Walgreen (WAG) lost a large number of customers to competitors last year as it tried to resolve its dispute with pharmacy benefits manager Express Scripts. Now the company has announced a new opportunity to reward its most loyal customers and attract new ones, including those with Express Scripts.

CVS Caremark (CVS) and Rite Aid (RAD) have had programs for several years.

Walgreen's program will blend the elements of loyalty plans offered by its competitors and other elements reminiscent of frequent-flyer programs.

The company will roll out a countrywide electronic health record service in collaboration with Greenway Medical Technologies in an effort to provide better service. The EHR will help Walgreen give personalized advice to customers.

Loyal customers can boost revenue with repeat purchase

The loyalty program is set for launch on Sept. 16. Customers will earn points by purchasing certain items, filling prescriptions, getting shots and even participating in a walking program.

Points will be worth more as users accrue them. For example, 5,000 points will net a $5 reward, while 40,000 points will net $50. Points can then be redeemed online or at a store. Walgreen is targeting tens of millions of people to sign up before the end of the year as it aims to become as big as CVS in loyalty programs.

The market for loyalty cards is big and brings in more revenue as shopping frequency and customer spending increase. CVS' ExtraCare card debuted in 2001 and has more than 70 million households and 100 million individuals who use the card at least once every six months. The company claims a redemption rate of 55% for its quarterly ExtraBucks program.

Rite Aid has 25 million Wellness+ members who use its card at least twice every six months. Rite Aid reported that Wellness+ users accounted for 75% of its general merchandise sales and 69% of its filled prescriptions in the first quarter.