Creating Loyalty Programs That Actually Work

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🙏

Way too many e-commerce brands run bare-minimum loyalty programs that don't move the needle. Points. Discounts. It gets old quick. Your top 10% of customers likely drive 40-65% of your profit. But are you treating them like the VIPs they are? Or just sending them the same generic emails as everyone else? Brands that are crushing it right now are building tiered VIP ecosystems that transform transactional shoppers into high-LTV brand advocates. Speaking from 4+ years of experience, I’ve learned a few things that actually work: --> Early access drops that make top customers feel like insiders --> Exclusive product variants unavailable to regular customers --> Private Slack/Discord communities connecting your best customers --> Physical gifts that arrive unexpectedly (not just on birthdays) --> VIP-only virtual events with your founder/designers Data doesn't lie. Well-designed VIP programs consistently deliver 3-5x ROI compared to acquisition campaigns. These programs also cost dramatically less than constantly chasing new customers. Stop treating loyalty like a cost center using discounts, and start treating it like the profit driver it should be, like leveraging experiences, exclusivity, or building relationships. Your competitors are leaving millions on the table with lackluster VIP strategies. The opportunity is massive for brands willing to invest in their best customers the right way. Who's doing VIP programming exceptionally well in your category? Curious to hear some examples.

Are discounts hurting your brand’s image, and performance? Before you start tossing around discounts just to get customers to buy, take a step back. Are you building a discount brand, or do you want to retain that premium image? I often see brands “train” their customers to only shop with them during heavy discount periods. This is NOT a winning strategy. Often times this dilutes margins and pulls revenue forward at the expense of predictable and stable 30/60/90 days sales. You also attract a different type of buyer (discount shopper), who usually has lower CLV and churns faster. Here’s how to get creative with your offers without slashing prices: 1. Test the Wording Instead of defaulting to percentage discounts, experiment with more strategic language in your offers. For example, if you’re a subscription business, try a "double hit" offer, where customers can bundle two subscriptions to save on shipping or receive a slight added value. This approach keeps the offer compelling without lowering your brand’s perceived value. Wording like “Double Your Order, Save on Shipping” gives the feel of an exclusive offer while still protecting margins. 2. Offer Freebies Instead For premium brands, offering a freebie can be far more powerful than offering discounts. At MANSSION, for example, free ring sizers are provided with each purchase, which adds value without devaluing the product. This approach makes customers feel they’re getting something special and unexpected. This tactic works especially well for building brand loyalty, as customers associate the “extra” with your brand’s generosity. 3. Escalate Offers for Retention Rather than immediately offering a discount to customers who haven’t repurchased, consider using a tiered incentive system. Start with a small offer, like free shipping or a minor add-on, and gradually escalate only if they remain inactive. This gives you a retention lever without conditioning customers to expect discounts right away. It also preserves the brand’s premium positioning, rewarding patience with stronger offers over time. 4. Focus on Value, Not Price Instead of simply lowering prices, focus on delivering additional value. Consider bundling products at a slightly reduced price, offering loyalty program perks, or providing exclusive early access to new products. The goal is to give customers a reason to keep buying from you without eroding your brand image. When value is defined by unique experiences or exclusive access, customers perceive your brand as generous and premium—not discounted. Key Takeaway: You don’t have to race to the bottom with discounts. A well-thought-out offer that preserves your brand’s integrity is far more powerful. Remember: Value > Price.

