How to create a loyalty program that gives results on your online business

loyalty program for ecommerce

First of all, you should know that acquiring a new customer is much more expensive than keeping an existing one. There are many methods to retain consumers and make sure that they continue to make their purchases from you and not from your competitors. One of these methods – which is also one of the most effective – is undoubtedly the loyalty program for e-commerce and sites that offer services in general.


Why should you invest in customer loyalty?

Many eCommerce managers set one big, shiny goal: to win over more customers every day. But customers don’t just have to be won; they have to be kept. It’s pure, simple math. Customers who buy more than once are more profitable than those who buy only once.

And that’s because loyal customers – those who come back again and again – have a higher Lifetime Value, which is the indicator that tells us what profits we can expect based on a customer’s buying behavior.

In addition, keeping an eye on Customer Lifetime Value allows you to break down your customers into specific segments to tailor your marketing efforts, customer retention efforts, and loyalty program.

It’s good to know that not only does it cost less to retain a customer than to acquire a new one, but it’s also worth noting that existing customers spend 67% more than new customers.

Don’t be surprised: you should expect a customer arriving for the first time on your e-commerce, not knowing the quality of your products and your other strengths, tends to spend less than a regular customer!

The trick, therefore, is to transform “normal” customers into loyal customers. How does this transformation happen? Well, customers take this step when they realize that your e-commerce products are of high quality, worth every last euro spent and delivered as promised, or when your brand offers repeated and continuous value to those who prove to be loyal.

Here, then, is why you need to retain your customers and why an eCommerce loyalty program is a great way to do it.

What exactly is a loyalty program?

what is a loyalty program

A loyalty program aims to increase customer satisfaction and incentivize them to return over time to make additional purchases.

To this end, repeat customer purchases are rewarded with various types of rewards: we’re talking about discounts, free products, coupons, access to any exclusive products, and many other possible rewards.

Among the best international loyalty programs is the points program of the great brand The North Face, which gives its customers ten points for every dollar spent in online and retail stores and five points for every dollar spent in outlets. Then customers can use these points in future purchases.

To further increase customer engagement, The North Face has also developed an app where users can manage their accounts, purchase new products, check point status, use rewards, and more.

In addition to the world of e-commerce, online service providers, such as the world’s top online casino sites or airline sites, also count on attractive loyalty rewards.

In order to retain a customer, you need to know how to stand out.

For example, the recommended online casinos that vegasslotsonline lists offer a fantastic cashback bonus. Some offer cashback as part of their welcome bonus package, and others as a regular promotion for as long as you remain a customer.

Also, there are online casinos that offer no bonuses at all, which will rarely succeed in retaining players as they offer them no added value.

Bonus cashback is like a loyalty reward offered on eCommerce sites, airline sites, or supermarkets.

And on online casinos sites like the one just mentioned, there are many different types of loyalty rewards. You can also be sure that you are playing in an online casino totally safe and certified.

Does your e-commerce need a loyalty program?

Anyone who deals with customers can certainly benefit from planning a loyalty program. However, it would need to be noticed that some eCommerce stores may recognize more benefits than others. So, let’s see which online stores should design a good customer loyalty program.

In what cases should your e-commerce store design a loyalty program?

When it attracts repeat orders: online stores do not, by their nature, have a customer base that returns over time. Try to think, for example, of those e-commerce stores that sell only one type of non-perishable product;

If it generates a good flow of new customers: loyalty programs are particularly effective in quickly turning them into lasting ones. Is your eCommerce business not consistently generating a stream of new buyers? Then before you think about a loyalty program, you should work on increasing traffic and user experience.

If it operates in a niche with price-sensitive customers: eCommerce loyalty programs tend to lose their meaning in the luxury sector, where the price is irrelevant.

If it operates in a market with many competitors: eCommerce companies that can benefit from a loyalty program are mostly those dealing with more or less fierce competitors and therefore routinely face the risk of having valuable customers “stolen” from them. In addition, loyalty programs allow you to protect your customers and attract new ones from your competitors.

The objectives of a loyalty program for e-commerce companies

If you’re still reading the article, most likely, your eCommerce business falls into one, or all, of the types.

But why do you need one? What is your goal? What are the benefits you can actually get from it?

To say that a loyalty program is about retaining customers is correct, but it’s not a complete answer. Here, then, are all the benefits that await you:

1. Reward the best: you’re going to reward not all customers indiscriminately – as happens for example, with blanket discounts – but only the best customers, those who buy more and spend more;

2. A loyalty program allows you to collect a lot of valuable data about your customers and their buying behavior. This information can be enormously helpful for future marketing strategies;

3. Building customer loyalty means having lots of testimonials: a study by Customer Insight Group tells us that 78% of loyal customers are happy to promote the brand they love with family, friends, and colleagues (and this is very important, assuming that practically everyone prefers the suggestions of acquaintances to advertisements);

4. It allows you to acquire new customers: the main objective of a loyalty program is certainly not to attract new customers, but it is equally sure that many consumers who barely know the rewards offered by your e-commerce will attract you;

With such a program, you can identify who your best customers are: once you know who falls into this particular group, you can start studying their behavior, preferences, and motives so that you can improve your advertising, your communication, and your products themselves;

5. You can make your customers leap forward. A loyalty program helps you turn a good customer into a great customer; those who occasionally buy from you will be led to multiply their purchases, while those who are already loyal customers will be encouraged to spend more. All, in short, are led to ‘improve’;

6. A customer loyalty program gives you the juicy opportunity to fish out customers lost over time. This is because former customers who have started shopping elsewhere may return to you, attracted by the reward.

7. You protect yourself from competitors: there will be very few of your customers who will decide to make purchases from your competitors during an effective loyalty program.

Now that you know all about loyalty programs, you’re ready to create your own and hopefully increase your business’s annual revenue in the shortest amount of time possible.

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Bibliography ►

phoneia.com (March 1, 2022). How to create a loyalty program that gives results on your online business. Bogotá: E-Cultura Group. Recovered from https://phoneia.com/en/how-to-create-a-loyalty-program-that-gives-results-on-your-online-business/