Rewards should feel simple, but many loyalty programs don’t. Programs tied to websites or apps often go unused because checking in takes extra effort. Customers must dig through emails or try to remember login details just to see what they earned. It’s not hard to see why people don’t bother.
With SMS loyalty programs, there’s nothing extra to remember. Rewards and reminders arrive by text, only requiring a quick tap to stay in the loop and cash in. Customers get rewarded without the hassle, and your business gets more repeat visits.
The best part is that setting up an SMS loyalty program is even easier than many traditional programs. Here’s how it works and what you need to get started.
Understanding text-based loyalty programs
A text-based loyalty program rewards customers through SMS instead of apps, websites, or even punch cards. Customers sign up by texting a keyword to your number, then start earning rewards with their very next purchase.
The rest is just as intuitive. After opting in, customers receive a text each time they earn points or unlock a reward. When it’s time to redeem, they either reply to the message, click a link, or show the text in-store. It’s really that easy.
One of the best things about SMS loyalty is that it works for any business, big or small. A cozy café or corporate chain can both use it with equal success. The platform is easy to use and affordable and scales beautifully as you expand.
Why text message loyalty programs work
Text message loyalty programs don’t just work—they work really well. The reason boils down to how they fit into everyday phone use. Let’s break down what makes them so effective.
Minimal friction
SMS rewards programs are all about convenience. When everything happens automatically via text, your loyal customers can participate simply by checking their messages and shopping. Customer engagement rates naturally increase, with more people redeeming rewards and coming back to shop again.
Immediate delivery
Timing can make or break a loyalty program. With SMS acting as a direct line, you can reward customers right away, not hours or days later. This real-time connection reinforces buying behavior, leading to lasting customer relationships and higher average orders over time.
High perceived value
Loyalty rewards feel more valuable when they arrive by SMS message. Why? Because loyalty text messages come across as a dynamic conversation, not an automated alert. That personal connection makes even small rewards worth working toward, helping your business stay top-of-mind between purchases.
Types of SMS loyalty programs
So, what does a successful loyalty program look like? (Hint: It looks easy for the customer.) While the goal is always the same, you have tons of freedom with the setup. Let’s walk through the most popular ways businesses use SMS to reward loyalty.
Points based
A points-based reward program is a true classic. It’s where customers earn points for every dollar they spend and redeem them for rewards. The SMS system tracks the points automatically and sends a notification when they have enough for a reward (such as “You hit 100 points! Text REDEEM for $10 off.”).
VIP tiers
A VIP tier system rewards customers based on their total spending or frequency of visits. As they engage more, they move into higher membership tiers, like silver, gold, and platinum. Higher tiers unlock better perks, such as exclusive access to sales, bigger discount codes, or gift cards. SMS automatically notifies them as they level up, which reinforces loyalty as customers see their benefits grow.
Punch card style
Digital punch card programs work just like paper cards. It rewards customers with a free item, SMS coupon, or other exclusive reward after a certain number of purchases or visits. Customers get a text after each punch and automatically receive the reward once they hit the goal number of punches.
Gamified programs
Gamified loyalty programs add a layer of fun, making earning rewards even more exciting. Instead of just earning and redeeming points, customers complete challenges or hit milestones for extra rewards. Maybe they get double points on Tuesdays or a mystery perk after 5 visits in a month.
Smart rewards
Smart reward programs use purchase history data to send offers tailored specifically to what the customer buys most often. For example, if a customer bought an espresso machine and grinder, their SMS reward might be a free bag of premium coffee beans. SMS brings these tailored rewards directly to customers when they’re most likely to use them.
Seven steps to build an SMS customer loyalty program
Ready to build your own SMS loyalty program? The process is more straightforward than you think. Here are 7 steps to get you from idea to launch.
Step #1: Select your text message marketing platform
You can’t start sending SMS messages without the right business texting platform. If you already have an SMS marketing strategy, you’re ahead of the game.
Otherwise, look for an SMS platform with features like:
- Two-way messaging
- Audience segmentation
- Automated workflows and triggers
- Compliance support
- Omnichannel capabilities
- Analytics and reporting dashboards
- Loyalty program integrations
The SMS platform should also integrate with your existing tools, including your e-commerce store and customer relationship management (CRM) system.
Take your time in choosing a platform. Switching later can be disruptive and time-consuming. Try some demos, check customer reviews, and confirm a good fit before deciding.
Step #2: Learn what motivates your customers
Before choosing rewards, you need to know what your target audience truly values. Do they prefer a cash discount? Are they motivated by early access to new products? Or would they delight in getting a free item after every 9 transactions?
To figure this out, look at customer data from email and SMS campaigns, website analytics, and your existing CRM. Also, consider asking directly through customer surveys. The better you understand your customers, the easier it will be to choose desirable and cost-effective rewards.
Step #3: Choose your program’s structure and name
Now, it’s time to choose the structure of your loyalty program. Points based? Punch card style? Tiered rewards? There’s no right or wrong answer. Choose whatever structure aligns with how your customers already shop and what motivates them to return.
For instance, a small online boutique might use a gamified system where customers unlock time-sensitive promotions as they reach certain milestones. A local restaurant may favor the punch card style, while a nationwide retailer might prefer offering smart rewards.
With your selected structure in mind, brainstorm memorable names for your loyalty program. A catchy name like “Sweet Rewards” or “The Inner Circle” turns your system into a club people want to join. It also makes it easier for your loyal brand advocates to share far and wide.
Step #4: Pick rewards your customers will love
You’ve made it to the fun part: choosing your rewards. The goal is to offer rewards customers genuinely want while still protecting your bottom line. Use your findings from Step #2 and the structure of your program to guide your choices.
