Effective Tiered Reward Levels and Benefits Guide

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Nikita Mathur
July 7, 2025
5 min read
top 5 key benefits of integrating a loyalty program with shopify
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The Best Tiered Loyalty Programs and Examples for 2025

Tiered loyalty programs have become a favorite among most of the world’s well-known brands and store chains. Adidas’ adiClub, Starbucks Rewards, and DSW’s VIP Program are just a few examples that come to mind.

It’s a move that is relatively new in the e-commerce space and one that is quite adept at keeping customers engaged. 84% of consumers say they’re more likely to stay loyal to a brand that offers loyalty programs, and 68% are willing to join loyalty programs for brands they like. 

So what exactly are tiered loyalty programs, and how can you build one that boosts customer engagement and increases retention for your Shopify store?

This guide will walk you through all you need to know about this fancy new strategy for customer engagement, what makes them work, and how to build one that resonates with your audience. We’ll also look at some real-world examples from brands doing it well, so you can learn from the best.

Let’s break it down.

What is a Tiered Loyalty Program?

A tiered loyalty program is a customer engagement and retention strategy that rewards shoppers based on their ongoing relationship with a brand. Instead of offering the same perks to everyone, tiered programs divide rewards into levels, often based on how much a customer spends, how often they shop, or how engaged they are with your brand.

The more a customer interacts with your store, the higher they climb, and the better the benefits get. This model differs from traditional loyalty programs, where all customers earn and redeem points equally, regardless of their purchase behavior.

While points-based systems are great for rewarding transactions, they don’t necessarily encourage long-term engagement. Tiered programs, on the other hand, tap into the psychology of progress, status, and exclusivity, three powerful motivators that keep customers coming back.

Why they work?

  • Drives repeat purchases: When customers know they’re just one step away from unlocking better perks, they’re more motivated to make that next purchase.
  • Taps into exclusivity and status: This goes beyond simple rewards and lets customers earn their place in something special. Higher tiers create a sense of prestige and a feeling of belonging.
  • Builds emotional loyalty: Tiered programs make customers feel seen and appreciated. They feel like more than a casual shopper, and something closer to a VIP in your store.
  • Encourages long-term engagement: The structured path gives shoppers clear goals to work toward, which naturally leads to more frequent and higher-value interactions.
  • Scales with customer value: As customers spend more or engage more, the rewards grow with them, making it easier to justify bigger purchases and stick with your brand over time.

What are Reward Levels?

Reward levels, or tiers, are the structured milestones within a loyalty program that customers move through as they engage more with your brand. These levels typically have names that reflect status or exclusivity, such as Bronze, Silver, Gold, and Platinum.

Each tier unlocks a new set of perks, with higher levels offering more valuable or personalized rewards. Progression can be based on spend, activity, or points earned.

Clear tier criteria give customers something to aim for, and that’s when the magic happens. This sense of achievement fuels continued engagement.

Let’s take Adidas’ adiClub as an example. Their program has four tiers:

  • Level 1: Welcome bonus, free delivery, and members‑only product access, plus early access to exclusive drops and sales.
  • Level 2: Birthday gifts, three months of premium access to the Adidas Running/Training apps, and members‑only sales and surprise bonuses.
  • Level 3: Early access to new products, priority customer service, along with free personalization on select products and extra surprise bonuses.
  • Level 4: Tickets to exclusive events, hype-priority access to limited drops, and 12 months of free premium access to Adidas apps, plus surprise bonuses.

This kind of structure gives customers a reason to increase their engagement and spend more to reach the next level. It’s a win-win: they feel rewarded, and you see higher lifetime value. So, now that you know what a tiered loyalty program is and how reward levels engage customers, how do you build one for yourself that takes your Shopify store to new heights?

Also read: Why Loyalty Programs Are Key to Scaling Your Shopify DTC Store in 2025

How to Create an Engaging Tiered Loyalty Program

How to Create an Engaging Tiered Loyalty Program
How to Create an Engaging Tiered Loyalty Program

Building a tiered loyalty program that works means designing a customer journey that feels rewarding, motivating, and easy to follow. To create a structure that drives engagement and retention, you need to balance simplicity with real value. 

