Creating SMS loyalty programs that work: Strategies & examples

Ask anyone why they’re loyal to a brand, and they’ll never say, “Because I got 5% off once.”

Loyalty is emotional, it’s built through relevance, timing, and trust. The way you communicate matters, and right now, SMS loyalty programs are quietly becoming one of the most powerful ways to keep that connection alive: not just another punch card, not just another app, but a direct line to the customer’s pocket, where attention is undivided and messages don’t get lost in a promotions tab.

With fast delivery, unmatched open rates, and ease of use, text-based loyalty programs give businesses a simple way to improve customer experience, drive repeat business, and offer special rewards that make customers feel recognized and appreciated. In this guide, you’ll learn how to create a text message loyalty program that not only sends texts but builds long-term relationships with loyal customers.

What is an SMS loyalty program?

An SMS loyalty program is a type of customer loyalty program that uses text message marketing to engage users and reward them for continued business. At its core, SMS loyalty programs are meant to build momentum by recognizing milestones, celebrating moments, and bringing customers back with real, personal value.

Once a customer signs up, typically by texting a keyword to a short code or entering a number online, they’re enrolled in a series of personalized loyalty text messages. These might include special offers, reward reminders, birthday gifts, or VIP perks. The objective is to strengthen customer loyalty by consistently delivering value, recognizing engagement, and encouraging ongoing interaction.

Compared to app-based systems or paper punch cards, text-based loyalty programs are faster, easier, and more cost-effective to manage. Unlike traditional apps, this rewards program only needs your customers’ phone numbers to get started, making it fast and frictionless.

By understanding how SMS loyalty programs function, it becomes clear why so many businesses rely on them to enhance customer relationships. The next step is exploring the specific benefits they bring to both engagement and long-term retention.

Benefits of SMS loyalty programs

Here’s why so many brands are switching to text message loyalty programs to boost retention and customer engagement:

Direct and immediate

Text messages are opened within minutes, making SMS the perfect tool for timely offers like flash sales, limited redemptions, or personalized incentives.

Higher redemption rates

Customers are more likely to claim text message rewards because they don’t have to log into a portal or search their inbox, it’s all on their phones. In fact, SMS coupons are redeemed 10 times more frequently than email coupons, making them a powerful tool for driving immediate action and conversions.

Personalized and relevant

You can tailor offers based on user behavior, like purchase history, location, or visit frequency, making loyal customers feel truly valued. SMS also enables quick segmentation of customers based on behavior, allowing for more focused and personalized outreach.

Integrated experience

SMS loyalty flows can easily sync with your existing CRM or customer data platform, creating a smoother customer experience across channels.

To fully realize these benefits, businesses need a well-structured approach that aligns messaging, timing, and targeting: starting with a solid foundation for setup and execution. By delivering timely, relevant rewards through a channel customers trust, SMS plays a key role in building customer loyalty that lasts beyond the first purchase.

How to set up an SMS loyalty program

A high-performing text message loyalty program needs more than just sending texts. Follow these steps for a fully integrated, results-driven experience:

1. Choose the right technology

Start with a platform that supports segmentation, automation, and real-time analytics. Infobip’s Moments and People CDP are ideal for omnichannel loyalty flows.

2. Invite customers to join

Offer clear sign-up options online, at checkout, or in-store displays using QR codes, SMS short codes, or embedded forms. Reward the first opt-in with special offers like “Get 10% off your next purchase.”

3. Segment and personalize

Group customers by behavior or loyalty status. Customize messages to recognize milestones and make customers feel like insiders. By running targeted SMS campaigns, you can test different messages and rewards for each segment, improving overall performance.

4. Automate key flows

Set up loyalty sequences that trigger based on actions like:

• First purchase
• Points earned
• Follow-ups when a customer hasn’t interacted in a while
• Birthday rewards

5. Track and improve

Use data to monitor redemption rates, churn, and ROI. Test message timing and content to optimize customer engagement.

Once your SMS loyalty framework is in place, the next step is crafting the actual messages that will drive engagement. From welcome texts to reward notifications, each message plays a role in shaping the customer experience. The examples below illustrate how different industries use SMS to personalize rewards, reinforce value, and strengthen long-term loyalty.

SMS loyalty text message examples

Crafting effective loyalty messages is just as important as setting up the program itself. The content, tone, and timing of your messages can significantly influence customer engagement and redemption rates. To help you get started, we’ve compiled a range of industry-specific examples that show how brands are using SMS to deliver value, recognize loyal behavior, and build stronger customer relationships.

Retail & eCommerce

Hospitality

Telecommunications (Telcos)

Financial services

Transportation

Each one is short, actionable, and centered around customer experience and value.

Common challenges in SMS loyalty (and how to fix them)

Even the most well-intentioned SMS loyalty programs can run into obstacles. Here are some of the most frequent challenges businesses face and how to solve them.

Low opt-in rates are often the first hurdle, if customers don’t see immediate value, they won’t subscribe. Make the sign-up process simple and promote clear benefits upfront—like an instant reward or exclusive offer for participating in your campaign.

Another common issue is poor engagement. Sending the same message to everyone can feel impersonal and lead to unsubscribes. To fix this, segment your audience and create SMS campaigns tailored to different groups of customers based on behavior, location, or loyalty tier.

Message fatigue can also become a problem if texts are sent too often or offer little value. Focus on quality over quantity, send texts that matter, and make every loyalty text message count.

Some businesses struggle with measuring ROI. Without clear performance tracking, it’s hard to know what’s working. Use UTM links, analytics dashboards, and redemption codes to connect SMS activity to real results, like redemptions, conversions, and repeat purchases.

Finally, there’s the challenge of brand consistency. If your SMS tone doesn’t align with your other channels, it can feel disconnected. Make sure your text message marketing supports the same voice, tone, and visuals used in email, web, and social, delivering a seamless customer experience across every touchpoint.

Consistency, clarity, and real-time feedback are key to running a successful text message marketing program.

Conclusion: Loyalty that lasts

A great SMS loyalty program doesn’t just reward; it builds lasting customer relationships. It makes customers feel remembered, understood, and appreciated. It gives them a reason to come back again and again. This emotional connection has a real impact on business performance: 57% of consumers say they spend more with brands they are loyal to.

By using text message rewards that are personal, timely, and relevant, you drive customer engagement that increases both revenue and retention.

Ready to get started? When implemented strategically, SMS loyalty programs increase revenue by 12% to 18%, offering both immediate wins and sustainable growth over time. Infobip’s tools make it easy to design, automate, and scale text-based loyalty programs tailored to your business goals. Whether you’re scaling an existing rewards program or starting from scratch, focusing on real-time, data-driven messaging is key to building sustainable customer loyalty.