8 Best Tiered Loyalty Program Examples for Customer Retention

Many of us have been part of a loyalty program, whether it’s punch cards at the local coffee shop or airline miles from credit card companies. In fact, there are more than 1 billion members worldwide currently opted into some kind of reward point system.

Consumers are becoming more aware of the importance of being rewarded for their business and they want a reason to continue doing business with you. The question becomes: how do you set up a loyalty system to help strengthen customer retention, and strike a balance between incentive and experience-led loyalty? 

Keep reading to find some of the most powerful tactics that will help you keep your loyal customers engaged and coming back for more.

A tiered loyalty program offers different benefits or discounts to specific groups of buyers according to their spending levels. Basically, customers are provided rewards for every purchase, incentivizing them to spend more.

Once a customer reaches a certain level of spending, he or she will unlock new perks and benefits. Incentives offered are in the form of discounts, coupons, gift cards, free items, or even points/miles on credit cards. The more customers spend, the more rewards they can obtain.

This kind of reward-based loyalty program is effective as it establishes an emotional connection with customers, which allows for deeper loyalty and long-term engagement. To illustrate how important your most valued customers are to your business, you can strategically offer them more exciting rewards.

Do tiered loyalty programs work?

Yes, tiered loyalty programs are highly effective—when executed correctly. Research shows that customers respond positively to programs that make them feel rewarded and appreciated for their loyalty. Let’s take a closer look at what makes these programs so valuable to brands:

• Encourage repeat purchases: As customers move through the tiers, they unlock greater rewards, incentivizing continued engagement.
• Build emotional loyalty: Customers feel a sense of accomplishment and exclusivity when they progress to higher tiers.
• Segmented engagement: Brands can tailor perks and communication strategies based on tier levels, ensuring personalized interactions.

For instance, tiered membership programs like Sephora’s Beauty Insider or Starbucks Rewards have successfully created communities of loyal customers who are motivated to spend more to unlock premium benefits. These programs thrive on transparency, offering clear pathways for customers to achieve higher levels and enjoy the accompanying perks.

What is the difference between points and tiered reward systems?

While points-based systems and tiered reward systems both aim to build customer loyalty, they differ in structure and purpose:

Points-based loyalty programs

• How they work: Customers earn points for every purchase, which can later be redeemed for rewards such as discounts or free products.
• Focus: Immediate gratification. Customers see tangible benefits with every transaction.
• Example: A coffee shop might offer a stamp card, with one free drink for every 10 purchased.

Tiered loyalty programs

• How they work: Customers advance through tiers based on cumulative spending or engagement, with higher tiers offering better rewards.
• Focus: Long-term engagement. Customers are motivated to invest in the brand over time to unlock premium benefits.
• Example: A beauty retailer might offer basic perks in the Bronze tier and exclusive product launches in the Gold tier.

In some cases, brands combine both approaches, using points to track progress within a tiered system. For example, customers earn points for purchases, and accumulating a certain number of points moves them to the next tier. Hybrid models like these combine the benefits of both points-based and tiered loyalty programs, creating a well-rounded loyalty strategy. 

Benefits of a tiered loyalty program

Tiered loyalty programs do more than simply reward customers for their purchases – they’re truly powerful tools for driving long-term engagement, powering retention and cultivating unshakeable loyalty. Here are some of the key benefits of implementing a tiered loyalty program:

• Encourages increased spending: Customers are motivated to spend more to reach the next tier and unlock exclusive benefits. This gamified structure not only boosts sales but also creates a sense of achievement that deepens their connection to your brand.
• Strengthens emotional loyalty: By offering exclusive perks at higher tiers, such as personalized discounts, free gifts, or VIP experiences, you make customers feel valued and special. This emotional loyalty encourages them to stay with your brand even in a competitive market.
• Enhances personalization: Tiered programs naturally segment customers based on their purchasing behavior, allowing brands to deliver targeted offers and personalized experiences at each level. For instance, a Gold-tier member might receive early access to sales, while Silver-tier members could earn double points during promotional periods.
• Drives brand advocacy: Customers in the highest tiers often become your strongest advocates. Offering premium benefits, such as referral bonuses or invitations to exclusive events, encourages them to promote your brand to friends and family.

