Rising through the Ranks: Exploring Loyalty Program Membership Levels

With a plethora of customization options and choices at your hands, it is easy to overlook the individual components of your new loyalty program. But one thing is clear: membership matters. Implementing membership levels in your loyalty program not only rewards loyalty – it drives long-term engagement and fosters a sense of exclusivity.

The Metal Standard of Tiers: Bronze, Silver, and Gold

Membership levels are the tiers or stages that customers can attain based on their purchasing behavior or engagement with a brand. A common tier system used by many programs is the precious metal tier system: bronze, silver, and gold. These tiers correspond to basic, intermediate, and premium levels.

The “bronze” or basic tier is the starting point where customers join the loyalty program and often includes basic benefits such as access to discounts and the ability to earn points on purchases. There is incentive to join the program – but even more incentive to move onto the next tier. How customers in your loyalty program rise through the ranks is entirely up to you, which offers a great modicum of creativity.

This brings us to the “silver” or intermediate tier, where customers now have access to additional benefits. This can include even more exclusive discounts and first access to products and services, or personalized customer service such as dedicated help at any time.

Finally, the highest tier: the “gold” tier. As the most generous tier, it can offer valuable benefits such as VIP customer service, first access to events and promotions, higher point value, or exclusive access to limited products or services.

Looking at the highest tier from the bottom – it becomes a tantalizing prospect for customers to rise through the ranks to reap the benefits of the gold tier.

What Benefits Do Membership Levels Bring?

Adding lucrative membership tiers to your loyalty program can boost customer engagement and loyalty. Tiered loyalty programs:

• Encourage customers to engage with a brand
• Motivate customers to spend more to reach the next tier
• Create a sense of exclusivity among customers
• Improve customer retention and Customer Lifetime Value (CLV)
• Foster a unique brand image
• Promote word-of-mouth marketing
• Enable data collection from customer behavior and preferences

A Perfect Match for Creative Marketing Opportunities

Gamification: meet membership tiers. Membership tiers can be a perfect opportunity to tap into a competitive customer base. The journey through reward levels does not need to be boring and there is no reason to make it so! Consider gamifying your loyalty tier system by adding:

• Point systems for engaging with brands on social media or by leaving reviews
• Visual progression bars to illustrate how close customers are to the next tier
• Award badges or ranks for customers to proudly share their level
• Unlockable rewards by completing certain tasks to advance to the next level
• Challenges and missions to promote competition
• Surprise elements to keep customers engaged and excited
• Social media sharing and engagement features to share customer achievements
• Limited time events to create a sense of urgency to motivate customers
• Leaderboards and rankings to display top customers and drive competition
• Higher personalization at higher tiers

Membership Tiers in Action: The Starbucks Reward Program

Starbucks Rewards is an example of a tiered loyalty program. It is owned by Starbucks, a popular coffeehouse chain – the largest in the world. The program offers several tiers, each with its own benefits and rewards to entice customers to engage and spend within the program to move up tiers.

The first tier is the “Welcome Level.” This is where customers start in the program and can earn points, called “stars,” for purchases, receive birthday rewards, and partake in other basic membership benefits. In the United States, customers earn 1 star per $1 spent every time they scan their member barcode. This increases to 2 stars per $1 spent when customers pay with their digital Starbucks card in the app. It is an excellent way to bring a customer into the door of a loyalty program and interact directly with a brand.

The next tier is the “Green Level,” which is reached upon earning a certain number of stars. Customers in the Green Level receive all the benefits of the previous level, with new benefits as well: they ability to redeem their stars for free food and drinks, get free refills on coffee or tea, and a new line of personalized offers made just for them. At this level, there is enough data gathered from customer habits and spending history to create personalization.

The final and highest tier is the “Gold Level” in the Starbucks Rewards loyalty program. Like the previous level, customers achieve this level by earning even more stars. They receive all the benefits of the previous levels, along with additional benefits – including a personalized gold card, rewards for every 150 stars earned, and access to exclusive offers and events.

The progression through all tiers is made visible so customers can track their progress and see how close they are to reaching the next tier. This incentivizes customers to spend more to get the next tier’s benefits, as well as giving them transparency on their points earned and where they stand in the tiered loyalty program. Progression is based on accumulation of stars.

This loyalty program encourages loyalty and repeat visits to gain more stars – and it is wildly successful. The sense of achievement and exclusivity runs parallel to moving up in the tiers.

Could a tiered loyalty program boost your brand as well?