Modern loyalty programs prioritize practicality, but to succeed, their designers must have visions beyond discounts and freebies, taking the customer experience to a new level. Ongoing brand patronage – a direct benefit of sustainable customer loyalty – underlies customer retention, brand ambassadorship, and robust ROI performance.
Every stakeholder reviews and projects the return they expect from their loyalty program investments, but a purely dollars and cents focus tends to push creativity and innovation to the sidelines. To demonstrate a more holistic approach that integrates with the organizational culture, I discovered six exceptional brand loyalty programs that create a CX competitive advantage with unique offerings and presentations. They are as follows:
- My Bath & Body Works Rewards recognizes loyalty to their beauty, cosmetics, & fragrance brands, serving over 38 million customers.
- Amazon Prime – an iconic retailer: The holding company has almost established “Amazon” as the foremost generic term whenever e-commerce brand distribution enters the picture. As a mainstream online marketer, also into streaming and other ventures, Amazon’s sponsored program rewards 180 million (plus) customers.
- Starbucks Reward Program consolidates the loyalty of over 34 million coffee & beverage retail customers.
- Sephora Beauty Insider, another beauty and cosmetics loyalty program, is in a highly competitive industry, reaching 34 million (+) customers
- Chipotle Rewards – As a leader in the fast-food restaurant arena – shows the way with over 27 million customers in its loyalty program
- World of Hyatt – A national hospitality brand with more than 1,300 hotels and all-inclusive properties in 76 countries across six continents, serving millions of customers (but exact numbers are not public).
They have one thing in common: thinking out of the box to create loyalty that resonates with their audiences. Read on to see how they emotionally and psychographically defined their brands using loyalty strategies as a spearhead.
Example 1: My Bath & Body Works Rewards
Points systems are not new; many companies apply them to gain segment traction. It sounds simple, but the secret to ‘points success” is accumulating enough points for a reward redemption that’s meaningful on the one hand and enhances the brand image on the other. My Bath & Body Works has got the balance just right.
Every purchase earns customers points (that translates to 10 points per dollar spent). One thousand points (i.e., 100 dollars of spending) qualify for a $16.95 product (equivalent to a nearly 17% discount), exceedingly generous under any retail scenario. As the program’s energizer, the points system opens opportunities to such things as member-exclusive special events, limited (or first dibs) product introductions, birthday gifts, and other perks.
One of the primary loyalty program components sustaining the customer experience (CX) on an upbeat trajectory is a digital app that makes points tracking and redemption as easy as counting 1-2-3. For example, a dedicated “Top Rewards Picks” page allows members to check out current hot products and what it takes to acquire them at deep discounts or for free by applying for rewards benefits.
The unique thing about this company’s strategy is that no single aspect stands out as extraordinary. Its massive success relies on highly efficient program management that erases disruptive touchpoints, responding fast and engagingly to questions, complaints, and comments. Finally, glowing reviews streaming through drive the momentum with highlighted exposure, tying a bow around an integrated package that has become legendary in the industry.
Example 2: Amazon Prime
Amazon and its Prime loyalty program is a subscription-based service that members are willing to pay at $139 annually (or $14.99 monthly). Why? Aside from product benefits, every initiative attaches to the Amazon name, driving momentum with a domino effect on everything else that comes with it. It includes:
- Mind-boggling advantages, from same-day/two-day/free no-rush shipping options to scheduled delivery dates for weekly purchases.
- From unlimited streaming videos, music, gaming, TV series, and movies (many Amazon originals) to severely discounted favorite channel access (like HBO Max, Showtime, and Starz) without cable.
- Access to 100 million songs ad-free, a colossal library of ad-free podcasts, thousands of playlists and stations, and free games.
- Prime Reading allows members to borrow books, magazines, and more from the Prime Reading catalog, accessible on Fire tablets, Kindle e-readers, and Kindle iOS and Android reading apps.
- Amazon First Reads ensures free exclusive early access to new book downloading from expert picks. While this is impressive for people who love reading, there’s much more to this brand value club. Consider the following:
The program opens a window to special deals, first access to brand specials, and discounts left, right, and center. For example, Whole Foods Market (owned by Amazon) contributes to members’ savings, including 5% back for those transacting with the Amazon Prime Rewards Visa Card. The same goes for many members who are buying on Amazon.com.
Then there’s a fantastic flexibility program feature – Prime Try Before You Buy – applicable to clothing items (i.e., women’s, men’s, kids’, and baby clothing, shoes, and accessories). Members have a week to try on the items in the comfort of their homes, and they can also get 20% off diapers, baby food, and more through “Subscribe & Save.”
In short, as the far-and-away captain of the e-commerce ship taking retail by storm, loyalists (reaching 200 million in the near future) trust the brand to deliver the best possible pricing and unsurpassed convenience. There are no points or gimmicks to confuse the picture, just exciting value-for-money daily, weekly, and monthly offers.
- They view entering this “Amazon Culture” as bargain value, delivering benefits multiple times the fee.
- Many reviews reflect customer beliefs that the latter can be recovered in one event – Prime Day – actually a two-day shopping extravaganza offering significant discounts on a wide range of products to Amazon Prime members.
If ever there was an outstanding example of people clamoring to join a culture and enjoy a sense of belonging, Amazon Prime is it.
Example 3: Starbucks Rewards
One of America’s favorite pastimes is early morning coffee and coffee breaks at any time. Starbucks outlets are so much more than that, representing centers attracting friends to regularly socialize and spend hours with one’s computer as a welcome remote workstation. Etched into the coffee retailer’s culture are these interludes integrated with lattes, cappuccinos, and designer beverages.