Here are five core practices to keep in mind as you build your program:

1. Define the Behaviors You Want to Reward

Start by identifying what actions you want to encourage: purchases, referrals, product reviews, social shares, or a mix. Your reward structure should align with your goals and make customers feel directly recognized for those actions.

2. Set the Right Number of Tiers

Three to five tiers typically strike the best balance between simplicity and motivation. Make sure your first tier is easily accessible, and reserve the top tier for your most loyal customers. Use your store’s purchase data to set realistic thresholds for advancement.

3. Explain How It Works

Make it crystal clear how customers can join, earn, and progress. Add an easy-to-find loyalty program explanatory page on your site with a breakdown of tiers, points, and perks. Let shoppers know what actions help them rise to the next level, like hitting a certain spend or making multiple purchases.

4. Make Benefits Clearly Differentiated

Each level should offer unique and increasingly valuable perks, whether that’s early access to drops, free shipping, or exclusive discounts. This encourages customers to work toward higher status and feel rewarded at every stage.

5. Communicate Progress with Personal Touches

Use targeted emails or in-store messages to notify customers when they’re close to the next tier or at risk of dropping down. These nudges foster a sense of belonging and keep your brand top of mind.

6. Give Your Program a Memorable Name

Your loyalty program should feel like a branded experience. A catchy name, like Beauty Insider (Sephora) or Ultamate Rewards (Ulta), helps you stand out and builds a sense of community around your brand.

7. Monitor, Optimize, and Stay Customer-Centric

Listen to your customers; look at reviews often to understand if they find any aspect of your loyalty program confusing or unappealing. Track how members engage with your program, watch for drop-offs, and listen to feedback. Loyalty programs should evolve, so keep refining benefits and communication to stay aligned with customer expectations.

By combining clear structure with thoughtful rewards and communication, you can create a tiered loyalty program that feels effortless for your customers and is invaluable for your brand.

Now, let’s take a look at how some of the world’s leading brands are doing it right and what you can learn from their loyalty programs.

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Also read: What Is Loyalty Management? Benefits & Tips for D2C Brands in 2025

The Best Tiered Loyalty Programs From Industry Giants

The Best Tiered Loyalty Programs From Industry Giants
The Best Tiered Loyalty Programs From Industry Giants

Let’s look at five leading brands that are getting it right. Each of these companies has crafted a tiered loyalty program that not only drives revenue but also delivers memorable customer experiences. Here’s how they’re winning with structure, strategy, and standout perks.

Sephora’s Beauty Insider

Sephora’s loyalty program, Beauty Insider, is a gold standard in beauty retail, combining points with status-driven tiers that feel aspirational. Built around points and perks, the program taps into both emotional loyalty and aspirational value.

Tiers:

  • Insider: Free to join; access to birthday gifts and seasonal savings events
  • VIB (Very Important Beauty Insider): After spending $350/year, 10% off during special events, and more luxurious birthday gifts
  • Rouge: After spending $1,000/year, early access to product launches, free standard shipping, and exclusive Rouge-only events

Beauty Insider isn’t just about discounts but about delivering a beauty experience. Members earn 1 point per $1 spent, which they can redeem for product samples, exclusive sets, or savings. Sephora also offers a Rewards Bazaar, where higher-tier members can use points for limited-edition items or VIP experiences.

World of Hyatt

A perfect example of tiered loyalty in the travel space, Hyatt’s program incentivizes both frequency and spend across its global properties. Its tiered structure blends recognition, benefits, and experiential perks to reward both occasional travelers and seasoned globetrotters.

