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June 3, 2025
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Key ingredients to make a successful loyalty program
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SubscribeIt’s no secret that a well-crafted loyalty program can set you ahead in the industry. By creating a memorable user experience – through offering a variety of perks, incentives, and rewards – you give customers a reason to keep coming back for more.
With the global loyalty market expected to grow at a CAGR of 16.5% by 20301, digital and app-based approaches stand front and center as leaders in the loyalty space. Replacing many traditional strategies, such as physical reward cards, custom-tailored digital programs can allow for broader product reach, higher retention, and greater customer growth – leading to overall increased LTV and revenue.
In this article, we lay out the key ingredients to creating a digital loyalty program, highlighting the ways they are utilized across industries, the benefits of tiered loyalty programs, and the challenges faced when building a robust rewards strategy.
A loyalty program is a type of marketing strategy that rewards users for their continuous engagement – whether through repeat spending, daily use, or brand promotion. The goal of a loyalty program is to build a long-lasting relationship with your users, offering them mutually beneficial rewards in exchange for their loyalty.
In the world of mobile applications, these programs incentivize users to keep engaging on a regular basis by offering a variety of digital and real-world rewards that enhance their overall experience. App publishers use many strategies to keep users engaged – from tiered structures that give increasingly better offers, to gamified systems that add a layer of fun to the core engagement loop. These different approaches allow publishers to customize their loyalty program in order to best cater to their clientele, whether it be new users or lifelong customers.
Many different loyalty program strategies can be seen across industries, with various sectors preferring to take unique approaches that best fit their product and userbase.
The mobile gaming industry makes use of many kinds of loyalty programs to keep players engaged. From subscription models, which have users pay recurring fees to access new content, to tiered loyalty programs, in which users receive better and better rewards the more they play.
The gamification of loyalty programs lends itself well to this industry, allowing for publishers to naturally implement game-related features such as leveling, competitive leaderboards, and sweepstakes into their programs – seamlessly integrating loyalty systems into the core game loop.
Example: Supercell’s Clash of Clans operates on a “freemium” subscription model, in which players can purchase seasonal passes to unlock new content, alongside free rewards earned in-game.
👀 Related reading: From player to patron: An overview of subscription-based mobile game monetization
Travel companies often partner to offer their customers a number of rewards that can be earned through airline travel, hotel stays, and car rentals. The rewards offered by such programs usually aim to reduce costs for the consumer, making them highly attractive in such an expensive industry. In fact, they’ve become so popular that the four biggest airlines in the US have made over $20 billion in revenue2 from these loyalty programs alone.
Travel industry loyalty programs typically leverage a tiered rewards structure, in which customers can attain different loyalty statuses the more they engage with the brand – giving high spenders a sense of exclusivity and achievement.
Example: American Airlines’ AAdvantage program allows customers to accumulate loyalty points by flying or spending with business partners – which can be redeemed towards flights and accommodations.
Food delivery apps may offer a variety of rewards through point systems or subscription models, including discounts, free items, or no delivery charges. These perks help customers get more bang for their buck to turn small savings into big wins over time.
Another example within the industry is fast food chains themselves, which leverage digital loyalty cards to incentivize repeat purchases, allowing customers to get a free item after a certain number of orders. This sense of progression helps keep customers loyal, disincentivizing them from seeking out competitors. In fact, 78% of customers3 even say they are more likely to visit a restaurant that has a loyalty program, even if it is less convenient than other nearby options.
Example: Food delivery apps such as Uber Eats and DoorDash offer subscription programs that allow customers to save on tax and delivery fees with each order.
One method that retail vendors may use to promote a stronger level of loyalty is by fostering brand ambassadors. These ambassadors – who may be celebrities, influencers or everyday users – are loyal customers who will help promote your products thanks to prior positive experiences.
With the dominance of social media channels like TikTok and Instagram, nearly 61% of marketers in the US and UK4 are choosing to invest more in influencer and brand ambassador marketing – gaining access to new audiences and expanding brand reach beyond traditional marketing channels.
Example: In addition to their well-known Beauty Insiders loyalty program, Sephora offers a unique Affiliate program which allows brand ambassadors to get exclusive access to new products, limited-time promotions, and affiliate-only products.
Educational apps make use of different loyalty approaches to provide users with a number of benefits to aid them on their learning journey. Personalization in such programs can help adapt the curriculum to each student's individual needs, increasing overall academic success.
