5 Best customer loyalty programs (And e-commerce loyalty program examples) (2023)

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:

5 Best customer loyalty programs (And e-commerce loyalty program examples) (1)

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

5 Best customer loyalty programs (And e-commerce loyalty program examples) (2)

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) Restaurant Loyalty Programs | Benefits, Options, and How It Works

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

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.

FAQs

What is an example of a customer loyalty program? ›

The most common example of a paid loyalty program is Amazon Prime. While it seems like a hard model to mimic, paid loyalty can suit many different business models.

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 types of customer loyalty? ›

Types of Customer Loyalty Programs
  • Point-based loyalty program.
  • Tiered loyalty program.
  • Paid loyalty program.
  • Value-based loyalty program.
  • Coalition loyalty program.
  • Game-based loyalty program.
1 Dec 2021

Does Amazon have a customer loyalty program? ›

With Amazon loyalty rewards, the reward/gift options are unlimited. Brands get to choose from a wide range of products and select ones that is relevant to their brand and also appeals to their audience. Customers also trust Amazon as a brand.

Does Apple have a loyalty program? ›

With an Apple Wallet loyalty cards program, you can create offerings and perks that engage your customer and make shopping with your brand a rewarding habit.

How does Starbucks loyalty program work? ›

Earn 1 Star per $1 spent when you scan your member barcode in the app, then pay with cash, credit/debit cards or mobile wallets at participating stores. You can also earn 1 Star per $1 spent when you link a payment method and pay directly through the app.

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 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 is loyalty program in eCommerce? ›

The eCommerce loyalty platforms are the best way to get repeat purchases from your online store visitors or attract new customers. After each interaction, they can be rewarded with discounts, cash back, freebies, coupons, or gift cards. Profiling your customers.

What are the 6 stages of customer loyalty? ›

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

Why is Starbucks rewards so successful? ›

Offers are what gives Starbucks the advantage. Starbucks knows your purchasing habits based on behavioral segmentation; they then create personalized offers and present them to consumers in an engaging way through gamification to receive a personalized reward.

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 the 7 types of customers? ›

What Types of Customers Do You Serve?
  • Lookers. Some visitors are “just looking.” They're not after anything in particular. ...
  • Bargain Hunters. Some shoppers have heard you're having a sale. ...
  • Buyers. Some people are there on a mission. ...
  • Researchers. Some are researching. ...
  • New Customers. ...
  • Dissatisfied Customers. ...
  • Loyal Customers.
19 Aug 2021

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

Does Walmart have a customer loyalty program? ›

Walmart Rewards is a new and easy way for Walmart+ members to earn additional savings toward future Walmart purchases. Let's say after a few shopping trips or online orders, a member has accumulated $10 in Walmart Rewards. When they apply those savings at checkout, what was previously a $25 basket now only costs $15.

How can Amazon improve customer loyalty? ›

Make Your Customers Feel Valued

For instance, offer discounts exclusively for subscribers or free giveaways for loyal members. Another idea is to run regular special offers for loyal customers, such as letting them be the first to experience new products.

What is Amazon's customer promise? ›

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be Earth's most customer-centric company, Earth's best employer, and Earth's safest place to work.

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 the 5 marketing orientations with examples? ›

Five orientations (philosophical concepts to the marketplace have guided and continue to guide organizational activities:
  • The Production Concept.
  • The Product Concept.
  • The Selling Concept.
  • The Marketing Concept.
  • The Societal Marketing Concept.

Why is Apple customer loyalty? ›

A Brand Built on Innovation

One of Apple's biggest selling points is its unique hardware and software. The main reason they manage to offer products like that is because they focus on innovation. By that, we don't mean they just create products that are new.

Why is Apple's customer service so good? ›

The staff at Apple retail stores are all screened and trained with a great deal of scrutiny before they make it out onto the sales floor to interact with customers. The biggest determining factor for being hired though is how much of an Apple evangelist they are and how well they fit into the team.

What is the most popular loyalty program in Canada? ›

While there are quite a few large loyalty programs in Canada, two of the largest are Air Miles and PC Optimum. Both of these programs are partnered with multiple different companies and allow for a lot of diversity when redeeming and earning points.

What is loyalty program in coffee shop? ›

Most cafes have some kind of loyalty program in place. Regular customers are rewarded with a free coffee or a snack after a certain number of purchases are made at their shop. In the past, cafe managers often marked physical cards with stamps or hole punches in order to keep track of the customer's milestones.