Leverage customer data with Emarsys

With Emarsys’ Customer Data solution, businesses can take their tiered loyalty programs to the next level. By collecting and analyzing customer behavior and preferences across all touchpoints, companies can:

• Tailor rewards to customer segments: Use insights to ensure that the rewards offered at each tier resonate with the interests and purchasing habits of different customer groups. For instance, a fashion retailer might offer free shipping to all tiers but reserve early product launches for top-tier members.
• Optimize engagement strategies: Identify which benefits drive the most engagement and adjust your tier structure to maximize participation and satisfaction.
• Personalize communication: Deliver targeted messaging for each tier, ensuring that every customer feels valued and understood.

When tiered loyalty programs are data-driven and personalized, they go beyond transactional rewards, fostering meaningful relationships that drive long-term loyalty and sustainable growth.

A well-structured tiered loyalty program engages customers by offering meaningful rewards and incentives at every level, fostering long-term relationships. With Emarsys’s personalization features, brands can craft unique offers for each loyalty level, ensuring customers feel valued throughout their journey. By leveraging Emarsys’s Customer Data solution, businesses can define tier qualifications based on real engagement metrics, ensuring tiers align with customer behavior and drive meaningful outcomes.

Tier system

Tier systems provide the foundation for any loyalty program, offering clear paths for customers to progress and unlock rewards.

Points serve as the currency of most tiered programs, enabling customers to move through the levels. For instance, every $1 spent might earn one point, and accumulating a certain number of points unlocks access to higher-tier benefits. This gamified approach keeps customers engaged and motivated to spend more.

Tier qualifications

To maintain the integrity and allure of a tiered loyalty program, clear criteria for progression are essential.

Define tier qualifications based on spend, engagement, or a combination of both. For example, a Silver member may need to spend $500 annually, while a Gold member might require $1,000. With Emarsys’ Customer Data solution, businesses can track customer activity across all channels to set tier thresholds that reflect real customer behavior.

Rewards and benefits

These are the backbone of your loyalty program. On top of the psychology of climbing tiers, they’re what will keep your customers coming back. The rewards and benefits at each tier should grow increasingly attractive, incentivizing customers to climb the loyalty ladder.

• Types of rewards offered at different tiers: Rewards can range from exclusive discounts and free shipping at lower tiers to premium benefits such as personalized gifts or VIP experiences at higher levels.
• Top-tier rewards: Offer exceptional benefits like early access to sales, priority customer service, or invitations to exclusive events. These perks create a sense of exclusivity and emotional loyalty among top-tier members.

Personalized offers

Personalized offers elevate loyalty programs by tailoring benefits to each customer’s preferences, fostering deeper connections. Personalized rewards make customers feel recognized and valued.

For example: A customer who frequently purchases skincare might receive tailored offers for exclusive beauty products.

With Emarsys’ Customer Loyalty features, businesses can design personalized offers for each loyalty tier. By analyzing purchase history, engagement metrics, and preferences, brands can deliver rewards that resonate with customers, encouraging progression through the tiers and maximizing satisfaction.

Expiration policies

Clear expiration timelines on points or tier statuses encourage customers to act quickly, driving repeat purchases and ongoing engagement. For example, “Your Gold status will expire in 30 days unless you earn 100 more points” prompts customers to make additional purchases to maintain their tier.

Strategically implemented expiration policies can add a sense of urgency without deterring customers, ensuring your program remains dynamic and engaging.

By incorporating these key components, you can create a tiered loyalty program that not only attracts new customers but also deepens your relationships with existing ones. 

Plus, with Emarsys’ comprehensive solutions, building an effective and data-driven loyalty program becomes straightforward and impactful.

Looking for some tiered loyalty program examples to inspire your strategy? In this section, we’ll explore examples from leading brands:

1. Lancôme 💄

Lancôme’s Elite Rewards tiered loyalty program makes it easy to earn points. Members earn 10 points for every dollar spent, 50 points for connecting with Lancôme on social media, and 100 points if they share more about themselves. 

Depending on the tier — Rose Gold, Gold, or Platinum — members can receive early access to products, a ShopRunner™  membership, and invitations to Lancôme parties and events.

