10 Successful Customer Loyalty Programs And How to Build One

Did you know that it now costs merchants $29 to acquire each new customer? The same research showed that customer acquisition costs have gone up 60% in just the last five years, and finding new buyers gets more expensive every year.

The good news? There’s another (and a better) way to grow your business… and that’s customer loyalty programs.

In this article, we’ll show you 10 of the best customer loyalty programs from successful brands, and they’ll prove how effective these strategies can be for bringing you revenue. Plus, we’ve included a step-by-step guide at the end to help you create your own loyalty program.

10 Examples of the Best Customer Loyalty Programs

1. The Starbucks Rewards Program

First on our list is the popular Starbucks Rewards, which was launched in 2009. It’s a point-based loyalty program where its members get “Stars” for every purchase they make. This program is made for daily (or frequent) coffee drinkers who love convenience and want to earn rewards from their usual routine.

Starbucks Rewards Benefits

As someone who participates in Starbucks Rewards, let me share with you how it works. The program uses a Star system where we earn one Star per dollar when paying with cash or card. If we preload money into the app, then we get two Stars per dollar.

We have to collect Stars and reach different point levels to redeem rewards. Here’s what we can get depending on how many Stars we’ve saved up:

• 25 Stars: drink customizations like extra shots or syrups
• 100 Stars: brewed coffee, tea, or pastries
• 200 Stars: specialty drinks or hot breakfast items
• 300 Stars: lunch items or whole bean coffee
• 400 Stars: branded merchandise (i.e., tumblers, mugs, etc.) 

In my case, I usually save up for the 200-star (and above) rewards because that’s where I get better items.

Some other perks they provide include the birthday drink (yay for free coffee!), Double Star promotions, and the order-then-pick-up feature that saves us from long lines.

Starbucks Rewards Success

Starbucks Rewards membership hit 34.3 million active users in the U.S. (a 13% jump from 2023). And they contribute 41% of Starbucks’s total U.S. sales.

These figures really show that businesses like yours can improve your sales… and convert new customers into loyal ones IF you create an effective loyalty program.

2. Sephora’s Beauty Insider Program

Up next is Sephora’s Beauty Insider. It was introduced to the public (especially for people who love makeup) in 2007… and was known as one of the first loyalty programs in the beauty industry. Sephora combines point-based and tier-based loyalty systems to reward its repeat customers.

Sephora’s Beauty Insider Benefits

Sephora uses a three-tier system where higher spenders receive bigger rewards and benefits, like a points multiplier and discounts.

Let’s say Anna signed up as an Insider member. Here’s what she can get at each tier:

• Insider (Free): 1 point per dollar spent, get free shipping with no minimum, access to the Rewards Bazaar for samples, 10% seasonal discounts, and 6-7 birthday gift options.
• VIB ($350+ annually): “Insider” tier benefits plus 15% seasonal sales, 3X points during multiplier events, 7-8 birthday gift options, and exclusive gifts with early access to some products.
• Rouge ($1,000+ annually): All benefits from the other tiers. Plus, 20% seasonal discounts, 4X point multipliers, first access to new product launches, Rouge rewards like $100 off for 2,500 points, and same-day delivery options (the crowd’s favorite).

So, if Anna spends $500+ in less than six months, her status goes from Insider to VIB. She’ll earn points faster, and that can motivate her to buy more… and reach “Rouge” status in no time.

Sephora Beauty Insider Success

It has now reached 40 million members (wow!). These members spend 2-3 times more annually compared to non-members. While Sephora won’t share exact percentages, they confirmed that loyalty members bring the majority of their U.S. sales.

Although Sephora’s loyalty program is only for the U.S. and Canada, you can see that they created strong brand loyalty through their tiered approach and enticing rewards.

3. Amazon Prime

Unlike the first two, Amazon Prime is a paid membership program. Members have to pay for a certain amount monthly to enjoy perks in different areas… including Amazon delivery (we’ll share more details soon).

Prime has just celebrated its 20th anniversary this year, and based on its success, we can see that it’ll continue to be a profitable loyalty program.

