9 Great Examples of Customer Loyalty
You know the question is coming every time you approach the checkout.
“Are you a member of our rewards program?”
And if you say “no,” you’re going to be asked to sign up then and there.
Customer loyalty programs are everywhere, especially in retail. There’s a good chance you belong to a few. As a matter of fact, the average American adult belongs to around 16 loyalty programs!
Loyalty programs come in all shapes and sizes with all kinds of variations. We’ll tell you what you need to know about them and how they work, and then give you 9 great customer loyalty examples.
By the end, you’ll have the inspiration and tools you need to create an addictive customer loyalty program for your company.
What Is a Loyalty Program?
A customer loyalty program is a marketing strategy that encourages customers to interact with your company’s brand regularly. It can be used to both attract new customers and retain current customers.
By definition, the program is designed to keep people loyal to you. Starting a loyalty program is an easy way to give you an edge over your competitors.
Loyalty programs are growing in popularity and showing no signs of going away. Over 90% of companies have a loyalty program, and 72% of American adults are members of at least one. In all, there are over 3 billion loyalty memberships in the United States alone.
How Do Loyalty Programs Work?
With a loyalty program, a company often uses a point-based system to reward customers for purchases or dollars spent. Once a customer has reached a certain number of purchases or dollars, they can redeem their points for discounts, free products, a reward, or other perks.
The most foundational reason for a loyalty program is to serve customers. It’s a way to say “thank you!” for being a faithful customer.
But coming in a very close second is getting customers online or in the door so they make another purchase. Give someone a free drink and they’re likely to buy a sandwich when they stop in. As a matter of fact, 75% of customers say they are likely to make a purchase after they receive a reward.
Historically, loyalty programs have tracked customer activity with a small plastic card with a barcode. Today, of course, most companies have an app that keeps a record of purchases to make it even easier for customers to sign up and use their points.
Consumers often discover a loyalty program when they subscribe to a company’s newsletter. With a welcome email, they may receive a coupon for 15% off a purchase and then the opportunity to sign up for the program. Ultimately, a loyalty program is about loyalty to your brand. If you don’t have a newsletter, it’s time to start. Otherwise, you’ll miss out on prime opportunities to help customers build a connection to your brand.
9 Great Examples of Customer Loyalty
1. Starbucks Rewards
Starbucks Rewards was perhaps the first loyalty program to exclusively use an app to track points. It’s fitting then that we start with them. Today, almost every company has followed Starbucks and uses an app for their rewards program.
A unique feature of Starbucks’ program is that for customers to earn “stars” (what Starbucks calls their points), they must order and pay through the Starbucks app. Customers earn one star for every dollar they spend on the app and two stars for every dollar loaded onto the app. Customers can start to redeem stars once they hit 25.
Exclusively using an app gives Starbucks a treasure trove of precious customer data. Starbucks knows the preferences, locations, order history, and more of every loyalty member and can use that in future marketing communications.
If your company can create an app for rewards, a program like Starbucks Rewards is a great system. Can’t afford an app? Try a point-of-sale reward system that’s tracked in your computer system.
2. Target Circle
Everyone loves a Target run and it’s even more fun with Target Circle. This loyalty program is also app-based. But customers can also use the phone number connected to their Circle account.
Members earn 1% back when they use Circle or 5% if they pay with their RedCard (Target’s credit card). This money back must be spent at Target, of course. Circle also offers members special deals only available through the app. They also get 5% off any purchase on their birthday.
Forget to use the app or enter a phone number? Members can enter receipts on the app within seven days to get the rewards.
3. Sephora Beauty Insider
France-based beauty retailer Sephora’s Beauty Insider is a popular loyalty program that boasts over 25 million members.
An Insider membership is free. But if customers spend a certain amount each year, they earn better savings and access to certain experiences.
Members earn one loyalty point for every dollar spent. Sephora specializes in offering members flexibility in redeeming points. Members can redeem points for gift cards, discounts, free shipping, samples, events, and even product launches.
Giving your customers plenty of redemption options is important, especially if your products are on the higher end of the spending spectrum, like Sephora.
4. Amazon Prime
Amazon Prime is probably the best-known customer loyalty example in the world. It is a paid membership and for a flat annual fee, members get access to unlimited free two-day shipping, Amazon’s streaming service, Prime Day deals, and more.
Amazon is in stiff competition with other retailers, most notably Walmart. A paid membership helps customers feel an even greater sense of loyalty. And it shows. Amazon Prime members spend twice as much as non-Prime users.
If your market is particularly competitive, in what ways can you distinguish yourself to keep people coming back to you?
5. The North Face XPLR PASS
The North Face XPLR PASS is popular among adventure seekers and was voted one of the best of 2022 by Newsweek.