2. Southwest Airlines ✈️

The Southwest Rapid Rewards® program rewards members with points they can use for flights or with select Southwest partners. 

Southwest offers three tiers: A-List, A-List Preferred, and Companion Pass. To qualify for any of these tiers, a member must earn a specific number of points in a calendar year, or take a set number of Southwest flights. 

For example, to qualify for the A-List status (the easiest tier to achieve) a member must earn 35,000 Rapid Rewards points in a calendar year, or fly 25 Southwest flights.

Southwest Rapid Rewards is considered one of the best mileage programs for domestic flights.

3. American Express 💳 & exclusivity

Although different from other rewards plans, the American Express “Black Card” — known as the Centurion Card® — is available only to those who AMEX invites to apply.

The card has no credit limit, allowing members to spend as much as they desire each month, so long as they pay it back within a month. Members gain access to popular events including sporting events, concerts, theater shows, VIP events, and perks from airline companies, hotels, airports, car rental companies, and even shopping sprees.

4. Philosophy and gamification

The beauty brand philosophy has found a way to leverage gamification to entice members of philosophers rewards to make it to their next tier.

philosophy’s rewards program is divided into three different tiers that give points to customers for every purchase. By joining a higher tier, customers can enjoy special sales days plus free shipping. Any rewards member can gain extra points for reviews, referrals, and by connecting on social media.

In a monthly email to members, philosophy includes a gamified “Gratitude Meter” that lets them know how close they are to the next tier of rewards, as well as offering items based on shopping habits that can help them achieve the next tier.

5. Total Tools 🧰

In Australia, Total Tools is the largest professional tool retailer. Loyalty members earn Insider Rewards for making in-store and online purchases. The program offers three tiers — Bronze, Silver, and Gold — and provides members with exclusive member-only deals, event invitations, bonus offers, dollar amount rewards for specific tiers, and much more.

6. Innovasport ⚽

Innovasport is the leading sporting goods retailer for men and women in Mexico. Their tiered rewards program called Legends gives customers access to events and other special benefits such as raffle entries by dividing them into low, medium, and high spender tiers.

Customers can use their phone to get credit for in-store purchases through a QR code, redeem rewards, and gain access to real-time loyalty updates.

7. Sam’s Club and membership Programs 🛒

A basic membership program is meant to collect customer information so that you can use it to personalize the shopping experience users have with your brand. It isn’t based on any type of reward or incentive.

These programs are often seen with financial services, members-only clubs, or large retail chains like Costco and Sam’s Club where customers can choose from a number of membership levels, all with varying benefits.

Premium loyalty program members are 60% likely to spend more on your brand, whereas free loyalty program members are only 30% likely to do so.

8. Nordstrom and experiential rewards 👚

Experiential rewards help customers get placed in a higher tier. Customer data helps you put together the right type of experience for them and measure their effectiveness.

A great experiential reward example is Nordstrom’s Nordy Club rewards where one specific tier of customers receive an in-home visit from a stylist.

Designing an effective tiered loyalty program requires a strategic approach that prioritizes customer needs while aligning with business objectives. Here are some best practices to guide your program design:

1. Set clear goals and objectives

Define what success looks like for your loyalty program. Whether your goals are to increase repeat purchases, drive higher average order values, or boost customer lifetime value, having measurable objectives ensures your program remains focused and effective.

How Emarsys helps: Customer Data analytics enable businesses to set achievable goals based on real-time insights into customer behavior and preferences.

2. Understand your customer base

To create a program that truly engages your audience, start with a deep understanding of your customer demographics, purchase habits, and preferences.

• Segment your customer base to identify unique needs and tailor rewards accordingly.
• Use customer insights to design tiers that resonate with different segments.

Pro tip: By leveraging Emarsys’ Customer Data analytics, businesses can create data-driven programs that resonate with customers and foster long-term engagement. 

3. Design engaging and attainable tiers

Create tier structures that motivate participation and progression. Striking the right balance between aspiration and attainability keeps customers engaged and makes it eager to advance through the ranks.

Example: Nobody likes seeing new customers getting the best deals. Offer entry-level rewards for new members to encourage sign-ups, while reserving premium benefits for top-tier customers to incentivize long-term loyalty.