Amazon Prime Benefits

Amazon Prime members (like me) enjoy so many benefits that make the monthly/yearly subscription 100% worth it. Here’s what we get with membership:

• Delivery perks: Free two-day shipping on Amazon items, same-day delivery, and grocery delivery from Whole Foods.
• Entertainment benefits: Access to Prime Video (movies and shows), Amazon Music (ad-free songs), and unlimited photo storage.
• Shopping advantages: Prime Day exclusive deals, early access to new deals, and daily member-only discounts.
• Additional services: Prime Reading (free books and magazines), prescription discounts, and… 10¢ off per gallon at gas stations.

Yes! I get all of that… for only $14.99/month.

Amazon Prime Success

Amazon Prime’s paid loyalty program is a great example of how strong value can keep customers loyal (even when prices increase). Prime Services made nearly $44.38 billion in 2024, and that’s 10% higher than the previous year.

Plus, 75% of Amazon shoppers are Prime members. That’s a pretty impressive conversion, and not many can pull what this e-commerce giant did.

4. Nike Membership (Previously NikePlus)

Nike Membership is the “updated” free loyalty program for athletes and fitness enthusiasts (who are loyal customers of Nike). What makes it catchy is that it focuses on building community and providing experiences to its members, not the usual free items or rewards.

Nike Membership Benefits

Let’s say one customer named Luke signed up for Nike’s membership after buying his first pair of running shoes. He immediately got access to member-only product drops and early access to limited releases (before they became available to the public).

Besides that, he also got:

• Nike By You Customization: Personalized shoe and gear design options
• Member Rewards: Birthday surprises, achievement celebrations, and exclusive discounts and offers
• Expert Training Content: Access to Nike Run Club and Nike Training Club apps

Plus, he could chat with Nike experts through the app for styling advice (and product recommendations), and got invites to member-only events and experiences in his area.

Nike Membership Success

Nike Membership shows that free membership programs can be incredibly effective if you offer what your target audience can really enjoy. They know their members love to move and stay active, so they provide events, expert consultations, etc.

That wise thinking allowed them to reach $51.2 billion in annual revenue as they achieved 160 million active users worldwide. And you know what’s more impressive? The same report showed that half of all in-store purchases came from these free members.

5. Sam’s Club Membership

Sam’s Club (by Walmart) is a membership-based wholesale warehouse club that sells bulk products… at discounted prices. They target budget-conscious families and individuals by offering cashback rewards and savings when they buy in bulk.

Sam’s Club Membership Benefits

Sam’s Club offers two membership tiers: Club membership ($50/year) and Plus ($110/year). Whatever the tier is, customers can get access to wholesale pricing, member-only fuel discounts, and mobile checkout features.

Plus members receive more, including:

• Free shipping and delivery on orders over $50
• 2% cash back on qualifying purchases up to $500 annually
• Early shopping access to avoid peak hours
• Pharmacy savings, including $0 prescriptions on select generics
• Additional discounts on services like optical and tire installation (up to 50%)

Imagine that a mom named Catherine decided to sign up for a Plus membership. In a year, she spent $6,000 on groceries, household items, and family essentials (for her family of four). 

With the 2% cash back benefit alone, she saved $120 annually. She also saved gas money and avoided crowded weekend shopping with early access hours.

Sam’s Club Membership Success

EMarketer reported that Sam’s Club Plus membership income is up by 14.4% year-over-year. Even with the same store count, they increased revenue by nearly 50% over five years.

Convenience is one of the main reasons for this growth. Some generations (Gen Zs in particular) are willing to pay for membership programs that allow them to save time. 

6. IKEA Family

IKEA Family is another free point-based loyalty program launched in the U.S. in 2011. It mixes traditional rewards with additional (and unique) perks that encourage in-store visits.

It’s created for people who love buying furniture, are doing house upgrades, or… are in the moving stage (i.e., college students, newlyweds, etc.)

IKEA Family Benefits

Let’s say that a customer named Michelle signed up for IKEA Family because she’s planning to buy new stuff for her house in California.

Michelle immediately gets 50 points just from signing up, and she earns one point per dollar spent on her furniture purchases.

During her shopping trips, Michelle gets free coffee and tea (which helps during those long IKEA walks). She also receives member-only offers throughout the year on select products. Plus, she can attend free workshops to learn furniture assembly tips and home decorating skills.

Her IKEA family membership also gives her 90-day price protection. That means if something she bought drops in price within three months, IKEA will give her back the difference.

