5 Ways To Build A Successful eCommerce Loyalty Program For Higher Customer Retention In 2021

The most effective methods of building a strong customer loyalty program for your eCommerce brand.

October 9, 2020

Loyal customers spend more money with brands that make them feel appreciated. 78% of them will tell their friends and family about a good experience they had.

As a method of customer retention, eCommerce loyalty programs help keep and engage existing customers to convert and interact with your brand more frequently.

In this article, we’ll take a look at different types of loyalty programs and ways to streamline your loyalty plan as a way of engaging and retaining buyers.

eCommerce Loyalty Programs: What Types Are There?

We’ll first look at the different types of widely used loyalty programs.

  • Points system: This type of program is based on the principle of buyers spending more to collect more points that can be redeemed for discounts, special items, freebies, cashback and so on. It’s suitable for shoppers with frequent and low-cost purchases.
  • Tier system: Based on loyalty levels, this program pushes the buyer up the rewards tier. The more they buy, the higher they go. The goal of this program is to keep buyers for the long term and is most often used by businesses whose customers make big purchases. For high effectiveness of its tier system, a business should start with a base reward given to buyers for simply being a part of the program and make higher tiers easy to achieve to reduce program abandonment.
  • Partnership program: Forming partnerships with other businesses is particularly effective at retaining a millennial audience. These loyalty programs present consumers with more choices, which is important for 82% of them. This method is great for raising brand awareness and aligning with up-and-coming brands.
  • VIP program: With these types of loyalty programs, consumers gain access to exclusive benefits such as priority access to new products and events, discounts, freebies, personalized customer support and more. To join VIP programs, customers may need to pay a membership fee.
  • Hybrid program: eCommerce businesses most frequently use this type of loyalty system that combines some of the above program types to maximize program efficiency and drive specific results.

Now, let’s discuss how to create a successful loyalty plan for your eCommerce website.

1. Organize Your eCommerce Loyalty Program Into Tiers

Loyalty programs that are separated into multiple tiers motivate customers to engage with the eStore business continuously and repeatedly which presents a very clear objective to them. 

Tier programs’ low-end and high-end reward economies make customers with a higher tier status less likely to turn to a rivaling business, because they don’t want to abandon the perks they worked hard (and spent a lot) to earn.

2. Offer Buyer Rewards

A rising number of eCommerce loyalty programs present their prospective and existing buyers with rewards they find valuable. 

These rewards can be discounts, cashbacks, coupons and one-of-a-kind incentives like shopping cards and gifts, but also branded merchandise, limited-edition items, autographed goods, entry tickets to fan events and more.

3. Use Gamification

Gamification provides buyers with a sense of personal achievement by asking members to participate in activities, such as completing fun tasks and challenges in order to collect badges or points to climb the leaderboard. The goal is to create a habit in customers to visit your eStore frequently.

This tactic ensures a high level of user engagement because it motivates buyers to log into their account and engage with your brand even when they’re not buying anything.

Ways to use gamification in eCommerce include:

  • Fun product recommendations based on a user’s tastes in music, personality, horoscope, pets etc. (the info you can ask them about when they create their account)
  • Product quizzes that improve product awareness and are linked to product pages and points system that can be redeemed in cash
  • Wheel of Fortune-type of minigames that give away discounts and freebies
  • User avatars that customers can create and claim points with for each purchase 

4. Add A Personal Touch

Shopping experience personalization is an important buying decision factor for 86% of consumers, while 87% of them say that they feel more motivated to buy more when online shops personalize their experience.

By personalizing your services to your customers, you make them feel seen and heard. 

Making yourself available to customers via various channels such as chat, social media and email is important, because being there for them on a personal level makes them more likely to return the favor by completing surveys, subscription forms, polls and more.

Customers also appreciate when they can enjoy personalized products recommendations based on the history of their purchases and their general personality.

Building authentic relationships with your buyers is the best way to build customer loyalty. The more tailored to your individual buyer your eStore experience is, the more successful it will be.

5. Engage With Your Customers Outside Of The Buying Cycle

It is critical to meet your consumers and their needs even when they are outside the buying cycle and conversion funnel.

It’s not enough to only reward them once they buy an item, because that fails to deliver an emotional impact. 

Your eStore should give reasons to your shoppers to come back each day and motivate them to log in on a daily basis by:

  • Providing Friend Referral awards
  • Asking them to write a user review in exchange for a discount on their next purchase
  • Asking them to upload their own photos of purchased items
  • Giving them surveys to partake in
  • Enrolling them in competitions

This helps existing consumers to keep your business in mind, preventing them from switching to a competitor.

How to Implement Loyalty Programs with Blue Bite Experiences

There are a variety of ways to implement loyalty programs. Some companies use a dedicated mobile app, some require logging into a website, some rely on traditional methods like punch cards.

Regardless of the type of loyalty program you are implementing, building it as part of a Blue Bite-powered digital experience is a great, easy and scalable way to keep your loyalty programs top of mind for your consumers. It's also a great way to implement product commerce as part of the loyalty experience.

Blue Bite digital experiences are connected directly to products via connecting technologies like QR and NFC. All a consumer has to do is scan these technologies with a phone to access the digital experience. When a loyalty program is built into that digital experience it becomes part of the product itself, encouraging repeat and ongoing interactions and making loyalty programs even more effective.

What Are The Benefits Of Customer Loyalty Programs?

For eCommerce businesses, coming up with detailed, well-structured customer loyalty programs comes with these benefits:

  • Retention of existing customers: This is a potential money-saver, because it is five times more expensive to gain a new customer than to keep an old one.
  • Acquisition of new customers: With that said, having loyalty perks and benefits is a strong lead magnet for attracting new prospects.
  • Return of lost customers: A loyalty program can serve as a big incentive for lost customers to come back to your online shop business.
  • Rise in revenue: Loyalty systems convert first-time buyers into repeat buyers and repeat buyers spend more.
  • Increase in customer lifetime value: This is the result of the increase of a customer’s shopping frequency.
  • Identification of your best/ideal customers: A loyalty plan identifies your best customers – those that keep coming back to you. This reveals a pattern in their behavior and general traits. You can use this data to inform your future marketing strategies in order to target the most qualified audience.
  • Cut down advertising costs: Knowing who your ideal customers are reduces the cost and time needed to do the market research. It also improves ad targeting to be more accurate by directly advertising to new consumers that fit the profile of your best customers. 
  • Attain customer advocacy: Repeat customers act as your brand ambassadors/influencers by using word-of-mouth to tell their friends what they love about your brand.
  • Be different from your competitors:  A carefully tailored loyalty plan makes your brand unique in the eyes of consumers. A loyalty plan incorporated into outstanding web design is a great asset that will further help your eCommerce brand stand out. 

This is a guest post by Andrej Vidović, a Content Specialist at Digital Silk. His writing expertise is in B2B, digital marketing, branding, eCommerce and web development. He is an avid traveler and likes to spend time visiting museums and learning new languages.

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