Loyalty Program Launch Strategies

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🙏

H&M has 100 million loyalty members globally. South Africa? Zero. Their acting country manager Keroshan Naidoo just confirmed they're exploring a local launch. His exact words: "We have a loyalty programme globally, and we will launch it when we find the best fit for the local market." That phrase. "Best fit for the local market." That's where most global brands get it wrong. H&M's global programme is solid. Two tiers. Points on every purchase. Hit 500 points and you get early access to collections, designer drops, exclusive events, free shipping. Works well in London. Works well in New York. South Africa is different. H&M has 29 stores here. Everything is imported. Their next store opens later this year. They don't chase expansion targets. Meanwhile, 85% of South Africans actively use loyalty programmes. The average consumer belongs to 10.4 programmes. Ten years ago that number was 4.6. This is one of the most mature loyalty markets on the planet. Checkers Xtra Savings. Clicks ClubCard. Discovery Vitality. FNB eBucks. Smart Shopper. South African consumers know what good looks like. And they'll compare. H&M's global programme is built around fashion exclusivity. Early access. Limited drops. That works for their target customer. But the programmes winning in SA right now are the ones delivering tangible, everyday value; - Cashback. - Partner ecosystems. - Rewards you use this week. If H&M drops the global template as-is, they'll have a clean programme that nobody reaches for. If they localise the redemption layer, connect it to dining, wellness, entertainment, education, transport, they'll have something with real pull in a crowded market. Naidoo talked about local relevance when describing how SA influenced the global curvy denim range. That same thinking needs to show up in the loyalty design. 29 stores. 100 million global members. The programme that wins SA won't be the one with the best app. It'll be the one that connects a clothing purchase to something else that matters in your week.

35 million loyalty members, and Lowe’s is using them to sell a lollipop, a badge, and a reason to come back next month. That is not soft retail news. That is traffic engineering in a hard market. While bigger home purchases stay under pressure, Lowe’s is expanding its loyalty ecosystem with kids’ programs and subscriptions to drive repeat visits and deeper customer relationships. Modern Retail framed it exactly that way today, April 14. The cute version of this story is easy to spot. Free monthly DIY workshops. Kids profiles. Digital badges. Small in store surprises. Families feeling good about a trip to Lowe’s. The more useful version is hiding in plain sight. Lowe’s is taking a low frequency category and building a higher frequency behavior loop around it. Join the loyalty program. Add the child profile. Show up for workshops. Collect badges. Work toward a free tool bag after 12 qualifying badges. Come back again. And again. That is the whole game. Not points. Not slogans. Not “community.” Repeatable reasons to re enter the store. A lot of retailers still treat loyalty like an accounting layer floating above the business. Lowe’s is treating it more like operating infrastructure. Something that shapes visit cadence, household attachment, and future spend. That last point is an inference from the mechanics Lowe’s has launched and the repeat visit objective described in reporting. A few things worth stealing from this: 🧸 Build for the household, not just the buyer. Lowe’s lets families manage participation for multiple children inside one loyalty account. 🛠️ Give progress a physical shape. The 12 badge path to a free tool bag turns loyalty into something visible and oddly hard to ignore. 🍭 Add tiny rewards that feel immediate. A free lollipop is not financially heroic, but it does make the visit more memorable. 📅 Stop waiting for the next big purchase cycle. Create smaller reasons to return before demand naturally shows up. This is an inference based on Lowe’s stated repeat visit strategy and the current softer big ticket environment described by Modern Retail. Funny how often the smartest commerce move looks harmless at first. This one looks like a family workshop. It behaves like a retention machine. #retail #ecommerce #loyalty #customerexperience #omnichannel

