Learn how exclusive offers, rewards, and incentives in loyalty programs can drive repeat business and enhance customer engagement.
Over 53% of consumers admit that discounts and loyalty points keep them hooked to brands.
In essence, it is the allure of exclusive perks and rewards that keeps customers coming back for more, making this a vital aspect for businesses to consider when building eCommerce marketing strategies.
Keep reading as we walk you through different reward programs, their benefits, key elements of a loyalty program, and the right tools to leverage.
Key Takeaways:
- Loyalty programs significantly drive repeat business and enhance customer engagement.
- Consumers are motivated by discounts and loyalty points.
- eCommerce Loyalty programs come in different forms, such as points-based, paid memberships, tiered, and value-based programs.
What are eCommerce Loyalty Programs?
eCommerce loyalty programs are the cool perks you get for being a regular at your favorite online store. They’re designed to make you feel special and appreciated, whether earning points, getting rewards, or leveling up in VIP tiers.
Rewards and loyalty programs can vary significantly, from basic upgrades and accruing points to more complex setups involving loyalty cards, gamification, and unlocking achievements.
The aim is to transform customers’ online shopping routines into something more engaging while making them feel more valued and appreciated.​​
According to HubSpot, customer-centric companies are 60% more profitable than their counterparts, proving the power of putting the customer first.
That said, loyalty programs are a strategic move to significantly boost your bottom line.
How do Loyalty Programs Benefit eCommerce Businesses?
Now that we’ve established the basics of a rewards and loyalty program, let’s look at how it benefits eCommerce businesses.
Improve Customer Retention
Loyalty programs create a magnetic pull, encouraging customers to stick around for exclusive offers and personalized rewards, ultimately strengthening the bond with your brand.
Customer Advocacy
Satisfied customers turn into vocal advocates, sparking word-of-mouth marketing. Such organic promotion is free advertising, drawing in new customers through effective referral programs.
Referral programs incentivize customers to recommend products to their networks, thereby amplifying brand visibility.
Higher Brand Allegiance
Loyalty programs create relationships that transcend transactions while fostering a sense of community. This will eventually enhance brand loyalty.
Reduce Customer Acquisition Costs
Employing loyalty programs can be your affordable strategy to retain existing customers. By compelling patrons to come back more often, businesses can focus less on acquiring new customers.
Increased Revenue
Fostering brand loyalty drives repeat business. Customers return to earn more rewards, resulting in increased spending and higher revenue.
Make Data-driven Decisions
Unlocking a wealth of customer data, loyalty programs empower businesses to make more customer-centric decisions. Companies can leverage these valuable insights to tailor experiences and initiatives.
4 Types of eCommerce Loyalty Programs with Examples
Let’s now explore the various types of loyalty programs businesses can implement.
Points-based Programs
In this setup, customers earn points with every purchase using their loyalty cards, which can later be redeemed for discounts or free products.
Moreover, having an easy redemption process for points-based loyalty programs is crucial. If customers find it difficult or cumbersome to redeem their points, they may become frustrated and are less likely to participate.
A prime example is the Starbucks mobile app and loyalty card system, where members can conveniently make payments and redeem accumulated points. This transforms the routine coffee runs into an engaging game, encouraging them to earn more points and discounts.
Paid Memberships
Paid loyalty programs, like Amazon Prime, offer them exclusive perks and privileges in return for a membership fee.
Members join these programs for convenience and efficiency in accessing their rewards and benefits, which helps build a loyal customer base that values added perks.
Tiered Loyalty Programs
Stores can design a loyalty ladder where customers strive to reach higher tiers to unlock premium benefits and exclusive privileges.
Sephora’s Beauty Insider is a prime example of such a system. The program is divided into three loyalty tiers—Insider, VIB, and Rouge, each catering to different customer segments based on spending and loyalty levels.
Such VIP programs instill a sense of accomplishment as customers ascend the loyalty ranks. This further strengthens brand loyalty, encourages repeat purchases, and often leads to increased customer lifetime value.
Value-based Programs
A value-based loyalty program goes beyond typical rewards. Instead of offering customers direct benefits, businesses allocate a percentage of profits to a cause, like a charity or non-profit organization.
This approach allows brands to advocate for social, environmental, or economic issues. Here, the customer’s reward isn’t a discount or points—it’s the satisfaction of contributing to a greater good by supporting a brand that aligns with their values
7 Key Elements of a Successful eCommerce Reward Program
When customers join loyalty programs, they often encounter enticing incentives designed to kickstart their engagement. These can include sign-up bonuses that immediately reward new members. Such incentives not only attract initial interest but also set the stage for ongoing participation.
In this section, we’ll explore the essential elements that ensure your reward program engages and retains customers.
Keep it Simple
Ensure your rewards program and the redemption process are easy to understand, with clear guidelines on how customers can earn and redeem rewards. Simplicity enhances user engagement and encourages participation.
