Did you know that it can cost 5-25x more to acquire a new customer than to keep an existing one? In other words, customer loyalty is essential to the success of your business. But how do you actually keep customers coming back for more? Create a customer loyalty program!
We’ve covered how to build an effective customer loyalty program on the blog before. If you haven’t read it yet, we encourage you to check it out.
Today, we want to show you six customer loyalty program examples you can use to inspire your own. Keep reading to learn why these programs are so effective and specific tips you can use to supercharge your loyalty efforts.
What’s a Customer Loyalty Program?
A customer loyalty program is a marketing strategy that helps stimulate customer buying habits via predetermined rewards. A few popular examples include:
- The Point System: Customers receive points for spending money with a brand. Points can then be redeemed to make future purchases.
- The Paid Program: Customers pay a recurring fee to access membership perks like discount offers, first-access to new products, and more.
- The Punch Card: Customer purchases are tracked via a punch card. When a certain number of purchases are made, customers receive a free product.
Loyalty programs are important because they help boost customer retention, reduce marketing costs, and increase company profits. In the next section, we’ll look at six specific customer loyalty program examples you can use as inspiration.
Customer Loyalty Program Examples
The customer loyalty program examples below are the creme of the crop. We encourage you to study them and use the insights to build more loyal customers for your company.
1. Sephora Beauty Insider
The beauty industry is known for its stand-out customer loyalty programs and Sephora Beauty Insider is definitely one of the best in the business.
The program boasts millions of members who earn one point for every dollar they spend at Sephora. Members are then grouped into different tiers based on spending thresholds and each ascending tier gives them access to better perks.
While the traditional point system is nothing new, Sephora spices things up by allowing its members to spend their points in innovative and exciting ways.
For example, Sephora hosts the Rewards Bazaar every Tuesday and Thursday, which features limited-edition, member-only bargains that are available on a first come/first serve basis. This encourages Beauty Insiders to check the site multiple times a week to see if they can snag an amazing deal with their points.
But, of course, members can shop outside of the Rewards Bazaar, too, and spend their points on regular products, gift cards, etc. This level of flexibility is loved by Beauty Insiders.
Fortunately, point systems like the one Sephors uses are easy to set up. You just have to get creative and offer your customers something they can’t get anywhere else.
2. Starbucks Rewards
When Starbucks first Starbucks Rewards via the Starbucks app, it was revolutionary — no one had launched a customer loyalty program like that before. These days, apps of this kind are commonplace. But Starbucks still capitalizes on the idea in a big way.
First, the app makes it very easy for customers to remain loyal. After all, they don’t have to remember to bring punch cards or input a phone number to receive points (or in this case, stars.) They simply make orders with the phone that’s already in their pockets.
Every dollar spent at Starbucks results in two stars, which can be redeemed for drink discounts. The coffee giant also offers “Double Star Days” and free beverage coupons on birthdays to keep customers engaged and spending.
But the app isn’t just great for coffee lovers. Starbucks benefits from the incredible amount of customer data it generates. Most popular drinks, customer lifetime value, popular locations, and more are easy to determine by assessing app details.
If your business has the option, consider running your customer loyalty program through a mobile app like Starbucks does.
3. REI Co-op
The REI Co-op is one of the best customer loyalty program examples. But to truly understand it, we have to go back in time…
REI started as a small, Seattle-area co-op in 1938. 23 local adventurers pooled their money to buy quality hiking products in larger batches, thus increasing their spending power. The co-op then began selling goods in local stores and the rest, as they say, is history.
The co-op is still going strong today. It now has 19 million lifetime members who join for a one-time fee of $20 and enjoy 10% off all purchase, access to amazing deals via REI’s garage sales, and even discounted adventure experiences.
REI’s loyalty program is a fantastic example of putting the customer first and delivering value. At the end of the day, if your customers don’t care about your loyalty program, they won’t join and your company won’t benefit from it.
Do your best to design a program that your audience will LOVE. If you can do that, your organization will grow because customers will be encouraged to make repeat purchases.
4. Virgin Atlantic Flying Club
Just about every airline has a way for customers to earn points (often called “miles”) they can spend on future flights. But very few airlines, if any, go above and beyond like Virgin Atlantic.
The Virgin Atlantic Flying Club allows customers to earn points by booking flights, shopping at Virgin partners, or making everyday purchases via the Virgin Atlantic credit card. They can then redeem said points for discounts on airfare, seat upgrades, and other trip perks.
Sounds pretty great, right? But that’s not all this airline has cooked up for its customers…
Virgin Atlantic also groups customers into one of three tiers: Red, Silver, and Gold. Each tier offers increasingly amazing rewards. For example, the Gold tier (the highest tier available) offers a 60% additional points bonus on flights, free seat selection, and much more. To upgrade tiers, Virgin Atlantic customers simply need to spend more money with the airline.
When it comes to customer loyalty program examples, very few can rival Virgin’s in terms of straightforwardness and partnership opportunities.
When crafting your own program, make sure it’s easy for customers to understand. Also, consider connecting with other companies to offer your audience the most value you can.
5. The North Face VIPeak
Like Sephora’s Beauty Insider program, VIPeak by The North Face gives customers a wide variety of ways to spend the points they earn. For instance, customers can choose to put their points towards new gear or amazing outdoor experiences like mountain climbing in Nepal.
VIPeak also gives customers multiple ways to earn points, which is another great feature of this program. Sure, customers earn when they spend money on The North Face gear — 10 points for every dollar spent, in fact. But they can also get points by downloading the North Face app, checking in to specific locations, and attending The North Face events.
(Note: It seems that The North Face has suspended it’s in-person point-accumulating options in light of the COVID-19 pandemic. Hopefully they’ll bring them back when it passes!)
VIPeak is one of the best customer loyalty program examples because it offers more than the average discount. It speaks directly to customers and the lifestyles they like to lead. When designing your own program, we encourage you to do the same.
6. Amazon Prime
You might not be familiar with the customer loyalty program examples above, but you’ve (almost) definitely heard of this one. Heck, you probably even pay for it yourself! But if not, here’s a quick rundown…
In exchange for an annual fee of $119 or a monthly rate of $12.99, Amazon Prime members get free two-day shipping on millions of items, access to special Prime Day sales, and the ability to stream movies and TV shows on Amazon’s popular Netflix alternative.
The free shipping alone would make Amazon Prime worth it to most members. But by adding other perks, Amazon is able to offer amazing value to its customers and help differentiate itself from its many competitors.
Plus, Amazon makes A LOT more money via the program. Prime members spend an average of $1,400 on Amazon, while non-Prime members spend an average of just $600.
Paid memberships won’t work for every brand. But if you can offer your customers extraordinary value, you might be able to charge them on a monthly or annual basis for access, which can be an amazing business strategy.
Build Your Own Customer Loyalty Program
Customer loyalty programs boost retention, lower marketing costs, and improve bottom lines. The trick is crafting a program that actually clicks with your target audience…
Fortunately, you don’t have to start at ground zero. You can look to other companies (like the six customer loyalty program examples listed in this article) who enjoy the benefits of extremely loyal customers and use their insights to build your own program. Good luck!