9 Great Examples of Customer Loyalty Programs | Lessons for Small Business
Feb 9, 2025
"Are you a member of our rewards program?"
You've heard this question countless times. At the coffee shop, the clothing store, the supermarket, the pharmacy. Customer loyalty programs are everywhere—and for good reason.
The average consumer belongs to more than a dozen loyalty programs. The vast majority of businesses run some form of rewards scheme. Billions of loyalty memberships exist worldwide.
But not all programs are created equal. Some inspire genuine devotion. Others collect dust in app folders and wallet drawers. The difference lies in design, execution, and understanding what customers actually value.
This article examines nine customer loyalty programs—from global giants to local independents—and extracts lessons you can apply to your own business. By the end, you'll have concrete inspiration for building a program that keeps customers coming back.
What Makes Loyalty Programs Work
Before diving into examples, let's establish why loyalty programs exist and what makes them effective.
The Core Purpose
At their foundation, loyalty programs serve two purposes:
Customer appreciation: A genuine "thank you" for choosing your business repeatedly. Rewards acknowledge the relationship and make customers feel valued.
Behaviour motivation: Incentives that encourage customers to visit more often, spend more per visit, and choose you over competitors. The program shapes behaviour in ways that benefit both parties.
The best programs balance both purposes. Pure behaviour manipulation feels hollow. Pure appreciation without strategic design wastes resources.
How They Work
Most programs use some variation of:
Points or stamps: Customers earn credits through purchases or visits, redeemable once they reach certain thresholds.
Tiers: Different membership levels with escalating benefits, encouraging customers to reach higher status.
Paid membership: Upfront fees in exchange for ongoing benefits—creating commitment through investment.
Referrals: Rewards for bringing in new customers, turning existing customers into advocates.
The structure matters less than the execution. Simple punch cards can outperform complex point systems if designed thoughtfully.
The Data Advantage
Digital programs provide something paper never could: customer data. Purchase history, visit patterns, preferences, response to offers—all visible and actionable.
This data enables personalisation, targeted communication, and continuous improvement. It transforms a program from passive reward tracking into active relationship management.
Now, let's look at nine programs that get loyalty right—and what you can learn from each.
1. Starbucks Rewards: Data-Driven Personalisation
Starbucks pioneered the app-based loyalty program, and their approach remains a benchmark. With over 30 million active members driving more than half of the company's total revenue, the Starbucks Rewards program has become a case study in how behavioural architecture and data collection can turn casual coffee drinkers into habitual brand loyalists.
How it works: Customers earn "stars" for purchases made through the Starbucks app. One star per pound spent, with bonus opportunities throughout. Stars convert to free drinks, food, and merchandise at various thresholds.
What makes it effective:
App-exclusive earning: By requiring app purchases to earn stars, Starbucks collects rich data on every loyal customer—preferences, locations, timing, order history. This data powers personalised offers and recommendations.
Low redemption thresholds: Customers can start redeeming at relatively low star counts, creating quick wins that reinforce participation.
Gamification: Bonus star challenges, streak rewards, and personalised goals keep the program engaging beyond simple earn-and-burn. Research suggests that incorporating gamification into loyalty programs can boost customer engagement by as much as 47%, which explains why Starbucks invests so heavily in these mechanics.
Lesson for small businesses: You don't need Starbucks' resources to use data effectively. Digital loyalty platforms like Perkstar capture purchase patterns and enable personalised communication. The principle scales down: know your customers, communicate relevantly, reward meaningfully.
2. Sephora Beauty Insider: Tiered Flexibility
Sephora's Beauty Insider program boasts over 25 million members—remarkable for a specialty retailer.
How it works: Three tiers (Insider, VIB, VIB Rouge) based on annual spending. Higher tiers unlock better rewards and exclusive experiences. Points accumulate with every purchase, redeemable for products, samples, experiences, and more.
What makes it effective:
Aspirational tiers: Most members sit at entry level; top tier feels exclusive and desirable. This creates something to work toward.
Redemption flexibility: Points can become gift cards, discounts, free products, event access, or exclusive launches. Customers choose what matters to them.
Experiential rewards: Beyond products, members can redeem for makeovers, classes, and meet-the-founder events. These create emotional connection beyond transactions.
Lesson for small businesses: Flexibility in redemption matters. Not every customer wants the same reward. Perkstar's multiple card types (stamps, points, memberships, coupons, gift cards) let you offer varied redemption options without complexity. Even simple programs can offer choice: "Redeem your reward for a free coffee OR a pastry."
