16 customer loyalty programmes of 2024 + how they work

Sometimes, you need to give customers a reason to keep buying from you. To build customer loyalty, some businesses will offer special discounts to customers who make regular purchases. This strategy is known as a loyalty programme.

If executed well and with the customer at the centre, loyalty programmes can help your customers feel good about purchasing from you. There are many different types of customer loyalty programmes you can use to increase customer engagement. What you choose depends on your mission, your product and your goals for the reward programme.

Read on to learn how and why customer loyalty programmes work, plus see examples from popular brands.

What are customer loyalty programmes?

A customer loyalty programme (or rewards programme) is a customer retention strategy that motivates customers to continue buying from you instead of competitors.

Benefits of a customer loyalty programme

Like personal relationships, customer relationships are successful when both parties feel they’re getting something beneficial from the relationship. Customers give you their support when they buy from you and loyalty rewards like discounts and freebies ensure they get something in return.

According to Accenture, more than 90% of companies have some sort of loyalty programme, so it’s advantageous to implement one if you haven’t already.

Here are several benefits of a customer loyalty programme:

How do loyalty programmes work?

Loyalty programmes work by offering customers incentives to purchase from or engage with the company. The aim is to retain customers, increase customer lifetime value and show customer appreciation.

Although each type of loyalty programme works differently, here’s the general process:

• Customer makes a purchase or engages with a company
• Company prompts the customer to sign up for its loyalty programme
• Customer signs up using their information (phone number, email, etc.)
• Customer receives rewards for purchases or through promotional materials

Customers can redeem points for discounts or gifts in a points programme, whereas subscription programmes reward customers when they subscribe. Many businesses use a combination of different types of customer loyalty programmes. Learn more about each type and how they work below.

Types of customer loyalty programmes

There are several types of customer loyalty programmes that your business can take advantage of:

Points programmes

Points programmes are among the most popular types of customer loyalty programmes. They’re useful because points are easy to earn and redeem. Customers can redeem points for:

• Credit towards their next purchase
• Discounted services
• Giveaways

Customers can track points with a loyalty card, online account or mobile app.

Because so many brands employ a points programme, it’s a recognisable format for customers – they understand how to take advantage of it and enjoy the experience.

Tier-based programmes

Tier programmes are like video games: once they complete one level of spending, customers can unlock the next level for access to additional benefits or perks.

For example, you could have a tier of “diamond level” clients. Customers at this level could earn exclusive pricing for your most expensive products and services.

This will motivate customers in lower tiers to make an effort to reach the next level of spending. The more exclusive the reward, the greater the customer appeal.

Mission-based programmes

Not every rewards programme focuses on tiers and discount codes. If your company is highly mission-driven, you may want to try a customer loyalty programme with a cause.

Aligning with a mission allows you to build customer engagement and drive repeat purchases through your shared values. These programmes can be more effective when you partner with a non-profit organisation that has a strong connection to your company’s mission.

Spend-based programmes

Spend-based customer rewards programmes allow businesses to recognise high-spend customers. Airlines, in particular, are transitioning from points programmes to spend-based systems. It allows them to engage deeper with travellers who pay more for fewer flights.

Gaming programmes

Gaming programmes inject an element of fun into the act of making a purchase. This type of programme incorporates a simple game – like spin to win – that customers play to obtain a prize. It can include a discount or free item when they purchase a product or service.

Free perks programmes

Who doesn’t love gifts? Free perks programmes give loyal customers complimentary products and services. In many free perks programmes, shoppers can redeem points for things like free food or a free make-up sample.

Subscription programmes

A subscription programme, also known as a premium loyalty programme, is where customers subscribe and pay an upfront fee for a product or a service and receive rewards in return. These rewards can be redeemed and used for future purchases.

Community programmes

Community customer loyalty programmes foster customer engagement and can spring from an existing loyalty programme. For example, online clubs and groups may form within a loyalty programme, such as Sephora’s Beauty Insider Community.

Brands with this type of programme can allow customers to post questions, share photos of themselves wearing a product and interact with one another.

Refer-a-friend programmes

Referral programmes reward customers for referring their friends and family. This word-of-mouth strategy can help turn loyal buyers into brand advocates – and on top of that, the referral may refer someone else in the future.

Referral programmes may also reduce your customer acquisition cost because your customers will be doing the work for you.

