Techniques For Understanding The Role Of Loyalty Programs

I analyzed 100+ loyalty programs in the last 30 days. Most brands still run loyalty like it’s 2009: Earn points, get a discount, repeat. The top 10%? They’re using loyalty to change behavior- not just reward it. If I were Head of Loyalty at a $10B+ brand today, here’s exactly what I’d do to build a program that drives LTV, repeat purchases, and real retention: 1. Stop Giving Away Loyalty - Make Them Pay for It Costco, RH, Barnes & Noble. When customers pay upfront, they buy in - literally and psychologically. Forget free points. Paid memberships = commitment, retention, higher LTV and emotional sunk cost. 2. Make Loyalty Required, Not Optional - Integrate Directly into Payments Starbucks preloads!!! When rewards are embedded in how people pay, behavior shifts faster, and for longer. This is probably the biggest opportunity in loyalty right now. 3. Forget Delayed Points - Instant Gratification is More Important Immediate dopamine beats theoretical future savings. Slow accumulation = slow engagement. Instant offers = repeat behavior. The 2nd purchase matters more than the 10th. 4. Make Loyalty Emotional, Not Transactional REI, North Face, Sephora. Customers want to belong, not just save. Identity, community, and shared values are outperforming cashbacks and discounts in driving long-term loyalty. Loyalty isn’t just a discount strategy, it’s a brand strategy. 5. Invest in Status + Experiences, not Generic Perks This isn't just theory – with companies like Rapha and Lululemon offering loyalty members exclusive product drops, community events and behind-the-scenes experiences. Lean into waitlists and exclusive product drops. Less financial. More status + psychological “being in the club.” 6. Reward Engagement, Not Just Transactions MoxieLash, Pacifica, Lucy & Yak. UGC. Reviews. Referrals. Loyalty now means participation. The modern flywheel starts before checkout - and lasts far beyond it. ~~ Bottom line? If your loyalty program is still playing a game from 15 years ago, your customers are going to find better options. Today, the best brands in 2025 aren’t just rewarding loyalty- they're engineering it. PS: We analyzed 100+ programs across QSR, retail, travel, and fintech. Next week I’ll share the Top 30 loyalty programs leading the way. Stay tuned🙏

"Points for purchases" is killing your brand. That's what Phil C., CEO of Upzelo, told me during our recent Chew On This episode. And after seeing the data from 4,000+ brands, I believe him. Here's what's actually working in loyalty and retention → Phil's journey is fascinating. Before Upzelo, he built the world's largest fitness platform with a 1.45% churn rate. Now he's helping brands reimagine loyalty programs. What he taught us: While most DTC brands are still playing the points game, they're bleeding customer value and watching CAC skyrocket. Instead, here are 3 strategies to ensure your loyalty program brings value to your customers and your brand: 1. Stop Chasing Transactions Traditional approach: Points for purchases Modern approach: Reward customer success Phil shared how one UK brand connected health data to their loyalty program. Every workout became a reason to engage, not just every purchase. 2. Meet Customers in Real Life Your customers don't live inside your Shopify store. One of Phil's clients, a motorcycle gear company, built their entire program around Saturday group rides. The result? 3,500 new program members in 3 weeks. No email blasts. No ads. Just organic sharing between riders. 3. Measure Real Impact Drop these vanity metrics: - Program signups - Points earned - Reward redemptions Instead, track what drives growth: - Purchase frequency - Category adoption - Real-world sharing 4. Goal achievement At Obvi, we're already seeing the impact of this approach. When we shifted from points-based rewards to focusing on customer fitness goals and results, our retention impact transformed. The Big Revelation → The best loyalty programs don't feel like programs at all. They feel like a natural extension of why customers chose you in the first place. Want to build real loyalty in 2024? Stop trying to buy it with points.  Start earning it by helping customers succeed. Huge thanks to Phil Carr for sharing these insights from his work with over 4,000 brands. Want the full playbook? Check out our Chewonthis DTC episode where we break down: - Moving beyond transactional loyalty - Building retention through real-life connections - Measuring what actually drives growth

Most brands reward customers for what they buy. H&M is rewarding them for who they become! This is the shift we’re seeing in the smartest loyalty programs today. Loyalty is not just about purchases or spends, it is about behavior! Let's take a look at H&M’s Conscious Points model, built into its free membership program. Sure, at H&M, members earn points when they shop. But they also earn rewards for sustainable actions, such as recycling clothes, using eco-friendly delivery, and skipping single-use bags. ♻️ So, why does this approach work? 📌 It turns values into action - Customers don’t just hear about H&M’s sustainability goals. They become an integral part of it, every time they engage. 📌 It drives smarter personalization - The program collects data on members’ sustainability choices, allowing H&M to tailor offers, messaging, and incentives based on what each customer actually cares about. 📌 It deepens emotional loyalty - When your customer believes their actions with your brand are making a positive impact, they stick around for more than just the discount. 📌 It tackles head-on, a key criticism of fast fashion, that it adversely affects the environment. So how do you apply this to your business? Ask yourself: → What actions (not just purchases) do you want to encourage in your customers? → What deeper purpose or value does your brand stand for? → How can your membership program turn the answers to above, into a daily habit for your customer? Because the next era of loyalty programs isn’t about accumulating points. It’s about building a shared identity between the brand and the buyer. That’s how H&M is turning fashion into a movement - one conscious customer at a time. #hm #membershipprogram #memberships #ecommerce