3. Amazon Prime: Commitment Through Investment
Amazon Prime represents a different model: paid membership with bundled benefits.
How it works: Annual fee provides unlimited fast shipping, streaming services, exclusive deals, and more. No points, no earning—just continuous perks for members.
What makes it effective:
Sunk cost psychology: Having paid for membership, customers feel compelled to "get their money's worth" by shopping more at Amazon.
Bundled value: Individual benefits (shipping, streaming, deals) combine into a package worth more than the fee. Customers feel they're winning.
Competitive moat: Prime members shop with Amazon by default, rarely price-comparing. The membership creates genuine loyalty through commitment.
Prime members spend roughly twice as much as non-members—evidence that paid commitment drives behaviour.
Lesson for small businesses: Paid memberships work when the value clearly exceeds the cost. A café might offer a monthly membership with daily drink discounts. A salon might offer VIP membership with priority booking and treatment upgrades. Perkstar's membership card type enables this model—ongoing benefits in exchange for commitment.
4. The North Face XPLR Pass: Earning Beyond Purchases
Outdoor brand The North Face created a program aligned with their customers' lifestyles.
How it works: Points earned through purchases, but also through app check-ins at national parks, bringing reusable bags to stores, and referring friends. Rewards include gear, experiences, and exclusive access.
What makes it effective:
Values alignment: The program rewards behaviours that matter to outdoor enthusiasts—visiting nature, environmental consciousness. It feels authentic to the brand.
Experiential rewards: Product testing opportunities, limited edition gear, and adventure experiences resonate more than simple discounts for this audience.
Multiple earning paths: Not just spending—engaging with the brand and its values earns recognition.
Lesson for small businesses: Reward behaviours you want to encourage, not just purchases. A café might give bonus stamps for bringing reusable cups. A salon might reward referrals or social media shares. Perkstar's push notifications can acknowledge these non-purchase actions: "Thanks for bringing your own cup—here's a bonus stamp!"
5. REI Co-op: Purpose-Driven Membership
Outdoor retailer REI offers a unique model: paid lifetime membership with social impact.
How it works: A one-time £30 fee provides lifetime membership with 10% back on purchases, access to used gear trading, exclusive products, and experience discounts. A portion of REI's profits support outdoor access initiatives.
What makes it effective:
Lifetime value: The one-time fee creates permanent membership—no renewals to forget, no recurring charges to resent.
Social impact: Members know their purchases support causes they care about. This creates emotional loyalty beyond personal benefit.
Community identity: Being an REI member means something—it's an identity marker for outdoor enthusiasts.
Lesson for small businesses: Giving back resonates. Could your program donate to local causes? Could completed stamp cards equal charitable contributions? Customers increasingly want their spending to mean something beyond personal consumption. Even small gestures create connection.
6. Marriott Bonvoy: Partnership Power
Marriott's travel loyalty program demonstrates the power of partnerships.
How it works: Points earned from hotel stays, activities, and partner spending. Redemption options span Marriott properties, airline flights, experiences, and partner services.
What makes it effective:
Extensive partnerships: Points earned at Marriott can become flights, car rentals, or experiences. This flexibility makes points feel more valuable.
Member rates: Beyond points, members get exclusive pricing—immediate value regardless of point accumulation.
Status recognition: Tiered elite status with tangible benefits (upgrades, late checkout, lounge access) that frequent travellers genuinely value.
Lesson for small businesses: Local partnerships create similar flexibility. Partner with complementary businesses—a café and bookshop, a salon and spa, a restaurant and boutique—to offer cross-promotional rewards. Your loyalty program becomes more valuable when it unlocks benefits beyond your own business.
7. Target Circle: Multi-Channel Accessibility
Target's Circle program balances digital convenience with in-store accessibility.
How it works: Members earn 1% back on purchases (5% with Target's credit card), redeemable on future shopping. The program works through app, phone number, or website—multiple access points for different preferences.
What makes it effective:
Low friction: No app required—phone number works at checkout. This removes barriers for less tech-comfortable customers.
Targeted offers: Personalised deals based on purchase history, delivered through app or email.
Birthday perks: 5% birthday discount creates annual touchpoint.
Receipt recovery: Forgot to scan? Enter receipts within seven days to capture missed rewards.
