5 reasons why the world’s luxury brands have embraced loyalty programs

For decades, luxury was synonymous with exclusivity, not rewards. But the game has changed. From private jets to designer bags, the world’s most coveted brands are now building lasting relationships with their elite clientele through meticulously crafted loyalty programs. They’ve cracked the code: it’s not about devaluing their products, it’s about elevating the experience. Some of the best loyalty marketing program examples are now in luxury services.

It’s become increasingly evident over the past decade that loyalty programs work for high-end brands precisely because their main focus is providing an exclusive service to their elite clientele. In this article, we’ll highlight 5 reasons why the world’s luxury brands have embraced loyalty programs – and yours should too.

1. Exclusivity and cultural cachet

– Golden keys to brand buzz: Imagine a secret society for your most loyal fans. Offering limited-edition items, VIP events, or early access to sales makes members feel like insiders, boosting brand prestige and attracting high-value customers. This elevates brand perception and resonates with consumers drawn to aspirational experiences.
– Ambassadors with influence: Studies show 60% of loyalty program members are more likely to recommend the brand to others. Exclusivity fosters a sense of belonging and motivates members to become vocal brand advocates. This organic word-of-mouth marketing is invaluable, amplifying brand reach and attracting new customers.

Case study: American Express – Centurion

This discreet VIP benefits initiative emerged as a hallmark for the privileged few. Synonymous with exclusivity, the renowned black American Express (AMEX) credit card gave it’s clientele an aura of cultural prestige.

Specifically tailored to cater to the preferences of its members, AMEX’s offering opens doors to a range of luxury experiences that non-members can’t access. These include heightened security measures, exclusive airline privileges, and a round-the-clock concierge service

2. Tiered rewards for climbing the ladder

– Fueling spending spree: Research indicates tiered programs with targeted rewards based on spending (like higher discounts for higher tiers) can increase customer spend by 10-15%. Personalized incentives encourage members to climb the ladder, boosting both revenue and customer engagement. It’s like a gamified shopping experience, where every purchase unlocks new levels of rewards.
– Satisfaction soars with recognition: Feeling valued is key to the success of luxury loyalty programs. Studies show 84% of customers in tiered programs feel more appreciated compared to non-members. Tailored rewards based on individual preferences create a sense of recognition and improve customer satisfaction, building long-lasting relationships with your brand.

Case study: Jumeirah – Sirius

Luxury international hotel chain, Jumeirah has carefully constructed its loyalty program to appeal to its elite customers. 

They have created a tiered program. At the lower blue member level, they offer simple upgrades such as complimentary internet access, and 10% savings on the leisure facilities within their hotel. However, at the highest gold level, you are treated to airport transfers, complementary breakfasts, late check-outs, and higher savings percentages.

3. Luxury spends and experiential escapes

– Craving luxury: Luxury consumers crave unique experiences. A 2023 report revealed 72% are willing to spend more for VIP airport lounge access or exclusive travel packages. Offering such perks taps into this aspirational desire and drives spending. It’s about transforming a simple purchase into a memorable journey.
– Building customer bonds: Providing unique travel services like curated itineraries or local immersion activities cultivates deeper connections with customers and fosters brand loyalty. It’s about creating lasting memories, not just acquiring things.

Case study: Star Alliance – Frequent Flyer

The world’s largest airline network, Star Alliance, has designed an extensive tiered rewards system tailored to its customers. Gold Status members are able to access prestigious airport lounges globally, receiving priority treatment during check-in, boarding, and baggage handling.

Today, airlines know that encouraging their top clients to spend more and fly more with them, relies on them providing more of an experiential service. This is why airlines have been keyed into luxury loyalty programs for a long time.

4. Signing up and sticking around

– The points welcome mat: Our own study shows loyalty programs can increase account creation by 40%. Offering a welcome points bonus incentivizes customers to create an account and explore your brand.
– Increased touchpoints with personalized perks: Beyond initial sign-ups, experiential rewards like personalized recommendations, birthday rewards and early access to sales keep members engaged and coming back for more. This means that brands are not only engaging with their customers on a more regular basis, they’re also getting easy access to the best rewards available to make them repeat customers.

Case study: Lancôme – Elite Rewards

In a bid to match Sephora’s illustrious Beauty Insider program, Lancôme has unveiled its own lavish program—Elite Rewards. Since its introduction, the program has driven a staggering 60% of members to engage with the brand through shopping or interactions on a monthly basis, with an initial sign-up surge of nearly 40%.

Within this exclusive program, members earn 10 points for every dollar spent in online transactions, unlocking rewards faster. Additionally, they enjoy smaller yet meaningful perks, including exclusive access to upcoming sales.

5. Boosting foot traffic and shopping sprees

– Brick-and-mortar perks: Offering incentives like gift cards or bonus points for in-store purchases can drive customer growth and encourage brick-and-mortar visits. It’s like a VIP pass to a shopping party, making in-store experiences more rewarding and enticing.
– Building bridges between online and offline: Loyalty programs can bridge the gap between online and offline worlds. Points earned online can be redeemed in-store, and vice versa. This seamless integration creates a cohesive brand experience and encourages multi-channel shopping, leading to a 25% increase in total customer purchases.

Saks – SakFirst

One of the premier department store chains in the US, Saks Fifth Avenue decided to revamp its loyalty program in order to drive growth. The new additions to their program take advantage of seasonal spikes, and also offer incentives to customers that shop in-store.

The first 500 customers who signed up were given a $100 gift card, and following joiners were offered 1000 points on their first purchase, driving momentum for the new program.

Conclusion

In today’s competitive market, luxury brands have shifted gears. It’s not just about being exclusive—it’s about offering unique experiences rather than just discounts. Instead of focusing solely on prices, brands now offer things like tailored adventures or sneak peeks at coveted new products.

These luxury loyalty programs are more than just transactions. They’re personalized journeys built around what customers really want. Brands are creating experiences alongside their most dedicated customers. In this dance of engagement, the brands that create the best experiences will win over their loyal fans. Luxury loyalty isn’t just about products anymore—it’s about making every interaction feel special and memorable.