Popular reward options include:
- Exclusive discounts, like 25% off
- Free products or complimentary upgrades
- Members-only flash sales
- Contest entries for prize drawings
- Partner perks from other local businesses
- Customer experience events, like product launch parties
- Early bird access to limited edition items
- Special shipping perks like expedited delivery
Aim for a mix. Include small rewards that customers can earn quickly alongside bigger perks that take more time to unlock. For example, in a tiered program, you could send a 10% off SMS coupon after the first purchase, then offer a free item or gift card once they hit $500 in total spending.
Step #5: Set up automation
Automation is what makes SMS loyalty programs scalable. Without it, you’d be manually tracking points and sending messages all day. Instead, set up automated triggers so the system does the work for you.
Key personalized messages to set up include:
- A welcome message when someone opts in
- Points balance updates after each purchase
- Reward unlock notifications when customers hit thresholds
- Redemption confirmations when rewards are used
- Reminders for points or reward offers about to expire
- Winback texts for inactive customers
- Anniversary or birthday reward messages
Your SMS platform needs to talk directly to your loyalty program so it can send these reward messages instantly. You can then set up automated SMS workflows using simple if-then logic, like “if a customer reaches 100 points, then send a reward notification” or “if no purchase in 30 days, then send a comeback offer.”
Step #6: Get new and existing customers to opt in
Your loyalty program only works if customers sign up. You must collect explicit consent before sending any SMS messages. The goal is to make joining your program super easy and promote it everywhere your customers already are.
For new customers, promote your program at every touchpoint:
- Place a banner or pop-up on your website’s homepage
- Include an SMS loyalty opt-in checkbox at checkout
- Highlight the program on order confirmation pages
- Mention the loyalty program in welcome emails
- Place a QR code on receipts or packaging
For existing customers, use your other channels to drive opt-ins:
- Email: Send an announcement about the new program and how to join.
- In-store signage: Place your text-to-join keyword on eye-catching displays.
- Social media: Share the program’s value proposition and opt-in keyword.
The most important rule is to keep the barrier to entry low. The signup process should only require a quick text or click of a checkbox. The easier you make it, the faster your membership will grow.
Step #7: Monitor and measure your results
After launching your loyalty program, make a habit of checking in on how it’s doing. You’ll find everything you need right inside your SMS marketing platform and loyalty dashboard.
Some things to pay attention to include:
- Enrollment growth
- Reward redemption rates
- Frequency of repeat purchases
- Member versus non-member spending
- Customer lifetime values
- Average order values
- Program return on investment (ROI)
Set aside time each month to review these numbers. Look for patterns, like whether certain rewards drive more engagement or if the same messages get ignored by multiple SMS subscribers.
Use what you learn to adjust. And don’t be afraid to switch up the rewards from time to time. Remove the perks that aren’t getting claimed, and then add new discounts or items based on customer feedback.
Tips for running a successful SMS loyalty program
Your program is ready to go, so what’s next? Use these 3 tips to ensure your customers feel valued and never lose interest in your SMS loyalty rewards.
Tip #1: Confirm rewards are easy to earn and redeem
SMS loyalty programs naturally have less friction, but it’s still easy to overcomplicate things. How easy is it for your customers to earn and redeem rewards in your program? Test the flow yourself to find out.
Grab your phone and walk through the whole journey. Sign up for your loyalty rewards, check the welcome flow, and make a purchase. Does the system send clear updates? Is it obvious when you’ve earned a reward and how to use it?
Then, try to redeem points or otherwise claim a reward you’ve earned. If it takes more than a single step or leaves you guessing what to do next, simplify the experience. Repeat this process until the journey feels smooth from start to finish.
Tip #2: Sync SMS with your other channels
Don’t let your SMS channel live in a bubble. Use email and social media to reinforce your loyalty program at every turn.
For instance, use your email newsletter to tease a cool new reward or announce a double-points weekend. Send monthly snapshots showing customers how many points they’ve earned and what’s within reach. Also, be sure to send an email recap of each customer’s yearly rewards and milestones achieved through the SMS program.
On social media, share short-form videos on how easy it is to sign up, earn points, and redeem SMS loyalty rewards. Take advantage of user-generated content by creating a “Show Off Your Reward” campaign. Encourage members to post photos or stories about using their favorite rewards and tag your business for a chance to win bonus points or prizes.
Tip #3: Encourage customers to use their rewards
Earning rewards is just the start. Redemption is what fuels ongoing interaction. When your most loyal customers use their rewards, it creates a positive feedback loop. They redeem, feel rewarded, and want to earn more.
But life is busy, and it’s easy to forget about unused rewards. To avoid that, send proactive reminders. Messages like “Your free item is ready—text MINE to claim it” build customer loyalty while driving repeat sales.
Also, remind customers about their progress and upcoming reward expiration dates. When customers are close to a reward, send something like “You’re 100 points away from VIP loyalty status. Shop now to unlock exclusive perks: [link].” And when rewards will soon expire, send alerts like “Your 25% off coupon expires Friday. Claim it now by using [code] at checkout.”
Key takeaways
- Win loyalty with SMS: Text-based loyalty programs meet customers where they already are, making it easier to reward shopping behavior and drive repeat visits.
- Embrace the benefits: SMS loyalty programs deliver rewards instantly, drive higher engagement, and feel more personal than traditional systems.
- Select the right program type: You have many loyalty program types to consider, including basic points programs, digital punch cards, and gamified reward systems.
- Launch in 7 easy steps: Building an SMS loyalty program is a clear, step-by-step process that’s easier to manage than most website- or app-based programs.
- Test for success: Test your loyalty program yourself by walking through signup, earning, and redemption to confirm everything feels simple and intuitive.