How Loblaw Turned Loyalty Into an Experience with Gamification In 2025, I identified gamification as an emerging feature within loyalty programs. Our research showed that 73% of shoppers expected to engage with gamified experiences, with the highest value placed on tiers, chance-based games, and challenges. It was great to see that trend come to life in a real-world example from Eiko Kawano, Senior Director of Digital Experience Strategy at Loblaw. She talked about how her team brought gamification to Loblaws' various brands this week at eTail in Toronto. There was internal skepticism on whether or not games in the loyalty programs would resonate with shoppers. The company moved forward with a test and a guiding principle that the games must shift the transactional nature of loyalty programs to an experiential one. She pointed out that clipping coupons works, but games could inject a great sense of fun and enjoyment. After launching the first game at the end of 2024, games quickly scaled: • 84+ games launched across 2025–2026 • ~30M total game plays • ~51% average play rate And the business impact was clear: • +5.2% higher spend among players vs. non-players • +740 bps retention among top digital customers • Strong internal demand across banners and partners She shared three game examples. I was particularly inspired by the in-store only game--I haven't seen examples of how a digital game can enhance the in-store shopping experience: Shoppers Drug Mart Games • Simple journeys: see a promotion → play → receive an offer • Formats: “spin to win,” “scratch to win” • 8.5M+ plays from Shoppers alone “Scratch for Joy” (Holiday Campaign) • Prize: up to 100,000 points • Fewer winners, but bigger rewards (which turned out to be a key driver for customer participation) Real Canadian Superstore In-Store Game • QR codes in-store to unlock gameplay • Designed to drive discovery across categories • Tested across 22 stores She also shared some great lessons for other retailers and brands when it comes to gamification in loyalty programs: • Make it feel native to the brand • Keep it simple and embedded in the customer journey • Integrate rewards seamlessly (no codes, no extra steps) • Treat gamification as a core capability—not a side project • Build strong cross-functional processes to scale

American Airlines almost went BANKRUPT in 2011. Their genius response created the most profitable loyalty program in aviation history – generating $6+ billion annually. Today: They’re one of the world's largest airlines flying 350+ cities globally. Here’s the brilliant strategy that saved this company from crashing: 2011: American Airlines was toast: Bankruptcy. Pilots threatening strikes. Customers fleeing to competitors. Wall Street declared them dead. But American Airlines was letting something good sit and rot... Their 30-year-old loyalty program was pure gold sitting unused. AAdvantage had 67 million members, but American was treating it like an expense instead of their most valuable asset. Until they turned the whole plan upside down: Stop thinking like an airline. Start thinking like a bank. Instead of just rewarding flights, their program turned miles into currency. The company educated customers that every Starbucks purchase earned miles. Every hotel stay. Every rental car. Even mortgage payments. AAdvantage members could earn miles faster than ever – without even stepping foot on a plane. The results were immediate and shocking: - Program revenue jumped 40% in year one - Members spent 3x more on American flights - Partnership deals worth billions started pouring in But AAdvantage wouldn’t stop there: While competitors copied the partnerships, American had already moved to phase two... weaponizing their data. American now knew where you traveled, when you booked, what you valued most... And this data goldmine let them personalize everything: - Frequent business travelers got upgrade offers - Family vacationers got package deals - Price-sensitive customers got targeted discounts By 2013, something unprecedented happened: AAdvantage sometimes generated MORE profit than their actual flights. Credit card partnerships alone brought in MILLIONS annually. And numbers never lie: - 110+ million AAdvantage members - $6+ billion in annual loyalty program revenue - Industry-leading customer satisfaction scores American Airlines proved that loyalty is simply everything. They turned a crashing plane into a clean landing by following one fundamental truth: Your customers aren’t buying your product. They’re buying a relationship. The bankruptcy-to-billions story reveals the ultimate loyalty formula: - Create value outside your core product - Use data to personalize every single touchpoint - Turn your program into a lifestyle, not just transactions This strategy works in any industry where customer acquisition costs are high and lifetime value matters. Response Labs is using the next generation of tools and data to deliver personalized messaging at scale - including paid media. Follow me at Dan Dawes for more stories on CRM & loyalty marketing.

