Last updated: Brand devotion: 10 best customer loyalty programs

Brand devotion: 10 best customer loyalty programs


The best customer loyalty programs boost customer retention, increase revenue, and build brand advocates. They’re essential for brands in today’s hypercompetitive market, but they’re not easy.

More than 90% of companies have some type of loyalty or rewards program. Airlines, restaurants, grocery stores, and retailers of all sizes have them. Loyalty programs have become only more important as businesses try to recover from the pandemic, when customer loyalty took a big hit.

A McKinsey and Company survey of US consumers showed that about 40% of US consumers changed brands in 2020, double the number from 2019.

Brands invest a lot of time and money into their programs, but ROI can be elusive. According to a Harvard Business Review survey of 400 business leaders, only 42% believe their loyalty program strategy is effective. There are a lot of rewards cards collecting dust.

Customer loyalty program: Steps to success

But done right, a rewards program pays enormous dividends. Loyal customers will keep coming back to buy more, driving up customer lifetime value. They typically spend more — an oft-cited statistic is 67% more than new customers.

So what does it take to make a loyalty program work?

  1. Personalization. Miles and points have been traditional rewards, but consumers today expect experiences, perks and promotions tailored for them. This requires careful, strategic use of customer data.
  2. Emotional connection. Customers want to feel like a brand understands them and their values. A Capgemini study found that emotions are the biggest driver of customer loyalty and that emotionally engaged customers spend more.
  3. Customer service. One of the best ways to make customers feel special is by giving them excellent service. Providing members with priority access to quick help is a sure-fire way to win them over.
  4. Transparency. Make ease-of-use with a priority with mobile access plus complete clarity on what customers get in return for their participation.
  5. Revisit, revamp. The most effective programs evolve over time as brands adjust to changing consumer preferences.

You really like me: Companies doing it right

Loyalty programs have been around for a very long time, even before the era of S&H Green Stamps. Today, the proliferation of programs combined with a digital world and ever-changing buyer behavior make for a challenging space.

Here are some of the brands that have figured out a winning formula (in alphabetical order).

Alaska Airlines: U.S. News ranked the Alaska Airlines Mileage Plan as the No. 1 in its ranking of best airline rewards programs. The publication said members’ ability to earn and redeem miles with Alaska and 18 partner airlines is a plus, along with flexible redemption options.

CVS Pharmacy: With 74 million members, the CVS ExtraBucks Rewards program continues to gain popularity. Membership is free and rewards include personalized offers and discounts. The company recently rolled out changes to the 20-year-old program, including immediate access the 2% back on purchases and a new birthday benefit for those who share their special day with the company.

Barnes and Noble: It’s getting harder to find a Barnes and Noble these days, but the bookseller’s membership program offers book-loving members some good deals. For a $25 fee, Barnes and Noble offers 40% off hardcover bestsellers, 10% off store purchases, free shipping, early access to special offers, and a birthday gift.

IKEA: The ready-to-assemble furniture giant’s rewards program includes discount prices on select products, a birthday surprise, access to free workshops and events. Members of the IKEA Family rewards program, which is free to join, even get treated to a free hot beverage with every visit.

Kohl’s: The Wisconsin-based retailer last fall replaced its points-based rewards program with one that gives members 5% Kohl’s Cash on every purchase every day. Members also receive personalized offers and a birthday gift. Those who also have a Kohl’s credit card receive additional perks.

Macy’s: The retailer, which has been overhauling its operations amid the pandemic, counts its Star Rewards program as a bright spot. With 30 million members, the program offers points on every purchase, personalized discounts and perks, and a birthday gift. Store credit card holders receive additional benefits based on their annual spending, including free shipping.

Marriot: The Marriott Bonvoy program earned the top spot in U.S. News’ evaluation of hotel rewards programs. Members receive points when they stay at one of the hotel giant’s 30 affiliated brands and redeem them for hotel stays and room upgrades, flights, rental cars, and vacation packages. Marriott recently relaunched its Bonvoy Moments platform, offering concerts, culinary experiences, sporting events, and more in exchange for points.

Papa John’s: The fast-food chain’s rewards program recently reached the 20 million-member mark, up from 12 million members two years ago. Diners buying a ton of pizza during the pandemic was a big factor for the surge. The company credited its loyalty members for almost half of its first-quarter sales.

REI: The outdoor gear co-op takes a different tack on rewards programs with its $20 lifetime membership. The initial signup fee come with a instant 20% discount, special offers, exclusive events, discounts on equipment rentals and outdoor activities, and 10% of all purchases, which is paid as an annual dividend.

Starbucks: The omnipresent coffeehouse routinely receives high marks for its Starbucks Rewards program, which saw US membership surge to 24.2 million, a 48% year-over-year increase. Membership is free, and includes free in-store refills on coffee and tea and a free birthday drink, chances to win prizes by playing games, plus convenient order ahead services.

Personalization: It’s not magic.
It’s method.
Find out who does it best HERE

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