IKEA Family Success

IKEA Family’s success is because of its dedication to improvement. They keep adding and tweaking their program to reward more customer behaviors (both online and in-store).

That’s how they grew their membership to over 110 million worldwide, and these members bring in 58% of IKEA’s total sales. 

7. Tractor Supply Co Neighbor’s Club

Tractor Supply Co. is the largest rural lifestyle retailer in the U.S. They launched their loyalty program called Neighbor’s Club in 2015 to reward farmers, ranchers, homeowners, gardeners, and even pet owners who buy from their stores.

Their loyal customers receive rewards through a mixed approach, including points-based earning, tiered membership levels, and cashback benefits.

Neighbor’s Club Benefits

All members get quarterly 5% off coupons, birthday gifts, and receipt-free returns. Members also get free pet grooming services (4th pet wash and 8th grooming) and same-day delivery options… for higher tiers.

The program uses a tiered system based on annual spending that determines how many points members earn per dollar:

• Neighbor (free): One point per dollar on purchases up to $499 annually
• Neighbor Preferred ($500-$1,999): 1.5 points per dollar
• Neighbor Preferred Plus ($2,000+): 2 points per dollar

Members can redeem every 100 points for $1 in rewards, and credit cardholders can earn an additional 5% back.

But besides these, what caught my attention is how Tractor uses its loyalty program to honor community “heroes.” Members who are military, veterans, and first responders get extra perks like 2% back daily and 10% discounts on specific days.

Let’s say a customer named Robert is a veteran and farmer in Oklahoma. He reaches Preferred Plus status as he spends $2,500 annually. That means he earns 5,000 points (worth $50), plus an extra $50 from Hometown Heroes benefits, quarterly coupons, and free returns.

Neighbor’s Club Success

Neighbor’s Club’s success is a great loyalty program example built for community recognition and making members feel valued. Because of these efforts, they were able to reach over 38 million members in 2024, and those members provide 80% of their sales. 

8. The North Face’s XPLR Pass

In April 2021, The North Face replaced its VIPeak program (from 2013) with XPLR Pass. They switched from a tiered loyalty program to a simpler points-based one. But their target audience remains the same: adventurers who are looking for good gear and apparel.

XPLR Pass Benefits

Imagine that an outdoorsy person named Jake signed up for the XPLR pass. He bought a $139 bag plus a waterproof boots for $159 from The North Face.

Jake earned one point per dollar spent, so he got 298 points from this transaction. Every 100 points equals $10 in rewards, plus he got free shipping and early access to limited-edition gear drops.

He could also earn more points from the following activity-based opportunities:

• Refer friends: 25 points (up to 4 times yearly)
• Mobile app download: 10 points
• Bring reusable bags to stores: 10 points (twice yearly)
• Check in at National Parks: 5 points per location monthly
• Check in at North Face stores: 5 points per location monthly

Jake and other members get to enjoy early access and rewards while also being encouraged to stay active and explore the outdoors (which perfectly matches North Face’s brand values).

XPLR Pass Success

The rebranding of The North Face’s loyalty program didn’t go in vain. They gained two million new members in their first year (2022) with a 13% boost in revenue. By 2023, they reached 18.5 million total members and achieved over one million new sign-ups in just one quarter.

This success story shows that it’s okay to re-invent your loyalty strategy… if you’re not getting the results you want.

9. The Petco Vital Care Program

Petco’s Vital Care program shows that customer loyalty programs aren’t exclusive to humans, but also work for our pets. They offer two tiers and personalized rewards based on your pet type.

It’s a great loyalty program for pet owners (and fur parents) who have dogs, cats, fish, birds, or even less common pets like reptiles.

Petco’s Vital Care Program Benefits

Petco’s Vital Care program is like having a membership… at a premium pet care club. The Core tier gives you the basics, and the Premier is like upgrading to “VIP status”.

Here’s what the benefits look like for dog owners: Maria has a golden retriever named Max. With a Core membership, she earns points on dog food purchases and gets every 8th grooming session free. The program sends her reminders about Max’s vaccinations and offers member-only pricing on important products.