"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 loyalty programs fail because founders skip this question: what specific behavior are we trying to change?   Not "engagement" or "retention" - those are outcomes, not behaviors.   I mean specific behaviors: buying monthly instead of quarterly, trying new products instead of the same SKU, referring friends, staying subscribed longer.   The program you build depends entirely on that answer.   First, understand your baseline: What's the purchase frequency now? AOV? How many products does a typical customer buy? What's the LTV difference between your best customers and average ones?   Once you know that, you can identify what's preventing customers from doing more of what you want. Usually it's friction (shipping costs, minimum thresholds), lack of awareness (they don't know about other products), or motivation (no reason to consolidate purchases now vs. later).   Then match your program to the barrier:   → If you're optimizing for purchase frequency:   This works when customers naturally want to buy often but something's preventing them. Amazon Prime removes friction with free shipping, fast delivery. Your version needs to remove your friction - maybe that's minimum order thresholds, shipping costs, or decision fatigue.   Do the math first: If someone buys 2x/year at $50 margin each, you're working with $100 AOV. A $99 membership fee leaves $1 to cover perks. That's why frequency-based programs fail below 6-8 purchases annually.   → If you're optimizing for order value:   Stop training customers to expect discounts. Reward large purchases with things that don't erode margin: early access to new products, free samples of premium SKUs, priority support.   The question: What would make someone consolidate their purchase right now instead of splitting it across multiple orders?   → If you're optimizing for product adoption:   This works when trying multiple products predicts retention. Reward exploration directly (points for first purchases in different categories, samples of complementary products).   The math: What's the LTV difference between single-SKU customers and multi-product customers? If it's significant, you can afford to invest in getting people to try new things.   → If you're optimizing for emotional connection:   Stop paying customers to like you. Build experiences they can't get elsewhere: community access, founder conversations, input on product development, behind-the-scenes content.   This works when customers already have high intent but you're competing on commodified features. The program creates switching costs through belonging, not economics.   The framework:   • What's preventing customers from the behavior you want? (friction, awareness, or motivation) • What's the LTV difference if you successfully change that behavior? • Can you afford to invest that difference in the program? • What reward actually removes the barrier you identified?   Figure out your barrier first. Then build the program around removing it.

Holiday shoppers are like shooting stars—bright, exciting, but often fleeting. The real challenge? Turning those one-time buyers into loyal customers who stick around long after the decorations come down. Chances are you're about to get a significant influx of new customers. Here's how to keep them engaged for the long haul: 1.) Send Customized, On-Brand Post-Holiday Emails The time right after a customer makes a purchase is when their affinity for your brand is at its peak. They're excited about their decision and can't wait to get their hands on your product. So why do so many brands use dry, boring follow-up emails? This is an opportunity to send a personalized message, share tips and tutorials, or surprise and delight them with an exclusive offer. Pretty much anything other than a plain, boring "Thanks For Your Purchase!" email would be an improvement. 2.) Build And Promote A Customer Loyalty Program This may seem obvious, but having a customer loyalty program can do wonders for your repeat purchase rate. Where most brands get things wrong is they cut corners by using off-the-shelf platforms that have bland default settings. This is a time to lean into your customer research and build a meaningful loyalty program that offers customers incentives they actually want in exchange for buying products they actually need. Once you get the terms and offers dialed in, use behavior-based email marketing to keep your loyalty program top of mind and generate repeat purchases on a regular basis. 3.) Create Personalized Offers That Build A Brand Community By now, you're probably sensing a trend – using cookie cutter templates is killing your brand. Don't treat your subscribers and customers like just another transaction. Remember, there's a real person behind that screen, and they're experiencing many of the same wins, frustrations, concerns, and emotions you are. The more you can personalize your marketing messages to their unique situation, the more they'll feel like they're part of a community, not a customer base. Don't sell to them. Make them feel like they're a part of your brand journey. At the end of the day, building customer loyalty is about creating meaningful relationships through consistent communication. Here's your checklist for maximizing the long-term impact of your BFCM efforts: ✓ Make a solid first impression with a personalized post-purchase experience ✓ Create and promote a customer loyalty program that's actually appealing ✓ Treat your customers like members of a community ✓ Use hyper-relevant offers to stay top of mind Do all of this, and you'll not only improve your repeat purchase rate, you'll also recruit a large (and growing!) army of lifelong brand advocates.

Loyalty & Reward Co recently designed and implemented a loyalty program that increased repeat transaction spend by 40%. The secret? We looked outside the industry for inspiration. Most companies designing a loyalty program look at what their competitors are doing and copy it. The best brands use their loyalty program to differentiate. Here's how: 1. Where is the blue ocean? • Look where competitors aren't playing • Use brand positioning to create a strategically defensible design that fits in that space 2. Find inspiration outside the industry • Research best-practice programs in other industries • Borrow elements that can be adjusted to create a unique design within your industry 3. Prepare to evolve • Launching the loyalty program is not the end, but the beginning • Use data analytics and customer feedback to evolve and optimise the program The result? A program that captures attention, inspires engagement and drives repeat spend behaviour. How can your brand learn from loyalty program success in other industries? #LoyaltyPrograms #CustomerRetention #Differentiate