Paid programmes

A paid loyalty programme requires customers to pay a fee for loyalty perks and provides instant, ongoing benefits for participating. For example, customers can sign up for a £5 monthly membership that gives them access to 50% off their purchases every month.

Cashback programmes

Cashback rewards programmes give customers cashback or money to spend with your business. This helps customers feel that, even though they’re spending money, they’re also getting something in return. This type of loyalty programme is common among financial companies.

16 successful customer loyalty programme examples

Looking to implement a loyalty programme but need some inspiration first? Check out these examples of 16 innovative customer loyalty programmes from well-known brands such as Marriott, Sephora, Amazon and more below.

1. Marriott

Marriott’s rewards programme, Marriott Bonvoy Benefits, allows members to redeem points for free hotel nights, dining and other experiences. They can also earn points with car rentals and flights, share points with friends and family, and get free Wi-Fi and special rates.

2. DSW

DSW’s customer loyalty tier programme helps create a vibe of exclusivity. The tiers are based on consumer buying behaviour and include rewards like free delivery and extra points for donating unwanted shoes. Tiers include:

• Club: the initial tier where all customers start
• Gold: achieved when the customer spends $200 on eligible purchases*
• Elite: achieved when the customer spends $500 or more on eligible purchases*

*Note: eligible purchases vary based on a business’ specifications but this added parameter can help drive customers to a desired product or category. In DSW’s case, eligible purchases are “purchases of DSW products such as footwear, handbags and accessories.”

3. Azerbaijan Airlines

Azerbaijan Airlines, like many other airlines, utilises a spend-based programme that rewards frequent flyers with travel points based on each ticket’s base fare. Any travellers who reach elite status sooner get perks like complimentary lounge access, early boarding and additional checked baggage allowances.

This kind of programme benefits business travellers who pay more money for last-minute flights to their next meeting or scheduled event.

4. Grubhub

Grubhub’s loyalty programme, Grubhub Points, allows customers to redeem ongoing offers, which can total more than $400 in free food at any given time. For every dollar spent, customers can earn 20 points.

The programme helps its restaurant partners promote their restaurants on the app by introducing customers to places they haven’t tried before.

5. Dollar Shave Club

Dollar Shave Club offers a subscription-based programme – without membership fees. You become a member simply by making your first purchase. Instead of spending more to earn points, members automatically have access to new and exclusive products, personalised recommendations, member-only magazines and free delivery.

6. Sephora

Sephora’s Beauty Insider programme gives customers a choice of gifts based on a points system. It also offers something unique: an online community.

The Beauty Insider Community is an online community where customers can ask questions, share their looks and swap tips.

7. Bank of America

Bank of America’s Preferred Rewards provides cashback rewards to customers when they use their debit or credit card to make purchases at certain national retailers, restaurants and other companies.

According to John Sellers, Rewards Executive at Bank of America, some of the benefits of the programme include:

• Higher customer satisfaction – 8 out of 10 programme participants are likely to recommend Bank of America to friends and family
• Greater customer retention
• Increased customer spending, leading to higher profits

8. Freshly

Freshly’s referral programme gives an existing customer a $30 discount for every new customer they refer, while referred customers receive 12 free meals (totalling $120).

9. DoorDash

With DoorDash’s paid programme, customers can become DashPass members for a small monthly fee. In exchange, they get free delivery for a wide range of restaurants, so customers who use the app often ultimately save on orders.

The takeaway? Paid customer loyalty programmes work when the value outweighs the cost.

10. Amazon Prime

Amazon Prime is a great example of a paid programme: for a set annual fee, Prime members get free next-day delivery. The membership also includes other perks, such as special deals on Prime Day and access to Amazon’s streaming service.

11. Ben & Jerry’s

Ben & Jerry’s mission-based programme creates ice cream flavours with themes of social justice. For every purchase of these themed tubs, the company will donate profits to charities that support animals, the environment, social programmes and other good causes.

Before starting this type of programme, ensure your company values and mission are aligned. Then, identify organisations or causes that would resonate with your customer base.

12. The North Face

The North Face uses a points programme to reward its customers. By joining the XPLR Pass, customers receive 10% off their first online order, access to exclusive gear, birthday gifts, specialised customer service and more.

Shoppers earn points for every pound they spend at the retailer, plus extra points for referring a friend, downloading the North Face app and checking in at a national park or monument.

13. Panera Bread

Panera’s free perks programme, MyPanera, gives customers an easy way to enjoy free items, free delivery and personalised rewards. All customers need to do is download the Panera app, sign up for texts and subscribe to the restaurant’s email newsletter.

