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10 Best Rewards Programs for Loyal Customers

Customer Experience

 Remember when people’s keyrings used to contain mainly, well, keys? Nowadays everyone is walking around with a fistful of plastic tags, each representing a customer loyalty program.


Over the past several years, it seems companies have focused increasing effort on encouraging customer retention programs, and for good reason: Studies show it costs companies 5-10x more to acquire a new customer than to keep an existing one.

But which loyalty rewards programs are actually the most rewarding? Here’s a run-down of the best rewards programs for loyal customers.


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1. Tiered Reward Programs

The common pitfall of the ever-popular points-based reward system is that customers lose interest and forget before earning their first reward. To combat this, many companies have moved to a tiered reward system. The first reward is redeemable within a short time frame, giving the customer instant gratification and making them feel valued as a member of the program. Then, customers who come back for more are rewarded with perks of increasing value to retain this loyalty.

2. Subscription programs

When my husband first enrolled in Dollar Shave Club, I was skeptical. Instead of paying an arm and a leg at the supermarket for razors, he is charged only $3 a month for five fresh, quality razors. Companies like this are not only saving money on retail overhead, but they’ve managed to build a customer retention program right into their business model. In DSC’s case, the system seems to be paying off: they just sold off their startup brand for a tidy sum of 1 billion dollars.

3. Cashback on purchases

Nothing speaks to the American consumer like the almighty dollar. Companies who offer cash back on purchases represent a growing customer retention program by which customers who would normally pick up their items at any old place will return again and again to the same retailer or online marketplace in order to get more bang for their buck.

4. Up-front fee membership programs

While it may seem pretty bold for a company to expect customers to pay a fee to become members of a loyalty program, a quick glance at Amazon’s prime member program proves that it is one of the best rewards programs out there. Customers pay $99 a year to become a member, but the perks of that fee bring members back again and again, spending 58% more than the casual Amazon user. The best-loved Amazon Prime perk? Free two-day shipping on millions of items with no minimum purchase.

5. Service Short-Cuts

Companies that want to provide outstanding customer service can save loyal customers time by giving them a direct line to a representative or a key-in code that gets them to the front of the line faster. Customers feel like they have exclusive access to agents and are more confident with future purchases as a result.

**A look into the future of call center customer service**

6. Free stuff

Starbucks has one of the best rewards programs for loyal customers because it’s essentially comprised of lots and lots of free stuff. Members not only get a free drink on their birthday, but purchases over time accumulate to warrant additional freebies: flavor shots, milk upgrade options, and free refills to name just a few.

7. Referral incentives

Customers tend to become loyal where their friends and family are loyal, too. Referral incentives have the potential to encourage loyalty in existing customers (people tend to stand behind a company they’ve vouched for in the past) while also bringing in new customers that are likely to become loyal themselves.


For example, Groupon offers a $10 credit in each direction- to the person who referred a friend and the friend themselves- resulting in a win-win and a growing loyal base.

8. Exclusive access

 In some cases loyalty and exclusivity go hand-in-hand.  Companies can offer their loyal customers exclusive access to goods and services that others miss out on, making loyalty program enrollees feel like members of the company’s inner circle.


For example, Nordstrom’s Rewards customers get early access to its anniversary sales, and the beauty product company Sephora offers Beauty Insider exclusive access to professionally selected beauty sets and pre-release specialty products.

9. The element of surprise

Some of the best rewards programs are not just about accumulating points and reaching thresholds, but about creating a memorable customer experience. Many companies are beginning to embrace the “surprise and delight” strategy of loyalty rewards. Loyal customers at the Caribou Coffee register are surprised randomly with rewards such as size upgrades or 50% off your next cup.

10. Profit sharing

A truly loyal customer delights in the success of his/her favorite brand or company.


REI taps into this desire to be a part of something big with its member dividends offering. During March of every year, members receive what the company considers to be their portion of the profit in the form of roughly 10% back on eligible purchases. Members can spend this money on any REI merchandise online or in-store, thus reinforcing their already-loyal habits.


Companies who invest in their existing customer base by offering quality rewards programs are spending their time and money wisely. Not only is it less costly to support an existing customer than to acquire a new one, but repeat customers spend on average 67% more than their first-time counterparts.


The best rewards programs for loyal customers are those that offer both short and long-term perks to the consumer, and those that treat their customers to the exclusive and the unexpected.


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Jade Longelin Jade Longelin

Jade Longelin is a digital marketing specialist. When she's not working with Playvox or her own projects, she's either traveling or spending time with her dog.

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