By offering new course content, additional help from professionals, and even removing in-app ads to minimize distractions, these perks help put a greater focus on learning and incentivize users to reach certain milestones as they hone their skills.
Example: Duolingo’s Super subscription model provides learners with more practice content, unlimited lesson attempts, and no in-app ads.
Figuring out how to start an app-based loyalty program is no easy feat. With so many moving parts, it’s important to establish a roadmap marked with clear goals, major milestones, and end results. Once the basics are well-understood and put into place, customization of your program will help take it to the next level – ensuring both you and your customers get the best value out of your hard work.
There’s no one-size-fits-all guide to creating a successful loyalty program, but many key elements are needed to create a winning strategy:
As with any project, the first step is always to set clear objectives. This requires a two-pronged approach, with clear outlines being set for both internal (business) and external (user) goals.
To establish strong internal objectives for your rewards program, you must ask yourself: Why do you want to create a loyalty program for your product? To increase brand awareness and drive spend? Or perhaps to more consistently give users the features they’ve been asking for?
Having a clear set of defined goals will greatly increase your chance of success in building a strong loyalty program and will allow you to fine-tune the details as you progress to ensure that your users are getting the best value for their time.
Once you’ve established the reason for creating a loyalty program, you must outline a clear path for your users. Customers will want to work towards something, so mapping their progression journey, loyalty perks, and rewards is critical.
This can be integrated into the onboarding process – a crucial moment in the user’s lifecycle. By laying out the potential for progression and rewards from the get-go, users will be more intrigued and willing to engage with your app in the long run.
💡 Did you know? According to our 2024 Mobile Gaming Growth Report, around 69% of users say that having a clear progression system is one of the top reasons to keep engaging with a new mobile game.
Before building your rewarded loyalty program, it’s critical that you understand your core audience. Only by knowing who your users are and what they want can you create an effective loyalty program that will truly speak to them and keep them engaged in the long run.
When it comes to understanding your audience, data is your best friend. Statistics acquired through means such as surveys, industry research, and in-app user behavior give invaluable insights into the spending habits, favorite products, and most sought-after rewards of your customer base – allowing you to create user personas based on the patterns observed between cohorts.
Creating multiple personas, which are fictional characters that represent the archetypical users that may interact with your app, allows you to better understand and target specific customers, ensuring they get the most out of your loyalty program.
Having uniquely defined personas also allows you to drive personalization – building features and offers to target specific cohorts that will benefit the most. With 73% of consumers5 wanting personalized loyalty program rewards, giving each persona a unique journey goes a long way in building a reciprocal user-business relationship.
Once you have a better grasp on who your users are, you can design rewards that best fit their needs and desires. Planning and building a rewards library – which outlines all the possible rewards available in your loyalty program – is a crucial step in making sure each user will be offered something of value.
When selecting which rewards to offer in your digital loyalty program, it’s important to not only look at who your audience is, but how they engage with your product. Do your customers interact with your brand daily, such as buying a coffee from your chain every morning before work? Then perhaps a digital loyalty card, on which they can earn a free item with every tenth purchase, is a smart choice. Or perhaps your business model is oriented towards less frequent (but larger) purchases, in which case giving customers a discount after hitting certain spend goals would be more desirable.
Similarly, by identifying who your highest spenders are, you can offer them larger rewards that will drive greater LTV, whereas more casual users may benefit most from smaller, low-effort rewards that will boost regular engagement over spend.
It’s important to strike a balance between selecting a good number of personalized rewards, without bombarding your userbase with too many options – as it could complicate the redemption process and leave customers feeling overwhelmed. Whether it’s gift cards, in-app items, or discounts on future purchases, there are a number of great options for any industry to offer to their users. Cycling out old rewards in favor of new offers is also a great way to keep things feeling balanced and fresh, further maintaining loyalty and preventing user fatigue.
Figuring out which rewards to offer your users is only one piece of the puzzle – crafting an enjoyable journey toward obtaining them is equally important. Layering in a comprehensive progression system for how they unlock those rewards is a great way to keep users engaged and increase retention.
Progression systems give users something to work towards, incentivizing repeat engagement as users strive to unlock new features, perks, and rewards. With your library of rewards carefully planned out, you can begin to organize each offer by its perceived value and level of effort required to obtain it. Each subsequent level must be more enticing than the previous in order to encourage continuous progression and prevent user churn from rewards that hit a plateau in perceived value.