Lesson for small businesses: Accessibility matters. Not everyone wants to download an app. Perkstar's wallet integration strikes a balance—digital convenience without separate app downloads. Cards save to Apple Wallet or Google Wallet, always accessible but not cluttering phone screens.
8. Local Bakery: The Power of Simplicity
Not every effective program comes from a global brand. Local bakeries, cafés, and shops run successful programs with minimal complexity.
How it works: Simple punch cards—earn a stamp with each purchase, receive a free item after a set number. No apps, no points calculations, no tiers.
What makes it effective:
Immediate understanding: No explanation needed. Buy, get stamp, accumulate, redeem. Everyone understands instantly. That straightforward earn-and-redeem mechanic is why punch card loyalty programs remain among the most effective formats for independent food businesses, even as digital alternatives proliferate.
Tangible progress: Watching stamps accumulate provides visual satisfaction. Progress is obvious and motivating.
Low operational burden: Staff stamp cards without logging into systems or troubleshooting technology.
Human connection: The exchange—handing over a card, receiving a stamp—creates a small moment of interaction. For bakeries specifically, where products have a 24-hour shelf life and waste eats directly into margins, building loyalty that drives daily visits can be the difference between profitability and slow decline.
Lesson for small businesses: Simple works. Digital versions of punch cards (like Perkstar's stamp cards) retain simplicity while adding benefits: cards can't be lost, progress is always visible, and you gain data insights. But the core concept—straightforward earning toward a clear reward—remains powerful.
9. Referral Programs: Customers as Advocates
Some businesses build loyalty through referral programs rather than (or alongside) purchase rewards.
How it works: Customers receive incentives for bringing in new customers. Both referrer and referred often receive rewards—mutual benefit that encourages sharing.
What makes it effective:
Trust transfer: Recommendations from friends carry more weight than any advertising. Referred customers arrive with built-in trust.
Acquisition efficiency: Customer acquisition through referrals typically costs less than advertising and produces higher-quality customers.
Social proof: Being referred implies the business is worth recommending—a form of validation. This dynamic has only intensified as social media amplifies customer loyalty—a single tagged photo or story from a satisfied customer can reach hundreds of local prospects who trust that person's taste far more than any paid advertisement.
Research shows that over 90% of consumers trust recommendations from people they know—making referral programs among the most effective growth tools available.
Lesson for small businesses: Referral rewards can layer onto any loyalty structure. "Bring a friend who joins our program, both of you get a free drink." Perkstar's stamp cards can accommodate referral bonuses—extra stamps when members bring new signups.
Common Threads: What These Programs Share
Despite different structures, successful programs share characteristics:
Clear value: Customers understand what they get and believe it's worth participating.
Achievable rewards: Thresholds feel reachable, not impossibly distant.
Brand alignment: Programs feel authentic to the business and its customers.
Communication: Members hear from the program regularly—not spam, but valuable updates.
Evolution: Programs improve over time based on what works and what doesn't.
Applying These Lessons to Your Business
You're probably not Amazon or Starbucks. But you can apply their principles:
From Starbucks: Use data to personalise. Know your customers. Communicate relevantly.
From Sephora: Offer redemption flexibility. Let customers choose what matters to them.
From Amazon: Consider whether paid membership makes sense for your model.
From The North Face: Reward behaviours you want to encourage, not just purchases.
From REI: Connect your program to values your customers share.
From Marriott: Explore local partnerships that expand your program's value. Above all, remember that a loyalty program is a tool, not a strategy—building genuine customer loyalty starts with consistently great experiences that give people a reason to come back before any points or rewards enter the picture.
From Target: Make participation accessible through multiple channels.
From local bakeries: Don't overcomplicate. Simple programs work.
From referral programs: Turn customers into advocates through mutual benefit.
Getting Started
Ready to build your own loyalty program? Here's a practical path:
Define your goal: Visit frequency? Transaction value? Customer retention? Referrals?
Choose your structure: Stamps for simplicity, points for flexibility, memberships for commitment.
Design compelling rewards: What do your customers actually want?
Select your platform: Perkstar offers stamps, points, memberships, and more—with wallet integration for frictionless customer experience.
Train your team: Staff enthusiasm drives participation.
Launch and promote: Make the program visible and desirable.
Monitor and improve: Use data to refine over time.
Perkstar's 14-day free trial lets you build and test your program with real customers before committing.
Start your free trial at Perkstar →
The best loyalty programs create genuine connection—not just transactional incentive. Design yours thoughtfully, and customers will reward you with exactly what you're seeking: loyalty.