Like other reward programs, customers accrue one point for every dollar spent. But The North Face allows customers to earn points by referring friends, using their app to do a check-in at a National Park or National Monument, and bringing in a reusable bag when you shop in-store.
Customers can redeem points in numerous ways. Members get access to exclusive deals, limited edition gear, a discounted AllTrails Pro membership, and chances to test unreleased products. They also get to “field test” products to see how they perform. If they aren’t satisfied, they can return it with no questions asked.
You likely can’t match The North Face, but you can offer diverse rewards that cater to a customer’s individual needs and wants.
6. REI Membership
Another outdoor adventure supplier, REI offers a paid co-op membership. But at just $30 for a lifetime (yes, you read that right), it won’t break the bank.
Once customers join, they get 10% back on all purchases, buy and trade in used gear, gain access to curated limited-edition products, get discounts on REI experiences, and more.
You might ask, “What’s with the $30 fee?”
Almost 70% of REI’s co-op profits are reinvested in nonprofits that help provide safe outdoor access for people all over the world. REI also donates $5 for every new member sign-up to the REI Cooperative Action Fund which exists to "support justice, equity, and belonging in the outdoors."
Is there a way your company can “give back,” or offer social impact rewards like REI is doing, through your loyalty program?
7. Marriot Bonvoy
Marriott Bonvoy is the premier hotel/travel loyalty program. This free membership has two big perks: exclusive member rates and a fifth night free. Customers can earn points from hotel stays, activities, and events, using their Bonvoy credit card, or using travel partners. Points can be used on Marriott hotels and resorts, experiences, flights, and more. It’s incredibly flexible.
What’s most unique about Bonvoy is how it leverages partnerships. Points don’t have to be used with Marriott. Of course, you can’t use them with a competitor (like Hilton or Hyatt), but it’s very attractive to be able to spend at Marriot and use points with United Airlines. It gives customers incredible flexibility.
If you’re a small business, it may be risky to emulate Marriott here. On the other hand, it may be worth exploring if there are partnerships that would be mutually beneficial to you and your customers.
8. Goldenrod Pastries Punch Card
Not everyone’s the size of Amazon. Let’s look at a couple of small businesses. Goldenrod Pastries is “an inclusive bakery,” meaning they believe everyone deserves tasty treats. So they work hard to bake pastries that can be enjoyed by as many people as possible no matter their diet.
Their loyalty program is as simple as it gets: a punch card. This is the easiest and sometimes the best place for a small business to start.
You can handle punch cards in a couple of different ways. You can issue a punch every time they visit. After 5 or 6 punches, the customer gets a free treat. This is how Goldenrod’s punch card works.
Another option is to offer a punch for a certain dollar amount spent: for every $10 spent, they get a punch. After a customer spends $50 or $100, they earn a reward. A piece of cake!
A digital punch card is a great way to create a digital connection with your customers too.
Our second small business is Mahabis, a London-based modern footwear company. Their loyalty program is a referral program. A customer can send a 10% off coupon to a friend and they’ll get a 10% off coupon in return. Not only that, but if you sign up for their rewards, you’ll get 15% off your first purchase.
Not only does this help customer retention, but it also empowers your customers to pursue leads for you. This is one of the most effective long-term growth strategies for a business. One study showed that 92% of consumers worldwide trust brand recommendations from their family or friends.
Chances are, you’re closer to Mahabis or Goldenrod than Amazon or Target. Both of their loyalty programs are replicable at any scale. You can do it! But to be effective, people need to know about you. Make sure you have a great SEO plan that will help you rank well on Google to start building your brand loyalty.
Wrapping It Up
A customer loyalty program is designed to create a long-lasting connection between customers and your brand. With nine out of ten companies having these available, it’s a ‘must-have’ if you want to keep up in your corner of the market. Hopefully, the customer loyalty examples we shared will inspire and motivate you to get your loyalty program started ASAP.
At Stamp Me, we provide businesses around the world with a highly interactive and intuitive mobile rewards app to get your loyalty program up and running. We can help you.
Get in touch with a member of our professional team to help you boost your brand loyalty or invest in our digital loyalty app. We’ll even let you try it on for size for 30-days so you have nothing to lose. Get started today!
Freya Laskowski is is an SEO consultant that helps brands scale their organic traffic with content creation and distribution. She is a quoted contributor in several online publications including Business Insider, Fox Business, Yahoo Finance, and the Huffington Post. She also owns CollectingCents- a personal finance blog that she grew from the ground up. You can reach out to her at email@example.com.
Stamp Me provides loyalty solutions to businesses large and small, from our own Stamp Me Loyalty App to fully customised loyalty and rewards programs for enterprises and brands.
Contact us if you would like to discuss a loyalty or rewards solution for your business or brand.