Loyalty programs. Everyone has one. Your coffee shop. Your local pharmacy. That quirky bookstore with the cozy armchair in the back. But let’s be honest—most of them? Forgettable. A cluttered keychain or a stack of barely-used cards stuffed in your drawer. So, how do you build a loyalty program that actually works—one that customers remember, use, and even brag about? Let’s unpack the secret sauce of real customer loyalty—and spoiler alert, it’s not just giving away freebies.
Start With Why — Then Build Backward
Most loyalty programs flop because they start with the: “Let’s offer 10% off after 10 purchases!” That sounds nice, but it misses the point. Loyalty isn’t a discount—it’s a feeling. It’s the emotional connection a customer has with your brand.
So before you build anything, ask yourself: Why do people come back to us in the first place? Is it because of our quality? Our vibe? The fact that we remember their name or that we deliver faster than competitors? Your loyalty program should amplify that unique reason, not mask it with gimmicks.
Forget One-Size-Fits-All — Customize the Experience
Punch cards and generic point systems worked in the 90s. Today? They barely move the needle. We live in a personalized world. Your Netflix queue knows you better than your best friend. Your loyalty program needs to step up.
Think about segments. A first-time buyer shouldn’t be treated like a 2-year brand devotee. Offer unique rewards depending on where someone is in their customer journey.
Some ideas:
- New customers: Surprise welcome gifts or discounts for their second purchase (not the first!).
- Repeat buyers: Early access to new products or services.
- Lapsed users: Personalized “We miss you” messages with an irresistible offer.
If you really want to win, use behavioral data to drive these custom touches. The tech is out there—you just have to use it.
Go Beyond Discounts: Offer Real Value
Discounts are easy. Everyone loves a good deal, sure, but if your program is built solely on slashing prices, you’re racing to the bottom. And worse—you’re training your customers to only buy when there’s a sale.
Instead, offer value. And value isn’t always financial.
Think:
- Experiences: Private events, first dibs on new collections, birthday surprises.
- Status: Give customers tiers or badges that make them feel seen (hello, VIP gold status).
- Community: Invite them into something bigger—like a club, not just a transaction.
People crave connection. Use your loyalty program to build that, not just move inventory.
Make It Stupidly Easy
No one wants to jump through hoops to earn a free sandwich. If your loyalty program involves a manual, a download, or a complex point calculator, scrap it.
Here’s what people do want:
- Simple sign-up (preferably with one click).
- Clear rewards (no mental gymnastics).
- Easy tracking (a quick SMS or app notification saying, “Hey, you’re one step away from a reward!”).
This is where SMS marketing tools can really shine. Unlike email (which often drowns in spam folders), SMS is direct, personal, and fast. Use it to notify customers about rewards, nudge them when they’re close to unlocking something, or just send a quick “thank you.” With the right tools, you can even personalize those messages to make them feel like a thoughtful note—not a mass blast.
Reward the Behavior You Actually Want
Here’s a little-known truth: not all “loyal” customers are profitable. Some buy only during sales. Others return more items than they keep. So design your loyalty program to reward the right behaviors.
Want people to spend more per order? Offer bonus points for crossing a threshold.
Want referrals? Reward them for bringing a friend.
Want more reviews? Give them a small perk to share feedback after a purchase. Shape your program like a magnet: pull people toward actions that actually benefit your business.
Test, Tweak, Repeat
Here’s the real kicker: Your loyalty program is never done. What works today might fizzle out in six months. Consumer expectations evolve. Your competition steps up their game. So treat your loyalty program like a product, not a set-it-and-forget-it feature.
Track the data. What rewards are being redeemed? Which customers are the most engaged? Where do drop-offs happen? Then—don’t be afraid to change things. A/B test your offers. Rotate rewards. Introduce seasonal bonuses. Make it dynamic. Make it interesting. Make it feel alive.
Closing Thoughts: Loyalty Can’t Be Bought—But It Can Be Earned
The truth is loyalty doesn’t come from a free coffee or a $5 coupon. It comes from the little things: being remembered, being rewarded in meaningful ways, and being made to feel like more than just another wallet.
A great loyalty program isn’t about points. It’s about people. So, build one that speaks to your customers like humans. Make it generous, yes—but also make it smart. Use tools like SMS, personalization, and behavioral rewards to create something that doesn’t just work—but wows.
And when in doubt? Ask your customers what they would love. They’ll tell you. Then, all you have to do is listen—and deliver.