Tiers:

  • Member: Free to join; access to discounted member rates, free Wi-Fi, and mobile check-in
  • Discoverist: After 10 nights or 25,000 base points, late checkout, preferred rooms, and premium internet
  • Explorist: After 30 nights or 50,000 base points, room upgrades (excluding suites), 2 Club lounge access awards, and 20% bonus points
  • Globalist: After 60 nights or 100,000 base points, suite upgrades, waived resort fees, Club lounge access, 30% bonus points, and 4 pm late checkout

World of Hyatt excels at recognizing loyal guests with benefits that go beyond the stay. As members move up the tiers, they receive meaningful upgrades like suite access, guaranteed late checkouts, and exclusive lounges. The program is known for its transparency and generosity, particularly at the Globalist level, where members often enjoy VIP-like treatment. 

Domino’s Rewards

Domino’s has revamped its loyalty experience to better serve today’s fast-paced, value-conscious customers. With the transition from “Piece of the Pie Rewards” to the more flexible Domino’s Rewards, the program now focuses on a broader appeal.

Tiers (Redemption Levels):

  • 20 Points: Free Dipping Cup, Parmesan Bread Bites (16 pcs), or a 20 oz. Drink
  • 40 Points: Free Bread Twists or Stuffed Cheesy Bread
  • 60 Points: Free Medium 2-Topping Pizza, Pasta, Oven-Baked Sandwich, or Chocolate Lava Crunch Cakes (3 pcs)

Domino’s makes loyalty feel instantly rewarding by lowering the point-earning threshold to just $5 per order (down from $10), making it easier for customers with smaller orders to rack up points. Only one order per day counts, but that simplicity keeps the system streamlined.

Marriott’s Bonvoy

As one of the world’s most recognized hospitality brands, Marriott uses its Marriott Bonvoy program to turn hotel stays into long-term customer relationships.

Tiers:

  • Member: Entry-level access with mobile check-in, free Wi-Fi, and exclusive member rates
  • Silver Elite: After 10 qualifying nights, priority late checkout, and 10% bonus points
  • Gold Elite: After 25 nights, enhanced room upgrades and 25% bonus points
  • Platinum Elite: After 50 nights, lounge access, welcome gifts, and 50% bonus points
  • Titanium Elite: After 75 nights, a 48-hour room guarantee and 75% bonus points
  • Ambassador Elite: After 100 nights + $23,000 in annual spend; includes personalized Ambassador service and Your24 check-in flexibility

Bonvoy is designed for travelers who value both luxury and flexibility. As guests move up the ladder, the benefits shift from simple perks to highly personalized experiences. What sets Marriott’s program apart is its blend of aspirational and functional rewards. The program spans over 30 hotel brands, from budget-friendly options to premium resorts, so there’s something for every traveler type.

Total Tools’ Insider Rewards

For tradies, DIYers, and professionals who live by their toolbox, Total Tools’ Insider Rewards program delivers a tailored loyalty experience.

Tiers:

  • Insider Bronze: Entry-level tier for new or casual spenders
  • Insider Silver: Mid-tier for customers who meet the annual spending threshold
  • Insider Gold: Top tier, reserved for high-spending, loyal customers

Insider Rewards makes loyalty feel straightforward and rewarding. Members earn 1 point for every $1 spent, both in-store and online, and can redeem those points on a wide range of Total Tools products. Unlike programs that rely on complex point multipliers or app engagement, this one stays true to its customer base by focusing on direct, tangible value.

These industry leaders show that tiered loyalty programs aren’t just about points but about building lasting relationships through thoughtful perks, clear progression, and brand-aligned experiences.

If you're looking to create something just as effective for your own store, Nector makes it simple to launch and manage a tiered rewards program that keeps customers engaged and coming back.