4. Offer valuable rewards

The rewards you choose must be meaningful to customers, and they must hold tangible value. Focus on providing value through exclusive discounts, free shipping, early access to sales, or personalized perks.

How Emarsys supports this: The Customer Loyalty platform enables businesses to design personalized rewards based on individual preferences, increasing the perceived value of the program.

5. Ensure simplicity and transparency

A loyalty program should be easy to understand and participate in. Avoid complex rules or hidden conditions that may deter customers.

Best practices: Clearly communicate how points are earned, how tiers are achieved, and what benefits customers can expect. Transparent messaging fosters trust and encourages participation.

6. Gather and act on customer feedback

Continuously refine your loyalty program based on feedback and performance metrics. Customer input is invaluable for identifying areas of improvement and ensuring the program remains engaging.

How Emarsys adds value: The Customer Loyalty platform facilitates direct feedback from customers, helping businesses fine-tune their tier structures and offerings for optimal user satisfaction.

The fundamental objective of a loyalty program is to increase customer engagement. The more customers engage with your brand, the more likely they are to purchase. It’s important to note that many loyalty programs are ineffective because they focus solely on rewarding customers rather than engaging with them.

Some of the most well-known companies successfully using tiered loyalty programs include Southwest Airlines, Starbucks, and Sephora.

Some of the primary goals of a loyalty program are to maximize customer retention and lifetime value, engage with customers to keep them coming back, gain greater market share, build stronger customer relationships, and achieve desired business outcomes.

Make it simple for customers to sign up

Ideally, a customer should be able to sign up with your tiered-loyalty plan in about five minutes – no lengthy registration forms or ongoing commitments required – and earning points should take mere seconds.

Make program rewards easy to understand

Make sure customers understand what they are gaining in each tier. Be explicit about their rewards, so they understand what they’ll receive, and make certain customers can easily access their rewards. Customers must be able to recognize the value of each tier in order to make a purchase decision.

Make it easy to earn rewards by tailoring loyalty offers around purchases

The more relevant your offers, the better your customers will respond. The faster you provide loyalty points or benefits after a purchase, the greater the positive impact on customer behavior. Ideally, this should be instantaneous. By delaying gratification, your brand runs the risk of losing that customer altogether.

Your customers might no longer wish to hear from your brand if they’re constantly bombarded with irrelevant communications. Be sure to leverage the behavior of your customers through the first-party data you collect to provide a unique experience.

Ranking tier ideas

The names of your loyalty program tiers can significantly impact how customers perceive and engage with your program. Creative and aspirational tier names can make customers feel valued and motivate them to progress through the ranks.

Here are a few ideas for tier names:

• Classic rankings: Gold, Silver, Bronze – simple and universally understood.
• Luxury-inspired: Platinum, Diamond, Elite – evoke exclusivity and prestige.
• Experience-focused: Explorer, Voyager, Pioneer – ideal for travel or adventure brands.
• Brand-aligned: Choose names that reflect your brand identity, such as “Coffee Lover” for a coffee retailer or “DIY Expert” for a home improvement store.

Crafting a tiered loyalty program that truly engages customers demands a data-driven strategy that aligns with your customers’ preferences and behaviors. By integrating Emarsys’s advanced solutions into your loyalty framework, you can create a program that not only fosters stronger relationships but also delivers measurable business outcomes.

Key takeaways from the article:

• Set clear goals for your loyalty program to maximize engagement, retention, and customer lifetime value.
• Tailor your tiers and rewards to resonate with your customer base, making each level feel meaningful and attainable.
• Leverage customer data to personalize offers, ensuring relevance at every stage of the loyalty journey.
• Simplify the user experience by making rewards easy to understand, accessible, and achievable.
• Continuously refine your program based on real-time insights and customer feedback.

How Emarsys supports your loyalty strategy

With Emarsys, you gain access to an ecosystem of tools designed to help you build and optimize successful tiered loyalty programs:

• Customer Loyalty Solution: Enables you to create flexible and personalized loyalty tiers with rewards tailored to customer behaviors and preferences.
• Customer Data Platform: Unifies and analyzes first-party data, giving you the insights you need to design loyalty programs that resonate with diverse customer segments.
• Reporting and Analytics: Tracks loyalty program performance, helping you identify what works and refine your strategy for ongoing success.