If Maria upgrades to Premier for $24.99 monthly, she gets everything Core offers plus the following:

• $15 monthly rewards ($180 annual value)
• 10% off all nutrition purchases
• 20% off grooming services
• Unlimited routine vet exams at Petco clinics

Petco’s Vital Care Program Success

Modern Retail mentioned that Petco has reached more than 400,000 active members with 200% year-over-year growth. Their members have 3.5 times higher lifetime value (than regular customers) and increased their recurring revenue by 56%.

Petco’s success is because they know that “pet care” now means comprehensive health and wellness. And they created a solution that rewards owners for their regular shopping behavior… and saves them from expensive vet bills.

10. The REI Co-op Membership

We’ll wrap up this list with REI Co-op Membership. Unlike the usual subscription-based models, REI’s program requires no renewals or recurring fees. It’s for outdoor enthusiasts (like hikers and campers) who love buying gear, equipment, and clothing.

REI Co-op Membership Benefits

REI Co-op membership is like buying a lifetime pass to an exclusive outdoor club, except this Club actually gives money back and lets members help run the place. Their members can view it as investing in an outdoor gear company where they become both customer and part-owner for just $30.

The membership offers free shipping with no minimum order, a full year for returns, and member-only coupons for gear and services. They also get discounts on REI classes, bike shop services, and up to 33% off gear rentals when they want to try something new.

But here’s what made us include REI in this list: They give their members “power” to vote in board elections and influence company decisions. It’s a special way to make customers feel that they are a part of the company. And I think that provides them with a sense of ownership… which can definitely impact their loyalty level (and engagement).

REI Co-op Membership Success

REI’s impact report shows they now have 25 million members (as of 2024). They didn’t share membership revenue, but in 2024 alone, they gave back $189 million in Co-op Member Rewards and invested $282 million into the Co-op community.

These numbers show how effective their membership model is at creating genuine value. Most companies report sales figures, but REI reports how much money it returned to members. 

How to Build and Grow Your Own Loyalty Program

Creating a successful loyalty program involves setting clear goals, choosing the right program model, offering motivating rewards, and making it discoverable. 

Let’s discuss each step, and we’ll give you some tips:

Set Clear Goals & KPIs

You need to know what you want it to accomplish and how you’ll measure success. Setting goals without a plan is like starting a business without knowing what you’re selling (it rarely ends well).

Here’s what you need to do to build your customer rewards program on the right foot: 

• Define your main objective: Do you want to increase repeat purchases, raise average order values, or collect customer data for better marketing? Pick one primary goal instead of trying to solve every business problem (loyalty programs aren’t magic solutions).
• Identify specific metrics to track: If you want more repeat purchases, monitor customer lifetime value (CLTV) and purchase frequency. When you’re trying to raise order values, track the average order size before and after launch. And if you’re collecting customer data, measure email sign-up rates and profile completion rates.
• Track program-specific metrics: Some important ones include enrollment rates, active member percentages, and redemption frequency. For example, if only 3% of customers join your program after three months, you might need better sign-up incentives or simpler registration. 

Choose the Right Loyalty Program Model

Your program type determines how customers interact with your brand (and what behaviors you reward). Here’s a short guide: 

• Points-based programs work well when customers make frequent, smaller purchases. They love seeing their points add up with each visit.
• Tiered programs motivate customers to spend more because everyone wants to unlock the next level of perks.
• Paid memberships are the best when you can offer services worth more than what members pay.
• Cashback programs attract bargain hunters, but you need good profit margins to make them sustainable.
• Hybrid models let you combine different approaches, though they can get complicated to manage.

Always consider your customer buying patterns and profit margins when choosing. If your customers shop monthly and you have 40%+ margins, points programs work well. But for infrequent, high-value purchases, we recommend paid memberships with exclusive benefits. 

Model	How It Works	Example Brand	Best For
Point-based	Customers earn points per purchase and redeem them for rewards	Starbucks Rewards	Everyday retail with frequent, low-ticket purchases
Tiered	Higher spending unlocks more perks and status	Sephora Beauty Insider	Brands with strong repeat spend and community-driven shoppers
Cashback / Spend-based	Customers get money or store credit back based on what they spend	Sam’s Club Plus (cashback benefits)	Value-driven shoppers who like predictable savings
Referral	Members earn rewards for inviting friends or family	The North Face XPLR Pass	Retailers wanting word-of-mouth growth and engagement
Subscription-Based / Paid Membership	Shoppers pay a monthly, annual, or one-time fee for ongoing perks	Amazon Prime, REI Co-op Membership	Retailers offering convenience, exclusivity, and bundled perks

Offer Rewards That Truly Motivate Customers

What type of reward would make your current customers most excited to come back? 

