use what they purchase. Interact with you through a variety of different channels.

How do you keep trust and loyalty to your customer? ›

Here are 5 tips you can start with:
  1. Encourage your customers to leave reviews. Encourage your visitors and customers to leave reviews about your product and service. ...
  2. Avoid shortcuts and clickbait tactics. ...
  3. Don't remove all negative feedback. ...
  4. Treat your customers as you would a friend. ...
  5. Offer loyalty programs.

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