Customers can also join the Unlimited Sip Club subscription for unlimited drinks. To sign up for this, create a MyPanera account, enter your payment information and select a store near you.

14. Starbucks

Starbucks is known for its gaming programme that incentivises customers to make a purchase. For example, customers earn two “stars” for every pound spent, rewarding those who spend more money during shorter periods. However, it doesn’t stop with stars.

The coffee giant also introduced a tier component that expands the points programme, allowing customers to redeem their stars for items beyond cups of coffee, like an extra espresso shot or free merchandise.

Customers play the game on a mobile app, which Starbucks also uses to notify customers of opportunities to earn extra points.

15. The Body Shop

The Body Shop’s Love Your Body Club is a mission-based loyalty programme that gives customers the option to donate their rewards to charitable organisations.

For every 100 points earned, shoppers get £10 to spend on products or donate to a charitable partner, such as:

• Black Lives Matter
• No More
• World Land Trust
• Born Free USA
• Wires

16. Expedia

With Expedia Rewards, travellers can save around $35 per hotel or flight booking through points earned. The three-tier programme allows you to earn more perks and rewards depending on how often you travel:

• Blue tier: gain access to savings that include an extra 10% off hotels and receive double points when you book through the Expedia app.
• Silver tier: get two points for every £1 spent, plus free breakfast and spa credits after earning 10 Trip Elements.
• Gold tier: after earning 25 Trip Elements, you get 3 points for every £1 spent as well as late checkout and free room upgrades

*Note: Trip Elements refer to points you earn for each booking you make on Expedia.

How to create a customer loyalty programme

Now that you’ve learned about the different customer loyalty programmes and seen examples from popular businesses, you’re better equipped to implement one of your own. Here’s how to create a winning customer loyalty programme in seven steps:

• Figure out your goals

The first step in developing a customer loyalty programme is to determine what you want to get out of it. This includes setting goals, such as the type of shopping behaviour you want to promote:

• Newsletter signups
• Referrals
• Leaving customer reviews
• Purchasing a specific product
• Repeat purchases/visits

Once you identify the areas of your business that you want to target, you’ll be able to decide on your programme type.

• Choose the type of reward

Next, pick the reward you want to offer customers. Bear in mind that you’ll want to make your reward desirable enough to keep customers interested, encourage repeat purchases and foster brand loyalty. Types of rewards can include:

• Gifts with a purchase
• Discounts/discount codes
• Exclusive products and deals

• Select the type of loyalty programme

Choose the type of customer loyalty programme that best aligns with what you decide for steps one and two. The loyalty programme you pick will help you define the benefits you’ll reap and set you up for the next step.

• Decide how you want to run your programme

After you choose the type of programme you want, determine whether you want to run your programme manually or with software.

Running your programme manually would require you to track customer behaviour by hand and reward them based on your structure, e.g. with a stamp card. It’s much easier to track this data using automated software, especially one that integrates with other tools, such as your POS system.

Some customer loyalty programme software include:

• Annex Cloud
• Bazaarvoice
• Kangaroo
• Open Loyalty
• Zinrelo

• Infuse your branding

Inject your brand into all aspects of your customer loyalty programme and personalise it as much as you can. This includes:

• Merchandise
• Messaging (in email newsletters, texts, posters, etc.)
• Interfaces (such as your website and/or rewards tracker)
• Rewards “currency” (you can get creative with what you call “points” – make it unique to your brand)

• Market your customer loyalty programme

Once your customer loyalty programme is in place, spread the word to attract your first rewards members. Consider doing this through:

• Text and email campaigns
• Physical signs in your shopfront
• Word of mouth from shop assistants
• Messaging on shop receipts
• Pop-ups or banners on your website

• Observe and modify

Lastly, be sure to monitor how your customer loyalty programme performs and adjust based on what you see and any feedback you receive. You can gather insights from your customer loyalty programme software or calculate the programme participation rate.

The participation rate shows you how many customers are interested in your programme. To calculate this metric, divide your number of loyalty programme members by your total number of customers.

Tips for a successful customer loyalty programme

Here are some helpful tips to keep in mind when creating and implementing your programme.

The best loyalty programmes are customer-centric

Listening to your customers enables you to improve your entire customer experience and build a loyal fan base.

So, listen and pay attention to your audience and let them be your guide as you build out the elements of your customer experience – from your loyalty programme to your customer support.