The best loyalty programs offer multiple reward types to appeal to different customer motivations.

You have several options to choose from. Discount rewards take money off future orders, while product rewards let your customers earn free items with their points (great for consumable goods). Experiential rewards include VIP events or early access to sales. 

Service perks like free shipping and better support also work, or you can go with simple cashback that puts money back in their pockets.

Personalization makes rewards more compelling. Instead of sending everyone generic 10% off coupons, use purchase history to offer relevant rewards. For example, you can send dog owners pet supply discounts and parents deals on kids’ products. 

Some brands do this well. Nike offers exclusive shoe customization options through “Nike By You” for their members. Starbucks uses AI to suggest drinks based on your order history, time of day, and even weather.

PRO-TIP: Track which rewards get redeemed most and drive future purchases. If your customers love free shipping but it doesn’t increase order frequency, try product rewards instead.

Make the Program Discoverable

55% of people almost always (or frequently) sign up for loyalty programs when given the opportunity. That’s why it’s important to make your loyalty program visible at the right moments and places, where customers are most likely to join.

You can learn from the brands we mentioned above. Sephora promotes Beauty Insider through staff recommendations and checkout prompts. Starbucks uses its mobile app and in-store displays, and REI features Co-op membership prominently on its website homepage.

If you own an online store, you can focus on: 

• Website pop-ups and checkout banners
• Email campaigns to existing customers
• Social media posts highlighting benefits
• Product page callouts showing points that can be earned

For physical shops, you can still do the above plus the following:  

• In-store signage at checkout and entrances
• Staff mentions during transactions
• Receipt messaging with sign-up prompts

Work Hard on Messaging

Your messaging determines whether customers understand why they should join your loyalty program. Clear, specific value propositions drive more loyalty program sign-ups than vague promises.

Bad messaging focuses on features instead of benefits, while good messaging explains the actual value customers receive.

• Weak example: “Join our rewards program for exclusive benefits and special offers.” 
• Strong example: “Join free and get 10% back on every purchase, plus free shipping and early access to sales.”

The difference is specificity. Your customers need to understand your program’s math quickly (how much they spend vs. what they get back). Vague terms like “exclusive benefits” make people guess at value, and not everyone has the time for that. 

Continuously Measure and Optimize

Okay. For the last step (but one of the most important): regular monitoring and adjustments. You can only stay effective and profitable if you track member behavior and business impact to identify what’s working and what needs fixing.

Keep an eye on enrollment rates, active member percentages, redemption frequency, and how much more your members spend compared to regular customers. When you spot problems, here’s what they usually mean:

• Low enrollment: Test different sign-up incentives or simplify your registration process
• Low redemption rates: Your rewards might be too expensive, so try lowering the thresholds
• High redemption but no spending increase: You need better reward targeting

It’s also helpful to run A/B tests on reward offers, messaging, and program structure. Small changes can make big differences. For example, reducing points needed for first rewards from 500 to 250 often improves engagement because members love quick wins.

Building an effective loyalty program requires the right tools to handle all the moving parts we’ve discussed. Channelwill Loloyal makes this process simple for Shopify merchants and DTC brands.

Our app is an all-in-one loyalty solution covering points-based rewards, VIP tiers, and referral programs. You don’t need any coding experience to set it up, but you can customize the look to match your brand. Loloyal also allows you to launch automated campaigns, track key metrics, and optimize messaging through one dashboard. 

Try our app for free on Shopify.

Conclusion: Building Customer Loyalty for Sustainable Growth

You now understand how the most successful loyalty programs like Starbucks, Sephora, and Amazon create systems that drive real business results.

We’ve covered different program types, setup strategies, and ways to measure success that help you convert one-time shoppers into loyal customers.

You need to start with clear goals, pick the program model that fits your business, and keep testing what works. The brands we discussed didn’t build their programs overnight, but they created lasting relationships that reward customers and drive consistent business profits.

Ready to create a unique loyalty program that works for your business? Book a demo with us to find out how you can get started.