Adding sequential levels or tiers into your strategy encourages users to progress their way to discover everything your program has to offer. By starting off small and increasing the value with each consecutive level, users are motivated to continue working towards high-level rewards – giving them a sense of accomplishment and exclusivity.
In mobile gaming, publishers may use these systems to lock certain in-game items behind higher levels, rewarding highly experienced players with items that will give them a unique advantage over others. In the travel industry, airlines use tiered systems to reward high-value customers by giving them perks such as priority boarding or lounge access in exchange for their VIP-level loyalty, making them feel exclusive and encouraging further spending to maintain their status.
Once your rewards program is off the ground, it needs to be properly launched and maintained in order to attract users and keep them happy. A number of strategies are used to foster long-term user engagement such as lifecycle marketing, continuous features and updates, and shiny new rewards to keep things feeling fresh and exciting as you scale your program.
These marketing strategies aim to foster engagement throughout the entire customer lifecycle – from initial awareness of the brand to long-term loyalty.
One such strategy is creating and running iterative LiveOps campaigns, which give publishers an opportunity to provide continued support through weekly, monthly, or even seasonal campaigns. These initiatives, which are marketed to users through core lifecycle channels such as in-app messaging, push notifications, and email, use limited-time events to incentivize users to engage regularly so as to not miss out on exclusive rewards.
Introducing some healthy competition is a great way to drive retention by giving users a reason to come back and maintain their place at the top. Whether it’s through daily streaks, spend goals, or minutes logged, having competitive features helps build a community surrounding your app and keeps motivation high.
Tournaments help drive friendly competition further by pitting players against each other to see if they can reach the top in their favorite games, earning rewards along the way. For example, Mistplay’s Tournament feature, which allows players to climb timed leaderboards for a chance to win extra rewards, resulted in a nearly 10% lift in spend,* demonstrating the power of competition, community, and FOMO.
Sweepstakes also offer a unique way to drive competitive engagement through limited-time chances to win big prizes, incentivizing users to spend for their chance to win. With rewards being variable – from multiple small prizes to a single jackpot – users will jump at the chance to compete for the grand prize.
*Based on Q3 2024 performance data gathered by Mistplay.
Personalization of your rewards program is a key feature for maintaining healthy engagement, and can be achieved in a number of ways. From giving users the ability to customize their profiles to offering unique reward opportunities to specific user personas, personalized features help make your customers feel seen, heard, and valued.
Some retail companies that have implemented strong personalization systems in their online storefronts – such as the ability to create a custom user avatar – have seen up to a 73% increase6 in time spent by users, as well as customers being 184% more likely6 to proceed to checkout.
Personalizing your loyalty strategy also involves analyzing current user behavior, segmented into each carefully crafted persona, and encouraging customers to continue their regular engagement habits with unique goals that fit their style.
As Lincoln Smith, Chief Strategy Officer at HMI Performance Incentives and President at Incentive & Engagement Solution Providers (IESP)7 puts it, “[Personalization] is a key driver in improving engagement and targeting individuals’ personal habits and abilities, and asking them to do a bit more, rather than achieving some arbitrary benchmark.”
How do you know which updates to make? That’s where data analysis comes into the picture. By diving deep into performance data, app publishers can see what is working and what isn’t – giving them a clear picture of what needs to change.
Do your users consistently churn at the same point in their lifecycle? Perhaps they are encountering a challenge that is too hard or rewards that are simply not worth the effort. By analyzing the data, you can create tests to figure out why user churn patterns are occurring – lowering challenge difficulty, or improving reward value to see how it affects user retention in that key moment.
Keeping users happy by listening to their feedback and analyzing their behavior is crucial to build your loyalty strategy over time, watching it evolve alongside your users’ needs. In addition to improving on your current systems, it’s important to keep a pulse on the growing trends of the industry to help stay ahead of the competition and deliver innovative features that can’t be found elsewhere.
Running a successful loyalty program can be a huge win if done properly. Although it may not always be easy to get up and running, the list of benefits makes it a worthwhile strategy for any app publisher. And although fruitful, a number of challenges may present themselves, causing difficult roadblocks if not navigated carefully.
With it being five to nine times more expensive8 to acquire new users than it is to maintain loyal ones, keeping customers engaged with a rewards program can help reduce overall costs by maintaining a core audience that will become more loyal over time.
