The best loyalty programs don’t feel like loyalty programs
There’s a quiet but meaningful shift happening in how the best brands build relationships with their most valuable asset, their people.
Ask a devoted Nike Run Club member why they keep coming back and they won’t mention points or discounts. They’ll mention the constant community building, like their recent run-to-pay-your-rent activation that brought New Yorkers together around a common cause we all feel: that monthly rent check.
Ask an e.l.f. Beauty fan, what keeps them engaged and they won’t cite a tier chart. They’ll point to the steady exchange between the brand and its community, including recent product launches shaped by specific moments, such as the Minnesota State Fair collection. They’ll talk about feeling seen, being part of something and most importantly, a brand that seems to actually know them, not just track them.
That distinction, between being known and being tracked, is where the real opportunity lives across digital, social and 1:1 lines of communication. It starts with how brands think about the relationship itself. The best programs have stopped thinking of themselves as loyalty programs at all. They’re membership clubs that use a gamified approach to stoke participation.
The mechanics are a means, not the message
Traditional loyalty programs were built on a simple behavioral premise: reward spending, repeat spending. The architecture made sense and it still does. But consumers, particularly younger ones, are getting smarter about what they want from brands and demanding more and transactional mechanics alone aren’t enough to sustain a real relationship. Today’s younger shopper is spending less yet expecting more.
Loyalty has the potential to move consumers beyond a purely transactional relationship. In a Harris Poll study on brand connection, 45% of consumers feel appreciated and valued by brands through loyalty program participation, while its broader consumer research shows people increasingly see brand and retail interactions as part of their social lives, valuing them for the community and inspiration they create.
And yet most programs are still designed around the old model: earn, accumulate, redeem. Maybe skip the line here or get an extra discount there. Perhaps a ticket to an ‘exclusive’ feeling experience, like an airline lounge or a concert, can start to feel more broadly distributed than genuinely rewarding. That loop drives transactions. It does less to build a relationship or a sense of membership.
From program to club: the power of ongoing dialogue
A program optimized for redemption is not the same as a program that earns genuine loyalty. One trains people to chase rewards. The other makes people feel they belong to something and that belonging is maintained through consistent and two-way dialogue, not periodic promotional emails.
The brands doing this well understand that membership isn’t a status you achieve after enough spending. It’s a feeling reinforced each time the brand shows up with something relevant, useful or unexpected.
Contribution over consumption
Fans don’t want more marketing. They understand it’s part of the exchange with brands, but they’re already oversaturated with day-to-day marketing, so marketing itself is not the value proposition. They want to be involved. They want recognition for their loyalty, not promotions as a response to it. When a brand’s version of rewarding loyalty is a discount code, it signals that the relationship is still one-directional. The brand is extracting value, not creating it together.
The programs creating genuine engagement flip this by turning members into participants. T-Mobile treats loyalty as more than a points system, offering perks and entertainment, such as priority network access and experiences that communicate genuine investment in the relationship.
American Express has long understood that its best cardholders don’t want more cashback; they want access, recognition and the sense that Amex is working for them. The concierge, the early access, the invitation-only events, for example. These benefits do more than reward spending. They communicate that the cardholder’s continued presence has value. It feels less like a credit card rewards program and more like a club with real benefits and a brand that’s actively maintaining the relationship.
What we can take forward
The mechanics of a loyalty program, the points, the tiers and the redemption flows are infrastructure. Important ones at the end of the day that we can’t turn our backs on. They’re necessary, but they’re not the relationship. The relationship is built in every interaction that makes a customer feel like the brand knows them, values their presence and is genuinely invested in keeping them close.
The shift from loyalty program to membership club isn’t just semantic. It changes the cadence of communication, the nature of the rewards and the expectations on both sides. Members expect to be heard. They expect access and recognition that feels earned, not automated. And they expect the brand to show up consistently, not just when there’s something to sell.
The most engaged member bases belong to brands that have made that commitment. Consumers are increasingly aware of the difference between a program designed to extract value and one designed to genuinely reciprocate it.
That’s the bar. Not ‘did they redeem?’ but ‘did the brand give them a reason to feel that they belong?’ Build toward the second question, and the first takes care of itself.
