Beyond transactions: Why M&M's launched a loyalty program

Last month, M&M's launched its first loyalty program, Fun Club, allowing consumers to earn points by completing activities and redeem them for sweepstakes entries or M&M's merchandise.

While loyalty programs are typically associated with high-frequency purchases—like groceries, travel, or restaurants—even low-frequency brands are using loyalty to increase engagement, gather data, and drive sales amid rising competition.

Here’s why M&M’s is investing in loyalty and what other brands can learn.

1. Loyalty programs can increase purchase frequency

M&M's and other candies are often impulse purchases, bought while consumers are in line or making a quick trip to the convenience store. But by offering perks like merch and extra contest entries, the Fun Club incentivizes repeat purchases and provides value to fans.

• This approach has worked well for another candy brand, Jelly Belly, which launched its Sweet Rewards program in partnership with Zinrelo.
• The program drove a 77% increase in customer retention and nearly doubled the growth in repeat-purchase revenue.

Key takeaway: Even if your category doesn’t rely on frequent purchases, loyalty incentives can move the needle on purchase cadence and customer lifetime value.

2. Engagement between purchases matters

Loyalty programs can incentivize consumers to engage with brands beyond making a purchase.

• M&M’s Fun Club awards points for online activities—quizzes, polls, and social media interaction—creating more customer touchpoints for the brand.
• Dr Pepper’s Pepper Perks program uses exclusive, limited-edition flavors to keep loyalty members engaged outside of the store.

This can help maintain brand visibility between purchases and boost customer spend over time.

• 49.4% of US agencies and brand professionals say monitoring spend over time is the best indicator of a loyal ecommerce customer, per January 2025 data from BloomReach.

Key takeaway: Sustained engagement is just as important as purchase behavior. Loyalty programs can keep your brand relevant—even when it’s not in the cart.

3. First-party data is a strategic advantage

Most consumer packaged goods (CPG) brands sell through third parties like big box retailers or grocery stores, limiting access to customer data. But loyalty programs create a direct line to first-party data, which 40% of US advertisers cite as their primary strategy to maintain targeting effectiveness in 2025, according to November 2024 data from Proximic.

• M&M’s loyalty program uses customer receipts to track points, giving insights into purchasing behavior, frequency, location, and product preferences.
• This data can inform targeted marketing, product development, and promotional strategy.

Key takeaway: In a privacy-first environment, loyalty programs offer a compliant and high-value way to gather first-party insights at scale.

4. The program builds brand equity

M&M’s designed its loyalty rewards to reflect the brand’s playful personality, offering scented candles, puzzles, branded merchandise, and even a sweepstakes for a sleepover at M&M’s World in Times Square.

• Boosting customer loyalty isn’t just about transactional rewards—these experiences differentiate the brand and drive emotional affinity.
• In the future, experiences may play a larger role in loyalty programs as 80% of US retail executives expect consumers to prefer spending on experiences over goods in 2025, according to November 2024 data from Deloitte.

Key takeaway: A well-designed loyalty program can reinforce brand values and identity—not just incentivize transactions.

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