What an excellent time to be alive to witness the change in human behaviors, most especially the shift from physical shopping to online buying and selling. Who could have thought that we all would prefer to shop for our groceries online some generations back? And while we are trying to adapt to the change, the pandemic in 2020 gave us no other choice but to be online shoppers.

The world’s condition during that period gave rise to ecommerce activities, and the market value grew exponentially. It has been predicted that the ecommerce market will be worth about $6.3 billion by the end of 2024. Therefore, every business should strive to bring their business online and incorporate ecommerce into their website. For those in the market, here is the time to consider loyalty programs to keep your customers.

The main reason has been that many businesses will storm the industry in the next few years. It will help if you give your customers reasons to stick with your brand and continue shopping with you. Making good products is not enough; you must provide them with sweet offerings. This article is specially curated to teach loyalty programs for ecommerce businesses. Make sure you follow through till the end.

What Are Loyalty Programs?

These are incentive programs designed to help businesses retain their customers. Loyalty programs give rewards, discounts, cashback, and bonuses to the returning buyers of a business. Likewise, it encourages new buyers to purchase more to benefit from all the incentives packaged for returning customers.

Loyalty Programs can take different forms. It could be a subscription, referral, or point-based program that awards points to customers. These points can then be redeemed for awesome prizes and discounts. Another common one is the tier-based system in which customers are upgraded as they make more purchases.

Ecommerce loyalty program aims toward helping online merchants and brands keep their customers. These programs are designed to assist ecommerce businesses in gathering a community of loyal customers and boosting their overall customer lifetime value.

Why Should Ecommerce Businesses Consider Loyalty Programs?

Ecommerce is a competitive market. Many emerging companies are trying to scale up by giving ridiculous discounts and reducing the prices of their product which usually lead to quality reductions. You don’t have to compromise the quality of your products to acquire and retain customers. With loyalty programs, you can make them work for the discounts, which would generate more income for your business. The following are reasons to consider loyalty programs for your business.

  • Engaging customers

An ecommerce business aims to sell. However, that must not be the only thing you want from your customers. You must be willing to build a relationship with your customers to retain them for a very long time. Loyalty programs often lead to community building, which always motivates engagement. You can get them to engage by introducing rewards for participation.

In a situation like this, people will want to be a member of your community. Even those yet-to-become a buyer will join and participate to earn points that they can convert into gifts and discounts in the future.

  • Gaining customer’s trust

You can gain people’s trust quickly when you show compassion and sympathize with them at their lowest point in life. There’s no better way to show you care than through loyalty programs. Offering incentives to your buyers offer that you’re not only after profit making but also want your buyer’s satisfaction. Your kind gestures will cause them to stick to your brand forever.

  • Competing with giants in the market

Loyalty programs will put you in a position to compete with big companies in the ecommerce market. Even now, Amazon, the biggest ecommerce platform in the world, rides on victory because of its subscription-based loyalty program.

Amazon Prime is a community of subscribers that enjoy benefits like free delivery, special access to some peculiar products, and unrestricted access to all the company’s streaming platforms. Due to its loyalty program, Amazon gets half of the ecommerce orders in the United States.

In this competitive market, you only have a chance of winning with a groundbreaking incentive program. You have to appreciate your customers for choosing you over the big companies in the market.

  • Great buying experience

Internet users want to start enjoying your brand right from the moment they discover your website or join your community of customers. They crave a fascinating buying journey filled with surprises and bonuses. Loyalty programs help to provide all these services. Moreover, it forces businesses to implement some machine learning tools that provide personified shopping experiences for customers.

  • Discounts and holiday bonuses are not enough.

Discounts and holiday sales are excellent if you intend to gain many one-time buyers that will only engage with your business once. But if your goal is to acquire many returning buyers and keep them for a lifetime, a loyalty program is your reward strategy. A loyalty program boosts your touchpoints, making it possible to interact and build lasting relationships with your customers.

The Best Loyalty Program Types for Ecommerce Business

There are many different approaches to loyalty program implementations. However, these are the best five incentive programs for online stores.

  • Points programs

Points program award points to customers after purchasing a product or completing a task. The task could be inviting their friends to join your community, signing up for your newsletter, sharing your content on their social media, or participating in your community programs. These points can then be redeemed for discounts, gifts, and free products.

This program is better implemented with a unique shopping app for your customers. It would make it easier to keep all their records in one place and also gain information about their personality. The point-based program has been in use for a very long time. It is more or less the baseline of loyalty programs.

  • Tiered-based Programs

Tiered Program is an upgraded version of the point-based loyalty program. Instead of redeeming points, customers gather lots of points to move up tiers. Each tier offers sweet benefits, and the incentives get better with every promotion. Tiered loyalty programs often feature three levels; the first is for people that just joined your community, the second is for frequent and returning buyers, and the top is for customers that stayed with your brand all through the seasons.

Starbucks has garnered lots of customers with this program. The beverage-giant awards stars to customers for every purchase. Customers upgrade to new levels after getting some stars and enjoy benefits like birthday gifts, free orders, and free drink upgrades.

  • Perks Program

Perks loyalty program is completely different from the last two. It doesn’t award points, nor does it promote customers. It rewards unconditionally. Every customer gets the perks, which are done this way to make customers feel rather indebted to your brand than entitled. Also, it saves your business the long-time burden associated with other forms of loyalty programs. You can reward all your customers once or twice a year—a good choice for startup ecommerce merchants with little capital.

  • Subscription Loyalty programs

The Amazon loyalty program explained earlier is subscription based. Prime members pay some amounts to get into any of the available tiers. The incentives are massive. You can also use this, but you must make sure your incentives are worth more than the subscription payment.

