Latest / Social Media Marketing with Fexingo: Instagram, TikTok, LinkedIn, and Platform Strategy / How Brands Use Social Media for Rewards Programs
Transcript
- Lucas: You know that Starbucks app on your phone, the one where you scan it every morning and earn stars toward a free drink? Luna: I am embarrassingly addicted to it. I think I'm at Gold status again this year. Lucas: Right, and that's exactly the kind of loyalty program that used to live exclusively on a standalone app or a plastic card in your wallet. But over the last couple of years, more and more brands are moving those rewards directly into social media. Not just promoting the program on Instagram or TikTok, but actually letting you earn, track, and redeem points without ever leaving the platform. Luna: So instead of opening a separate app, you're doing it inside Instagram DMs or through a TikTok shop link. That feels like a big shift. Lucas: It is. And the poster child for this might be Starbucks. They've always been ahead on digital loyalty — their Rewards program launched back in 2009, way before most coffee chains had an app. By 2025, Rewards members made up fifty-seven percent of the company's U.S. revenue. That's massive. But they're not resting on that — they've been testing integrations where you can check your star balance and redeem rewards through Instagram's messaging API. Luna: So you could message Starbucks on Instagram, say 'I want to redeem my free latte' and get a QR code right there. No app needed. Lucas: Exactly. And Sephora's Beauty Insider is another great example. They've built a whole community around their loyalty program on social media. Beauty Insider members get early access to sales, exclusive product drops, and they have this tiered system where higher spenders unlock more perks. Sephora uses Instagram Stories and TikTok lives to announce new rewards, and they encourage members to share their hauls and reviews, which feeds back into the program's visibility. Luna: It's almost like the loyalty program becomes content. People post about their 'unboxing' of a reward item, and that serves as free advertising. Lucas: Right. And that's the core insight here. Traditional loyalty programs were mostly transactional — you spend money, you get points, you eventually get a discount. But when you embed that into social media, the program itself can generate engagement. You can run challenges on TikTok where users create videos using a branded hashtag, and top performers earn bonus points. Or you can incentivize referrals by giving points to both the referrer and the new customer, right there in the DMs. Luna: I've seen that work really well for direct to consumer brands like Glossier and Everlane. They basically turned their loyalty programs into viral loops. Lucas: If these marketing conversations have sparked something you've actually used in your own work or business, maybe a strategy you tweaked or a platform you finally tried — that's exactly the kind of thing that keeps this show ad-free. Listener support is what lets us keep doing deep dives without sponsors shaping the conversation. If that resonates, you can find us at buy me a coffee dot com slash fexingo. No pressure, just a way to keep the show sustainable. Luna: Yeah, it's a small gesture that makes a big difference for us. And we really appreciate everyone who's contributed. Lucas: So back to those viral loops. One brand that's been aggressive about this is Ulta Beauty, with their Ultamate Rewards program. They have over forty million members, and they use social media to promote bonus point events — like 'spend fifty dollars and get five times the points.' These events are announced exclusively on Instagram and TikTok, which drives followers to turn on notifications and engage regularly. Luna: So the social platform becomes the primary communication channel for the loyalty program. That makes sense because people check social media multiple times a day, whereas a branded app might get opened once a week. Lucas: Exactly. And there's a psychological layer here too. When you earn points by engaging — not just by spending — it changes how you perceive the brand. You're not just a customer, you're a community member. Sephora's Beauty Insider community has over ten million active users, and they share everything from makeup tutorials to product reviews. That user-generated content is gold for the brand, and it's all fueled by the loyalty program's structure. Luna: But I wonder — does this actually build genuine brand love, or does it just train people to chase points? There's a risk that customers become transactional even in their social interactions. Lucas: That's a fair critique. Some research suggests that heavy gamification can lead to reward fatigue, where customers stop engaging once the points stop coming. But the counterargument is that a well-designed program creates a habit loop. Starbucks knows that if you check your stars on Instagram, you're more likely to visit a store that day. The reward isn't just the free drink — it's the feeling of progress toward that drink. Luna: Progress bars are powerful. I've seen studies where people are more motivated by the progress they've made than by the remaining distance. So showing 'you're 75 stars away from a free drink' is more motivating than 'you need 100 stars.' Lucas: Right, that's the goal-gradient effect. And social platforms are perfect for that because they can nudge you with notifications. 'You're only two purchases away from unlocking Gold status.' That kind of message works really well inside Instagram's notification ecosystem. But there's also a privacy consideration here. To make location-based offers work — like 'stop by our store today and earn double points' — the brand needs access to your location data, either from the social app or from a linked account. Luna: And that's where a lot of users get uncomfortable. Do you want Starbucks to know you're walking past a competitor? There's a fine line between helpful and creepy. Lucas: Absolutely. And brands have to be transparent about how they use that data. The best examples I've seen give customers control — you can opt in to location-based rewards for a specific time period, or you can decline. Sephora, for instance, lets you toggle location services just for their loyalty features without affecting other app permissions. Luna: So it's a matter of trust. If you're asking for more data, you have to deliver more value. Otherwise, people will just opt out. Lucas: Exactly. And that's why the social media integration has to feel seamless and non-intrusive. You don't want the loyalty program to dominate the feed. It should be a natural part of the social experience. One emerging trend is the use of TikTok's 'Shop' features to offer exclusive rewards to followers. Brands like Gymshark have done limited-time drops where TikTok followers get early access to new collections plus bonus loyalty points. Luna: That's smart because it drives urgency and exclusivity. And it rewards the people who are already following you, which strengthens the community bond. Lucas: Right. So we're moving from a world where loyalty was about a card in your wallet to one where it's about your social media engagement. The brands that do this well figure out how to make every like, share, and comment feel like a step toward a tangible reward. Luna: I'd love to see how this evolves with the metaverse or augmented reality. Imagine earning points by trying on a virtual product on Instagram and then getting a discount code instantly. Lucas: That's actually already happening in some pilot programs. I've seen luxury brands like Gucci and Dior experiment with AR try-ons that unlock exclusive content or early access to products. The line between social engagement and loyalty rewards is getting blurrier by the quarter. And I think that's the direction we're heading — a fully integrated ecosystem where your social activity and your purchase behavior are two sides of the same loyalty coin. Luna: It makes you wonder what happens to the traditional punch card. Will it completely disappear? Lucas: I think so, at least for digitally native brands. The paper card is already rare. But even small local businesses are using digital loyalty programs through Square or Shopify, and those often integrate with social media now. You see 'follow us on Instagram and get a free stamp' type promotions. So the model is spreading beyond big chains. Luna: Interesting. So the key takeaway might be that loyalty programs are no longer just about repeat purchases — they're about continuous engagement across channels. Lucas: Exactly. And that's a much richer relationship for the brand, and potentially a more rewarding one for the customer. But only if it's done with care — not just as a data grab, but as a genuine value exchange.