Don’ts of Tiered Loyalty Programs

Avoid these common mistakes when designing and running your tiered loyalty program:

  • Setting unrealistic tier thresholds
    High spending or engagement requirements can discourage participation. If tiers feel unattainable, customers are less likely to engage.
  • Failing to differentiate rewards across tiers
    If every tier offers similar benefits, there is no real incentive for customers to move up. Each level should deliver increased value and exclusivity.
  • Overcomplicating the program structure
    Complex rules, confusing point systems, and unclear progression criteria can lead to customer frustration. Simplicity drives adoption and engagement.
  • Neglecting non-transactional engagement
    Loyalty should not be limited to purchases. Failing to reward actions like referrals, reviews, or social sharing misses opportunities to increase participation.
  • Not communicating progress or tier status
    Customers should be regularly informed of their current tier, progress toward the next level, and upcoming rewards. Lack of communication can reduce motivation.
  • Providing low-value or generic rewards
    Rewards that lack relevance or perceived value will not inspire loyalty. Ensure rewards align with customer expectations and reflect the value they bring to your brand.
  • Ignoring customer data and feedback
    Programs that are not optimized based on performance and customer insights tend to stagnate. Continuous improvement is key to long-term effectiveness.
  • Failing to personalize the experience
    Uniform messaging and offers can make even the most loyal customers feel unrecognized. Personalization strengthens emotional loyalty and improves retention.
  • Letting the program become static
    Loyalty programs should evolve with customer behavior and market trends. A lack of updates can lead to disengagement over time.

A well-designed loyalty program requires more than just attractive rewards. By avoiding these common pitfalls, you create a structure that builds trust, encourages ongoing engagement, and delivers lasting value to your customers.

A Loyalty Strategy That Grows With You

One of our clients, a leading cosmeceutical brand, came to Nector with a challenge: how to increase repeat purchases without complicating the customer journey. Their audience was already engaged, but the brand needed a way to reward that loyalty in a meaningful, ongoing way.

Instead of relying on generic rewards or rigid program structures, they used Nector to build a flexible tiered system that encouraged referrals, reviews, and redemptions at every step of the journey. With Shopify Plus and seamless integrations across Stamped, Klaviyo, and GoKwik, they crafted a loyalty experience that didn’t just sit on the sidelines; it actively drove revenue.

In just a few months, the results spoke for themselves:

  • 9.63% of all orders were influenced by loyalty rewards
  • 50.16% of repeat buyers engaged with the loyalty program
  • 20.63% of earned coins were redeemed
  • 17.31% referral conversion rate
  • $35,000+ in revenue attributed directly to the program

Their story is just one example of what’s possible when your loyalty program is built around your customers, not the other way around.

Ready to build a program that delivers real retention, not just rewards?
With Nector, you’re not plugging into a template; you’re creating a loyalty ecosystem tailored to your brand, customers, and growth goals.

Book a demo

Wrapping Up

A good and engaging tiered loyalty program with enticing reward levels should give customers the right kind of value at the right time. The best programs drive repeat purchases, build emotional connections, and keep customers engaged with experiences that evolve alongside them.

Nector gives you the tools to design loyalty on your terms. Create custom tiers, reward more than just transactions, and integrate with the platforms you already use. With Nector, every interaction becomes an opportunity to grow your brand and your customer base. Ready to maximize customer engagement? Book a demo with Nector and see how you can launch a fully customized loyalty program tailored to your brand.

FAQs

What are Tiered Loyalty Programs?

Tiered loyalty programs reward customers based on their level of engagement or spending. As customers move up through different tiers, they unlock better perks, like early access, bigger discounts, or exclusive offers.

What are reward levels?

Reward levels are the specific thresholds within a loyalty program that determine what benefits a customer receives. These levels are often tied to spend, points earned, or actions taken. The higher the level, the more valuable the rewards.

Does Starbucks have a tiered loyalty program?

Yes, Starbucks Rewards uses a simple two-tier system. Members start earning Stars with every purchase and can redeem them at various thresholds for free drinks, food, and merchandise. More Stars = better perks, like free refills or birthday rewards.

What is the McDonald's tiered loyalty program?

McDonald’s Rewards isn’t typically considered a tiered program. It lets customers earn 100 points for every $1 spent. Points can be redeemed for menu items, and after your first order, you unlock free hash browns, fries, or a drink. It's a points-based program, but without traditional tiers.

What is the most successful loyalty program?

Programs like Sephora Beauty Insider and Marriott Bonvoy are often considered among the most successful. They combine perks, personalization, and convenience in ways that keep customers engaged and consistently coming back.

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