Add Starbucks Rewards, an elaborate points (stars) system that allows customers to elevate membership to Green or Gold (minimum 750 stars) with each purchase on a tiered system (depending on which payment method one uses).
Accumulated stars align with rewards like complimentary beverage and food deals made easier by members-only express order and pick-up advantages. Underlying it all is the Starbucks app that creates seamless, fast, and compelling access to rewards. How? Redeeming points instantly, skipping queues, and getting size upgrades, free customizations, and discounts.
Growing 13% year-over-year, 90-day active Starbucks Rewards members now stand at 34.3 million after fifteen years (registered in late 2023), and the program is the undoubted industry leader. Additional features focus on fun, convenience, and user-friendliness by gaming the CX experience at reward participation touchpoints.
For example, events such as Double Star Days and Bonus Star challenges let members earn 2 X stars for using their Starbucks card. Finally, Starbucks Rewards membership includes free drinks as birthday rewards and perks from Starbucks partners like Delta SkyMiles and Bank of America.
Example 4: Sephora Beauty Insider
The points system underlies many successful programs, but the aura around them counts the most. Sephora’s Beauty Insider program looks similar to My Bath & Body Works (see above) but differs fundamentally. Why? Consider that it begins with one point equal to one dollar and 500 points, delivering a $10 purchase value.
- However, three loyalty tiers kick in from there, aligning with annual customer spend:
- Insider (free to join),
- VIB (minimum spend $350 annually)
- Rouge (minimum spend of $1,000 annually).
- Tiered members’ access to brand introductions, mouthwatering exclusive gifts, and imaginative birthday gift options vary widely, encouraging brand loyalty and repeat purchasing as the gateway to Rouge benefits at the top of the totem pole.
The 34 million members have bought into the program’s value proposition structured around flexibility, creative excitement, and emotional connection, ranking it as one of retail’s best customer loyalty programs. For example, tiered access to beauty classes, birthday gifts, free samples, exclusive collections, first dibs on new products, and community events elevate loyalty recognition, far removed from a discounts-only program.
Finally, the trend of gamifying member involvement hasn’t escaped Sephora. The company’s intermittent Beauty Insider Challenges deliver desirable rewards to contest winners and those completing set tasks.
Example 5: Chipotle Rewards
A review of the best customer rewards programs is complete with a restaurant featured in the lineup. Chipotle Rewards – a web and app-based CX value proposition – offers 100 points for every $10 spent, where 700 points (i.e., a $70 spend) qualifies for a $5.20 purchase discount (e.g., a free meal of double steak or double barbacoa) – equal to 7.4% discount on previous transactions.
Gamification is a massive feature many reward programs have added, and Chipotle is no exception. The company introduced an industry-first opportunity (according to the chain) to earn extra points and collect achievement badges by participating in memorable events. Omnisend research confirms that gamification has contributed up to 74% improved CX.
Who can argue with the numbers (emerging at a recent tally) – over 27 million members? Chipotle’s executive management underlines that the rewards program is the principal driver behind the organization’s shift to digital sales. Chief Marketing Officer Chris Brandt says, “Offering new ways to engage with Chipotle is essential to the ongoing evolution of our digital business.”
Moreover, variety is the spice of customer engagement, offering members seamless points redemption on a user-friendly app and a choice of 15 different reward options, from food to apparel, and supporting Chipotle’s non-profit partners
Example 6: World Of Hyatt
Hyatt, an iconic brand in the hospitality industry, keeps the customer motivation flowing with milestone rewards that accrue every ten nights spent at a Hyatt property—translating to free night spells or accommodation upgrades that keep members coming back for more.
The World of Hyatt program highlights its elite tier system, resetting in February of the second year after qualification, promoting three tiers for exclusive deals and extraordinary benefits:
- Discoverist: Achieved via ten qualifying nights, 25,000 Base Points, or three qualified meetings/events.
- Explorist: Achieved with 30 qualifying nights, 50,000 Base Points, or ten qualified meetings/events.
- Globalist: Achieved with 60 nights, 100,000 Base Points, or 20 qualified conferences/events
The program includes frequently repeated milestone benefits that add a touch of extra luxury and leisure to every visit (depending on the tier), such as:
- Free internet, on-premise restaurant passes, and late checkout.
- Priority room access and waived resort/destination/facility fees
- Guest of honor accreditation and free parking.
The points system provides five base points per $1 spent and 3,500 points qualifying for a free night in any Hyatt hotel. For example, a ten-day vacation in a Hyatt residence at $350 per night qualifies for the equivalent of a 10% discount (minimum) with the scale-up to much higher percentages as the customer’s daily spend goes over the $350 daily yardstick.
An innovative feature includes member promotions that provide the opportunity to earn three times the standard points (i.e., $3 for every dollar spent) for booking in by a specific date or 2X standard points for choosing specified hospitality categories within the chain (e.g., Hyatt Place or Hyatt House).
Conclusion
As you can see, the best loyalty programs extend beyond credits, connecting to customer emotions by delivering exclusivity, personalization, entertainment, competition, reward excitement, and continuous brand exposure. Gamification, innovative point systems, frequent opportunities to earn extra rewards, and meaningful perks make them outstanding reward program poster children in their industries. Finally, they prioritize the customer rather than the company.
Interested in building a program that inspires and delivers customer loyalty? Contact us today to discover how we can help you launch a customer rewards program that works!
