Loyalty Program for an Ecommerce Shop

Learn More About Taking Advantage of a Loyalty Program

One of the most important ways in which you have to look at a loyalty program for an Ecommerce shop is from the customer’s point of view. First you have to think of the benefits that your customers get from such a program, because they will ask themselves “What do I get from this kind of program?”. Taking into consideration the fact that it costs 7 times more to gain a new customer than keeping an old one, it is vital to make your current customers shop from your store as much as possible.

Types of Programs

  1. Points system: it is one of the simplest ways of rewarding your clients. Every time clients will purchase from your shop, they will receive a certain amount of points.
  2. Tier system: this system is based on on levels of loyalty. It is usually used for long term members who are making sales from your site.
  3. Partnership program: it is based on association with other businesses. In this way, clients can receive points if they shop from any other store that you have partnership with and use those points while shopping in your store.

Steps to Take in Order to Run a Loyalty Program System

First of all, in order to implement a loyalty program, you have to decide what you want to reward your clients for. Obviously, you have to reward your clients for making purchases, but eCommerce point system gives you the possibility to reward your clients for reasons such as birthdays, account registration, Facebook likes and shares, Instagram follows, referrals etc.

  • Account registration: they enable your customers to checkout faster in the future. You will be able also to take advantage of marketing opportunities on email.
  • Referrals: they are the best form of advertising and also the most trusted one. One good part here is that your clients get the reward only in the moment they create a sale for you.
  • Birthdays: they are one of the best moments in which you can reward the customers that you have. You can award your clients for this event in their life.
  • Social channels: if you have a strong social following, your system will also have success. You can reward your customers if they engage with the social channels that your business has.

Secondly, you have to name your loyalty and rewards system that you want to use. This thing is usually underrated but having an identity of the system and an identifiable, unique name can have a bigger impact than you might think. It is applied also for loyalty points. If you present them as points, they might seem boring or even worthless for the customers that you have. For this step, you have to think about creative name that will excite and attract your shoppers.

Thirdly,if you use, for instance, an eCommerce point system, you have to decide the value that the points you are giving have. For instance, you can give to a point the value of 1$. Therefore, each dollar spent by your shoppers will bring them one point. The value that the loyalty points have is known as redemption value. It is recommended to keep things the way they are and track the behavior of your clients if you don’t have at least a year’s worth of data. You can build your own eCommerce shop with our marketing automation bundle and offer points to your costumers.

Then, in the same case, you should think about how many points you should reward. If you have decided how much your points are worth, you need to decide for what action you will assign the points for. In order to do this, you have to think about the value the actions have for you. As an example, if you give 2$ worth of points to your clients for following the page of your business, you can consider that 2$ as an investment in 3 other people that will also follow the page afterwards.

In the end, you have to create a page where you will explain the way of working of the system. You can write there what actions get rewarded, how many points they can gain, what is the value of one point, how they can use their points, etc. The more visible the system is, the more effective it will be.

Benefits for Your Company

1. Maintain the Relationship With Your Current Clients 

One misconception that people have when it comes to rewards program is that they are expensive. The truth is that keeping existing customers is much more cheaper than trying to get new ones. Those loyalty and rewards systems help you in building the relationship that you have with customers. The old shoppers want to have some benefits, different from the monetary ones. With the eCommerce point system you can implement a more personalized structure for your clients, which can be part of your community. There are many way in which they can be able to collect points, like sharing on different channels of social media, inviting their friends or taking part in different contests. You can give your old customers samples of new products in advance, before they are released or invite them to certain events that they might attend.

2. Increase the Sales

Reward programs increase customer loyalty and the retention of your clients. If your provide your customers with incentives that are in tune with what they want, you will encourage them to come back and shop from your store. Studies show that almost 15% of clients are loyal to a single retailer from 55-70% of the total sales that they make. This means that half of the sales that you have come from a small percentage of your client, therefore maintaining a good relationship with the customers that you already have is really important.

3. Attract New Customers

Although there is more effort and resources to put in engaging new customers, it is not something that you can neglect. Many of the customers that companies have believe that they are not rewarded enough for their loyalty, which might change in time their buying habits. You have to give your customers a reason to stay and show them that you care.If you have a lead nurturing strategy in place, it will not only give existing customers a reason to stay but it will also make current or new clients come back.