What is the name of Starbucks loyalty program? ›

Welcome level: By registering your Starbucks Card issued in India, you are at the Welcome level of the My Starbucks Rewards™ program and you may receive the following benefits: A free tall size birthday drink (available from the 1st of your birthday month and expires at end of the birthday month).

How many Starbucks are loyal? ›

The Seattle-based brand, the world's largest restaurant company by revenue, shared Tuesday (Aug. 2), along with the announcement of its financial results for the third quarter of 2022, that loyalty program 90-day active membership in the United States rose 13% in the quarter to 27.4 million members.

Does Microsoft have a loyalty program? ›

Microsoft Rewards is a free program that rewards you for doing the stuff you already do every day. Earn points when you search on Bing.com and buy things from the Microsoft Store online and in Windows 10.

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 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.

How does Nike create Customer loyalty? ›

With quality to back it up, the company can charge more for its products than competitors while still making a lot of money. 79% of Nike consumers said the special incentives are a big part of why they stick with the brand. Exclusivity and rewards work well together to make the loyalty scheme ideas work.

Why are loyalty programs popular? ›

Loyalty programs reward repeat customers with exclusive offers and personalized treatment, such as coupons and birthday gift cards, which drive customer retention. Loyal customers often tell their friends and family about the program's special offers, which brings in new referrals.

When did Starbucks launch its loyalty program? ›

After Starbucks Card Rewards made its debut in spring 2008, a Gold loyalty program followed later that year. The programs combined in 2009 to create My Starbucks Rewards, with welcome, green and gold levels. Now integrated within our mobile app, the program is still sweetening the experience for customers.

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

What kind of data loyalty programs collect from customers? ›

Loyalty programs are a great way to collect customer data.

When a user opts into a program, brands can collect detailed information, such as demographic information, interests and location. After a purchase, loyal customers can be offered a chance to participate in a survey in return for additional loyalty points.

What is the #1 driver of customer loyalty? ›

Supplier's Culture: Supplier's culture is most important driver of customer loyalty. In consumer sector this culture means quality and in core sector it can be related to technology.

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

How does ecommerce measure customer loyalty? ›

6 Ecommerce Customer Loyalty Metrics To Track
  1. Repeat Customer Rate. Repeat purchase rate, or repeat customer rate, is a simple metric that can provide powerful insights into customer loyalty. ...
  2. Customer Retention Rate. ...
  3. Ecommerce Churn Rate. ...
  4. Customer Lifetime Value. ...
  5. Net Promoter Score. ...
  6. Loyalty Program Metrics.
25 Aug 2020

What are the 5 customer cycle phases? ›

Customer Lifecycle Stages. As mentioned, the customer lifecycle has five stages: reach, acquisition, conversion, retention, and loyalty. While it's similar to the buyer's journey, the customer lifecycle takes into account the customer's experience, or what happens long after a prospect makes a purchase.

What are the 7 stages of customer journey? ›

Broken down, the customer journey consists of 7 phases; Out of market, trigger, initial brand consideration, active evaluation, purchase decision, experience and loyalty. Let's take a look at each phase (and the customer's mindset) in more detail – starting with the out-of-market phase.

What is a loyalty program example? ›

Fashion brand Lively is an example of a loyalty program that make their most loyal customers feel special. It rewards members with points on their birthday, when they refer a friend and if they follow Lively on social media.

How does Starbucks create value for their customers? ›

Starbucks aims at building customer loyalty through its in-store customer service. A signature retail objective of Starbucks has always been to provide customers with a unique Starbucks Experience. Service training is a key component of the value chain that helps to make its offerings unique.

What is loyalty program in simple words? ›

A loyalty program is a marketing strategy designed to encourage customers to continue to shop at or use the services of a business associated with the program.

What makes a good loyalty program? ›

The best loyalty programs reward customers when they least expect it. While rewarding customers for making a purchase is effective at creating positive reinforcement, it doesn't create a memorable customer experience. Rewarding points on a customer's birthday is an easy way to enhance the customer experience.

What is Marriott's loyalty program called? ›

With more than 7,000 hotels and resorts participating, the Marriott Bonvoy program is the largest hotel loyalty program in the world. Marriott Bonvoy is also known for its popular rewards credit cards, and how easy it is to rack up points for a free stay.

Why do companies use customer loyalty programs? ›

The entire reason a company creates a loyalty program is to improve their customers loyalty. Offering discounts or free products to customers ensures that they will continue to do business with you if they're happy with your products and services.

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