7 Best Customer Loyalty Program Strategies (With Examples)

Did you know that over 83% of consumers say belonging to the right loyalty program makes them buy again. Of course, if applied correctly.

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If you choose the strategy that suits your business strategy the best, you can see  your one-purchase clients turning into super loyal brand enthusiasts. But not every loyalty program equals customer loyalty.

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From exclusive access to products to gamification, in this article, we’ll review different strategic approaches to customer loyalty programs, along with the scenarios in which they work, and demonstrate the real-life success cases. You’ll learn which customer loyalty strategies suit your business model best and can turn it into a customer magnet.

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FYI: Remember that even the best strategy will not work without exceptional loyalty program management. Sign up for a call to learn how to build loyalty through personalized interactions and expert resolution of program inquiries with EverHelp customer support outsourcing. 

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7 types of customer loyalty programs to inspire your strategy
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Here are seven types of loyalty programs that work particularly well across various sectors, along with examples of companies that have implemented them effectively.

1. Points-based programs

Points-based programs are among the most common types of loyalty programs, allowing customers to earn points for purchases that they can redeem for rewards.

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• Pros: Easy to understand, flexible rewards, trackable engagement.
• Cons: Can incentivize low-value activities, potential devaluation of points.‍
• Best for: Retail and eCommerce businesses or any business with high-frequency purchases.

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Example: Starbucks Rewards. Starbucks customers earn points (or "stars") every time they make a purchase, using a mobile app for tracking and redemption. These stars can be exchanged for free items, making the program popular and effective at driving repeat business.

2. Tier-based programs

Tier-based programs create different levels of membership, with each tier offering better rewards and recognition based on the amount the customer spends or the number of points they accumulate.

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• Pros: Increases customer lifetime value, improved brand perception, lead generation success
• Cons: Complex to manage, potential for alienating customers who can’t advance.
• Best for: High-value service or product businesses.

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Example: Delta SkyMiles. Delta’s loyalty program has multiple tiers (Silver, Gold, Platinum, and Diamond), each offering escalating benefits like bonus miles, priority boarding, and complimentary upgrades. This tiered structure encourages customers to increase their engagement with the airline to reach higher tiers.

3. Paid programs

A paid loyalty program provides premium benefits for a fee, creating a sense of exclusivity and offering immediate value.

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• Pros: Immediate value, typically higher engagement from members.
• Cons: Requires ongoing investment in premium benefits to justify the cost.
• Best for: Any business with a high-frequency customer base.

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Example: Amazon Prime. Amazon’s Prime program requires a monthly or annual fee and offers a wide range of benefits, including free shipping, streaming services, and exclusive discounts. The program has been successful in building a loyal customer base as members tend to shop more often than non-members.

4. Value-based programs

These programs enable customers to donate their rewards to causes instead of receiving them directly. They align the brand with social responsibility, making them popular with companies looking to attract a values-oriented customer base.

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• Pros: Builds brand-customer alignment based on shared values, attracts socially conscious customers.
• Cons: May not appeal to all customers, particularly if they don’t share the same values.
• Best for: Companies aligned with particular social causes.

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Example: TOMS Shoes. TOMS operates on a one-for-one model, providing a pair of shoes to someone in need for every pair sold. This approach has helped TOMS to build a loyal customer base that identifies with the brand’s mission and values.

5. Coalition programs

Multiple businesses come together in coalition programs to allow customers to earn and redeem points across a network of partners.

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• Pros: Diverse earning and redemption options, potentially larger customer base through partners.
• Cons: Complex to manage, potential for devaluing the reward system if partners don’t align with the brand.
• Best for: Businesses with aligned customer bases or complementary products.

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Example: The Plenti Program. This was a coalition loyalty program in the U.S. that allowed customers to earn and redeem points across various businesses, from grocery stores to gas stations. The program was a precursor to many similar initiatives across the globe.

6. Gamification programs

Adding elements of games to the loyalty program, such as challenges, leader boards, or badges, which customers collect for certain behaviors or achievements.

