The tier-based system in reward programs has a two-fold impact. Firstly, it acknowledges and honors initial loyalty. Secondly, it encourages future purchases with an award structure that gets progressively better with more consumer activity.
Virgin Atlantic's Flying Club is a loyalty membership that is precisely a triple tier-based system. Individuals are granted access at the Club Red level, where they can earn miles on flights and get discounts on their travel necessities like rental cars, airport parking and hotels. The next status is Club Silver where members have a 50% increase in point-earning and enjoy expedited check-ins and priority standby. Virgin Atlantic's tier-based system concludes with Club Gold -- flyers get double miles, as well as priority boarding and entry to exclusive clubhouses at the airport.