The top pro of this type is that it ensures engagement. Subscribers would like to make the most of their payment, resulting in maximum engagement and more sales.

  • Hybrid Loyalty Programs

Hybrid is achieved through the combination of all the types mentioned above. It involves mixing critical elements in all other loyalty programs to build a community of buyers and improve your customer retention rate.

Key Elements to Add to Your Ecommerce Loyalty Programs

As emphasized in the introduction, the ecommerce market is not as it used to be; even the brick and mortal shopping malls are beginning to create an online presence for their business. It implies that merchants must add some critical elements to their loyalty programs to ensure their fans are regularly reminded of their presence in the market. These elements include;

  • A special shopping app

Aside from your ecommerce website, where you accept new visitors, you should have a particular app or platform for managing your loyalty program. Shoppers can become community members by signing up on the app. They will access their points and redeem them for bonuses on the app. It makes it easier to manage incentive programs.

  • Regular tasking and engagement

If you don’t want competitors to steal your customers, engage them, even when they are not buying. Ensure your emails and brand name are always popping on their screens with reward promises. You can do these by introducing games, referral bonuses, social media contests, TikTok challenges, and many more.

Games are one of the elements that make up a loyalty program. Integrate a game into the shopping app or website, which customers can play to earn a few points. The game should only give a few points and should only award points on a special day of the week.

For example, Wednesday can be your special day. Every customer that login and play the game can be given 3 points for participation. Community members would like to participate in this game weekly to gain points. They will constantly be reminded of your brand and will be your customer all year round.

Referral programs are also another one. Customers should be able to earn rewards by introducing your brand to a friend or relative. Uber is gathering lots of new community members through their referral program. Members get a free ride on bringing in another new customer to the community.

It would help if you also were on their social media screens every time. A more significant percentage of internet users check their social media every day. This makes it the best place to remind them of your presence and loyalty programs continually. Organize contests and encourage your community members to participate. Your brand must always pop up on their feeds.

Always make sure that they relate to your business every week. You could also make them engage in surveys. They will like to fill it all out to get discounts and bonuses.

  • Membership page

There must be a membership page for fairness, especially for tiered programs. This page will contain information about the points to acquire for promotion to each level, bonuses, and terms and conditions. Members can always check this page to compare what they are getting to what you promise. This will even make them develop more trust and confidence in your brand.

  • Multicurrency and multilingual

This is essential if you’re serving in the global ecommerce market. Your bonuses should be available in all currencies of the countries you operate, not only in US dollars. Customers should be able to use discounts earned when paying with their local cards.

5 Loyalty Programs Examples for Inspiration

Newegg commerce is an online computer hardware and electronics retail platform owned by Liason Interactive. The online marketplace was launched in 2001 and has gained more than 40 million users between then and now. This could only be possible because of their brilliant and well-curated loyalty program.

The incentive program strictly rewards customers’ participation, including engaging in promotional events, writing reviews, providing feedback as loyal customers, and buying products with the EggPoint badge. Points are awarded to loyal customers and can be redeemed for cash. One hundred points equal one dollar.

Customers have 90 days to redeem their points once available, and the money can only be spent on NewEgg. These rules usually force loyal customers to buy more gadgets on this platform as they wouldn’t want to let their points expire. It’s an excellent campaign strategy for ecommerce businesses.

Team Tarte is the loyal community of Tarte cosmetics, a company based in New York City. Tartecosmetics.com is the brand’s ecommerce website, where they sell all kinds of makeup and skincare products. The brand currently runs a loyalty program, popular for rewarding non-transactional interactions.

Customers get rewarded for doing the least, like referring a friend, signing up and completing a membership profile, answering questions, and opening newsletters. Meanwhile, massive points are given out on the purchase of products, depending on the size of the products. Full-sized product purchases get 100 points, and 50 points go to purchasing a medium-sized product.

The program uses the 3-tiered system. Promotion happens with the collection of a certain number of points. The benefits get exciting and enjoyable at the higher levels. In addition, Tarte has a special shop app for members where they can exchange their points for merch, product samples, and coupons.

Small businesses are not the only beneficiaries of loyalty programs. Big companies also use incentives to attract and keep their customers. Walmart is a popular brand in the ecommerce industry and a big competitor of Amazon. In 2020, when ecommerce marketing was rising, the company launched a subscription-based loyalty program that has helped to amass millions of loyal customers worldwide.

The loyalty program offers benefits such as free delivery of products and one-day shipping, early access to exclusive products, five cents per gallon on gas purchases at over 2000 different stations, and contact-free checkout, to mention a few. According to Walmart, customers save an average amount of $816 every year with this program.

PetSmart is a retail company specializing in pet products such as pet food, habitat, furniture, and accessories. The brand uses a point-based loyalty program. Customers get 1000 points for joining the program and earn 8 points for every $1 spent on the platform. Other rewards include surprise gifts on a pet’s birthday and a free doggie day camp session after purchasing ten products.

Do you know you can also give out free workshop tickets to your customers? IKEA, a furniture retail company, gives customers free event tickets. They use the perk loyalty program and reward their loyal customers with free packs of teas and furniture repair services.

Taking Your Ecommerce Marketing to The Next Level with Loyalty Programs

Loyalty programs are tested and trusted. Many big and small companies have used these programs to boost their revenue and keep their customers. And till now, loyalty programs work, and you can make them work for your brand too.

Study this guide, and pick the loyalty program that best suits your brand. Make sure you plan very well before your start. The loyalty program should be mission-driven and consistent from the very beginning. Also, make sure it’s fair to all participants.

You can launch this program by either building an exclusive loyalty app for your business or using tools like our Loyalty Program. We wish you luck in the journey.