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• Pros: High engagement, encourages frequent use, and fun for customers.
• Cons: Resource-intensive to create and maintain, may not resonate with all customers.
• Best for: Businesses catering to a younger demographic or enthusiasts.

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Example: Duolingo. While not a traditional business, Duolingo’s language learning app is an excellent example of gamification applied effectively. Users earn points (or "gems"), maintain streaks for consecutive days of learning, and compete against friends for a spot on leaderboards, making the learning process more engaging and habit-forming.

7. Omnichannel loyalty programs

An omnichannel loyalty program provides customers with a consistent experience across all channels, whether they shop online, in-store, or via mobile. They are designed to meet customers wherever they are and engage with them in a way that’s consistent with their behavior and preferences.

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• Pros: Creates a seamless customer experience, drives engagement across all channels.
• Cons: Requires significant investment in technology and data management.
• Best for: Businesses with a strong online and offline presence, particularly in retail.

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Example: Sephora Beauty Insider. Sephora’s beauty program is an excellent example of omnichannel loyalty in action. Members can earn and redeem points both in-store and online. Sephora also provides a personalized experience across all touchpoints, whether you’re shopping on their website, app, or in-store.

Quick Checklist: Answer These 8 Question To Know How To Create a Loyalty Program

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Here’s a quick checklist so you can ensure your business is ready for creating a loyalty program you choose:

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What is the primary goal of your planned loyalty program? 

Possible answers: Increase customer retention, increase sales, boost customer lifetime value (CLTV), enhance customer engagement, acquire more new loyal customers, increase brand advocacy, increase ROI, etc. For sure, you have a few goals at a time. However, we recommend focusing on one to track the effectiveness of the customer loyalty program precisely.

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What is your value proposition?

Define what makes your brand unique and how the loyalty program adds value to customers. This could be exclusive discounts, personalized recommendations, early access to new products, or other benefits that incentivize participation. Without a strong value proposition, customers won't see the point of joining.

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What are the external motivators you will use to make them join the loyalty program?

Identify what will initially attract customers to join. This could be a welcome bonus, a signup discount, or other introductory offers. Different motivators may work for different programs and target audiences. Discuss this with your sales and marketing teams to understand what resonates with your customer base.

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Who is your target audience for the program? 

Knowing your ideal customer helps tailor the program's benefits and communication to their specific needs and preferences. Are you targeting new customers, high-value customers, specific demographics, or other segments?

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What is your current business ROI?

The answer to this question will help you opt for a program that suits your budget. For instance, if you’re making between $10k and $100k a month, it's worth giving it a try for cashback or points-based loyalty programs. However, if your business's monthly income is less than $10k, you might opt for exclusive access only programs.

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What is the quickest and easiest to implement, considering your current situation? 

Do you have some issues right now, like customer support challenges? Be realistic about your resources and technical capabilities. Opt for a program that can be integrated with your existing systems and implemented efficiently to avoid delays and disruptions.

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What are your competitors doing with loyalty programs? How can you differentiate yourself?

Research your competitors' loyalty programs to understand their strengths and weaknesses. Look for opportunities to offer unique benefits or a more personalized experience to stand out in the market.

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How will you integrate the program with your existing systems?

Consider how the program will connect with your customer database, marketing automation tools, and other relevant systems. Seamless integration ensures smooth operation and data exchange for effective loyalty program management.

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So, Which Customer Loyalty Strategies Are The Best?

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Choosing the "best" loyalty program isn't a one-size-fits-all answer. But by answering the eight key questions we explored, you've gained a roadmap to identify the ideal fit for your unique business goals and audience. Remember, it's not just about offering rewards; it's about creating a compelling customer experience that fosters loyalty and drives sustainable growth.

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Don’t know how to create a loyalty program? Unlock the true potential of your loyalty program with customer support outsourcing. We'll help you navigate the complexities, maximize engagement, and ultimately turn loyal customers into your brand's biggest advocates. Contact EverHelp today for a free consultation. 

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Don't wait. Invest in loyalty that delivers, and start reaping the rewards tomorrow!

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