By focusing on retaining users that are already engaged, you don’t need to spend as many marketing resources trying to reach new audiences, focusing instead on nurturing long-time customers and encouraging repeat spend.
Nurturing a loyal userbase through rewarded engagement can have a positive ripple effect on many aspects of your business. By encouraging spend and repeat engagement, loyalty incentives help drive high-value customers to your product.
Long-term users tend to spend more the longer they engage with your brand – with loyal customers spending on average 67% more than new customers8. By keeping these users engaged over a longer period of time, you increase the likelihood that they will spend larger and larger amounts on your brand, increasing the overall LTV of your most loyal users.
When users have a positive experience using your app, they will be more likely to recommend it to their friends and family – broadening your reach and helping you acquire new users. Our 2024 report on how social & community fuels organic growth for mobile games found that 21% of mobile spenders who had a positive experience in their mobile game of choice recommended it to someone else, and nearly 25% left a positive review. This can have a great impact on your brand reputation, instilling in users a greater sense of trust, product quality, and value.
Loyalty programs also present a perfect opportunity to foster creativity and innovation by allowing you to iterate on established processes and analyze user data to formulate new approaches. These new systems create highly applicable program formulas that shift the digital landscape and contribute to the evolution of the mobile industry – helping you make a name for yourself in an increasingly competitive market.
First impressions are important, and users will not be willing to invest their time in an app that leaves them feeling confused, distrustful, or disinterested. In industries such as mobile gaming, up to 43% of users will churn within the first 7 days if an intriguing progression path is not laid out, with other factors such as poor monetization balancing and misaligned advertising also leading to major rates of churn.
That’s why having a solid onboarding strategy that will prepare users for their journey ahead is one of the foundational components of a successful loyalty program design. By laying out the groundwork for clear user progression, core engagement loops, and earning opportunities, publishers can keep users engaged past D7, leading to greater chances of building long-term loyalty.
Running and maintaining a loyalty program uses a lot of resources. Between balancing finances and making sure your team is not stretched thin, resource drain can prove to be a serious problem if not navigated properly.
Establishing a roadmap for post-launch support is one way of helping to mitigate the risk of resource drain and will help your team proactively allocate the correct budget and workforce to ensure the smooth operation of your program.
When it comes to creating a rewards program, acquiring users is only half the battle. Once you’ve got them interested, how do you keep them motivated to engage further? Content drought and low update frequency can cause your program to stagnate, resulting in users jumping ship to seek out other products, leading to high churn rates and low ROI.
Providing your users with regular updates is a surefire way to keep their interest piqued. Content such as daily streaks, in-app events, and communication touchpoints like newsletters are commonplace across mobile industries. By creating an engaging loop of fresh content, you give users a reason to come back time and time again.
💡 Did you know? Our 2025 Mobile Gaming Loyalty Index found that 34% of mobile gamers list frequent content updates as the top reason to continue engaging with their favourite games
With loyalty programs now being more popular than ever, customers are constantly bombarded with new opportunities to earn rewards from a variety of different companies. With so many options being easily accessible to consumers, it’s easy to get lost in the sea of competition.
The average American consumer participates in around 12 loyalty programs9 at any given time, leading to most only engaging at a surface level to acquire immediate perks or discounts. In order to deepen the relationship between business and consumer, app publishers must find ways to offer something that users can’t get anywhere else – giving customers a reason to choose their product over the competition.
Creating a robust, effective, and personalized rewards program is quite the undertaking, but putting all the pieces together can lead to a long-lasting source of user loyalty. From formulating your plan and conducting user research, to selecting useful rewards and strategizing for long-term content updates, building a loyalty program from the ground up can have great effects on your bottom line. Want to know the ins and outs of customer loyalty before building your own program? Check out our recent article What is customer loyalty and why it matters for mobile app publishers.
Are you a mobile game publisher looking to foster long-lasting loyalty in your games? By partnering with a leading UA and engagement platform like Mistplay, you can unlock the full potential of a successful loyalty formula to better reward your users for their time and spend.
For app publishers seeking a way to integrate a loyalty-driven monetization solution into your product, look no further than LoyaltyPlay – our new gaming reward hub that puts the power of play-and-earn into your hands.
Check out how publishers like Treeplla have boosted their D30 retention by 70% with the help of Mistplay and contact us today to unlock the true power of loyalty.
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