Reward in Time
Offer timely rewards to customers to maintain their motivation and enthusiasm for participating in the program. Prompt recognition of customer actions enhances their satisfaction and encourages continued engagement.
Highlight the Perks
Communicate the value proposition to the customers. Perks serve as the differentiating factor between the brand and its competitors. So, by showcasing the benefits attached, such as discounts, exclusive access, members-only sales, and more, the brand creates a sense of exclusivity that encourages active participation.
Transparency
Maintain transparency in your policies and criteria to build trust with customers. Provide clarity on how rewards are earned and redeemed and also about the terms or conditions associated with it.
Make it Measurable
Ensure that the benefits of your rewards program are quantifiable—track metrics such as customer engagement and retention rates to assess the effectiveness.
Great UX
Optimize the user experience of your rewards program across all platforms, including mobile devices, to maximize accessibility and engagement. An intuitive user interface encourages more participation in the program.
Loyalty Cards and App
A dedicated loyalty card and app system enhances the reward program’s effectiveness. By integrating both physical loyalty cards and a mobile app, brands provide customers with convenient ways to earn points and track their rewards.
Moreover, having a mobile app improves accessibility, allowing users to check their points balance, receive notifications about exclusive offers, and more.
Essential Tools for Building Loyalty Programs
WebToffee WooCommerce Giftcards
The WebToffee WooCommerce Gift Cards plugin is your ultimate solution for cultivating customer loyalty and boosting sales effortlessly within your store. You can create and market an extensive range of customizable gift cards and vouchers, encouraging engagement and brand advocacy among your customers.
Customers can also purchase and share personalized gift cards with their loved ones, further enhancing the shopping experience and strengthening the brand’s presence.
myCred
myCred simplifies the creation of loyalty programs or gamification on your website with a comprehensive points management system—-designed for WordPress-powered websites.
The plugin boasts 11 built-in add-ons that expand functionality, including transfer of points, notifications, statistics, and more. These add-ons operate independently, allowing for customization and flexibility in feature selection.
Points and Rewards for WooCommerce
The Points and Rewards plugin offers businesses a powerful tool to engage customers by introducing unique user badges that symbolize different levels of accomplishment.
From sign-ups to purchases and referrals, various activities within the store can now earn points, which customers can redeem for products or membership benefits, boosting sales and customer lifetime value.
Examples of Successful Loyalty Programs
Alaska Airlines Mileage Plan
Mileage Plan is Alaska’s loyalty program for anyone who loves to travel.
Imagine earning miles not just when you fly but also when you dine out, shop, or stay at your favorite hotel. With every mile you collect, this program gets you free flights, luxurious seat upgrades, and exciting vacation packages.
As a tier-based program, Mileage Plan lets customers earn miles, experience award travel, and achieve top-tier MVP elite status. You’ll enjoy exclusive perks like priority boarding, complimentary upgrades, and access to exclusive airport lounges.
Love your Body Club
With The Body Shop’s loyalty program, you can earn points not just on purchases but also for trying new products and sharing your experiences with friends.
As a member of the ‘Love Your Body Club,’ you gain access to exclusive perks such as birthday treats, personalized skincare consultations, and early access to new arrivals. Additionally, you have the option to donate your rewards to charity.
FAQ
Customer loyalty is a vital aspect of business success, encompassing various nuanced forms beyond mere repeat purchases.
Emotional Loyalty centers on personal connections forged between customers and brands based on shared values and experiences.
Advocacy Loyalty involves customers becoming loyal advocates and actively promoting it within their social networks.
Transactional Loyalty is built upon customers’ regular purchases, which are often driven by convenience, habit, or competitive pricing.
Social Loyalty is influenced by a customer’s social environment, where peer recommendations and community influence purchasing decisions.
Engagement Loyalty emerges from customers’ active participation in a brand, such as interacting with content, attending events, etc.
Behavioral Loyalty is demonstrated through consistent buying patterns and actions, reflecting a customer’s habitual preference for a particular brand.
The 3Rs of a loyalty program are rewards, relevance, and recognition.
Rewards: Incentives and benefits offered to customers.
Relevance: Personalize customer’s reward experience.
Recognition: Recognize and appreciate your best customers.
The 4 stages of loyalty are cognitive, affective, conative, and action. Each stage represents a progression from awareness and knowledge of a brand to emotional connection and, finally, consistent behaviors that demonstrate brand loyalty and advocacy.
Conclusion
In our short guide on eCommerce loyalty programs, it’s clear that simplicity is the key to leveraging this strategy. From understanding the benefits to exploring different loyalty programs and their essential elements, the takeaway is straightforward: these are more than just rewards—they are how brands build a connection with their loyal customers.
Armed with thoughtful design and the right tools, loyalty programs become not just a strategy but an ecosystem where brands and customers flourish together.
That’s it, folks! If you found this information helpful, we’d love to hear from you! And if you’re eager to explore more topics like this, stay tuned for more updates.