👀 𝗧𝗵𝗲𝘀𝗲 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗹𝗼𝘆𝗮𝗹𝘁𝘆 𝗵𝗮𝗰𝗸𝘀 𝘆𝗼𝘂 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗳𝘂𝘁𝘂𝗿𝗲-𝗽𝗿𝗼𝗼𝗳 𝘆𝗼𝘂𝗿 𝗯𝗲𝗮𝘂𝘁𝘆 𝗯𝗿𝗮𝗻𝗱 The brand loyalty game is changing. Gen Z swipes, samples, unsubscribes — then repeats. ❗ BUT: 𝙂𝙚𝙣 𝙕 𝙘𝙤𝙣𝙨𝙪𝙢𝙚𝙧𝙨 𝙖𝙧𝙚 𝙨𝙤𝙢𝙚 𝙤𝙛 𝙩𝙝𝙚 𝙢𝙤𝙨𝙩 𝙡𝙤𝙮𝙖𝙡 𝙩𝙤 𝙩𝙝𝙚 𝙗𝙚𝙖𝙪𝙩𝙮 𝙨𝙚𝙘𝙩𝙤𝙧, 𝙬𝙞𝙩𝙝 60% 𝙬𝙞𝙡𝙡𝙞𝙣𝙜 𝙩𝙤 𝙠𝙚𝙚𝙥 𝙗𝙪𝙮𝙞𝙣𝙜 𝙛𝙧𝙤𝙢 𝙩𝙝𝙚𝙞𝙧 𝙛𝙖𝙫𝙤𝙧𝙞𝙩𝙚 𝙗𝙧𝙖𝙣𝙙𝙨. So let's look at the bigger (loyalty) picture: 📉 Beauty brand loyalty is down 20% in the last two years. 📉 90% of Amazon beauty purchases? Unbranded. In a category obsessed with newness, retention is now the most underrated growth lever. Now what's the winning playbook? Connection > Coupons. Ritual > Rewards. Participation > Points. Here’s what smart brands are doing: 🪐 OSEA Malibu reduced churn by 40% just by improving its subscription UX based on customer feedback and conducting frequent A/B testing to optimize the customer journey. 🪐 REFY doesn't just reward customers — it recruits them. Its product development strategy invites the community to shape the brand's future, creating co-ownership through direct engagement. 🪐 Medalist Skin rewards customers for real-life actions like attending women’s sports games or signing up for a 5k run — loyalty as lifestyle. 🪐 Face Reality focuses on strategic product bundling to successfully increase loyalty among their B2B partners and B2C customers simultaneously, resulting in 90%+ B2B retention rates. 🪐 Charlotte Tilbury Beauty turned loyalty into lore. Its “Beauty Universe” rewards fans with surprise gifts, quizzes, and access to the mysterious Magic Vault — a program that feels more like a fantasy game than a transaction. 🪐 Glow Recipe knows loyalty lives on social. “Glow Rewards” rewards referrals, shares, and follows — treating community actions as valuable as purchases. 🪐 Aveda leans into accumulation. Its paid “Plus Rewards” program unlocks everything from robes to spa days, doubling down on experiential aspiration. Across the board, the brands winning on loyalty all share one trait: ❗ 𝙏𝙝𝙚𝙮 𝙩𝙧𝙚𝙖𝙩 𝙡𝙤𝙮𝙖𝙡𝙩𝙮 𝙖𝙨 𝙖 𝙧𝙚𝙡𝙖𝙩𝙞𝙤𝙣𝙨𝙝𝙞𝙥, 𝙣𝙤𝙩 𝙖 𝙧𝙚𝙩𝙚𝙣𝙩𝙞𝙤𝙣 𝙩𝙖𝙘𝙩𝙞𝙘. So what should you be doing? 🔺 Design community into your product, not just your Instagram. 🔺 Design your loyalty program like a universe, not a discount bin. 🔺 Reward values, not just volume. 🔺 Swap point-hoarding for co-creation, access, and honest reward. 🔺 Make engagement feel like access, not effort. ❗ 𝘽𝙚𝙘𝙖𝙪𝙨𝙚 𝙞𝙣 2025, 𝙩𝙝𝙚 𝙗𝙧𝙖𝙣𝙙𝙨 𝙩𝙝𝙖𝙩 𝙠𝙚𝙚𝙥 𝙩𝙝𝙚𝙞𝙧 𝙘𝙪𝙨𝙩𝙤𝙢𝙚𝙧𝙨? 𝙒𝙞𝙡𝙡 𝙗𝙚 𝙩𝙝𝙚 𝙤𝙣𝙚𝙨 𝙩𝙝𝙖𝙩 𝙠𝙣𝙤𝙬 𝙩𝙝𝙚𝙢. Thoughts? Drop them below! 😍 #BrandLoyalty #BeautyMarketing #RetentionStrategy #CommunityBuilding #BrandStrategy #BeautyIndustry #BeautyTrends #MarketingStrategy #BeautyBusiness #GrowthMarketing

"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

One of the biggest takeaways I spotted from Intuit Mailchimp’s analysis of the 2024 holiday shopping season is that the new year is ripe with new opportunities to drive loyalty. Here’s why → 64% of orders from Mailchimp customers with connected stores came from new customers during Cyber Weekend 2024. That's a huge opportunity to grow your loyal customer base! And research we produced with Canvas8 tells us that the best kept secret to driving loyalty is actually grounded in science. Our Loyalty Wheel reveals 4 key drivers of loyalty: 1. Reward: Our brains love rewards. Create a sense of reciprocity by offering exclusive deals, personalized discounts, or early access to new products. 2. Memory: Make it easy for customers to remember (and repeat!) positive experiences with your brand. Design a frictionless customer journey, offer subscriptions for frequently purchased items, and send well-timed reminders. 3. Emotion: Foster an emotional connection that goes beyond transactional exchanges. Align your brand with causes your customers care about, share authentic stories, and build a sense of community. 4. Social Interaction: Encourage customers to share their love for your brand with friends and family. Create opportunities for user-generated content, run refer-a-friend programs, or host exclusive events. And here's how to put it all into action: 🎉 Surprise and delight: Gift your customers with unexpected rewards. And just not generic discounts. Offer exclusive experiences or partner with like-minded brands to create unique offers. 🛝 Streamline every touchpoint: Remove friction in the customer journey with automation. From browsing to purchasing to post-purchase support, make it easy and enjoyable to do business with your brand. 🎯 Prioritize personalization: Craft your messaging and build authentic connections. Use data and AI analysis to understand your customers' values and preferences and use those insights to create content that resonates. 🤗 Give VIP treatment: Make your customers feel like VIPs. Give them early access to new products, invite them to exclusive events, or feature them on your social media channels. Download Mailchimp and Canvas8’s The Science of Loyalty and The Strategic Loyalty Playbook for a deep dive into the science, complete with actionable strategies and inspiring examples: https://bit.ly/49FJayO Make 2025 the year of the loyal customer. You got this.