5 Tips on Building a Successful Loyalty Program for eCommerce in 2021

A loyalty program is a must-have for modern e-commerce brands. In order to retain your customers, you need to ensure they are rewarded for their loyalty. According to Bond, 73% of shoppers are more willing to recommend a brand with a good loyalty program.

Lyft, Uber and Airbnb have opened the eyes of a lot of companies that loyalty programs are not just about collecting points. These giants understand that people want to be appreciated for their business and your customers are the same. Hence, the new e-commerce loyalty program strategies which now exist in order to make them feel special for spending their money with you.

If you want to build a successful e-commerce business, then you need to build a strong loyalty program. There are many practices that you can increase your conversion rates. If you want to know what the top e-commerce businesses have done to improve their conversion rates, then read on!

What is a loyalty program?

A loyalty program is a marketing technique, which encourages customers to make repeat purchases by incentivizing them on their subsequent orders. Loyalty programs help retain customers and increase in-store conversions and reduce in-store cart abandonment. Loyalty programs are very common among brands like Starbucks, Amazon, Subway, Uber, Snapdeal, Ola Cabs, and others.

Why is building a loyalty program important for e-commerce businesses?

Today loyalty programs are a critical part of any large e-commerce business, especially online retailers. According to Experian, 75% percent of brands see a return on their investment in a loyalty program.

Building a loyalty program keeps customers coming back to your business over and over again. It does this by encouraging repeat purchases, increasing engagement across social media platforms and offering rewards that the customer will love.

Undoubtedly, loyalty programs are essential for any e-commerce business. But how to build a successful loyalty program? Let’s find out in these simple steps:

Build your customer database

If you're trying to build a successful loyalty program, you very likely will need a customer database. Building a customer database is a key element in building up and managing your loyalty program. But many small business owners don’t realize how important this marketing tool can be. A customer database allows you to better know your customers and gives you the great advantage of being able to better tailor your program in terms of content, rewards, and special offers tailored to meet their needs.

You can collect your customer data by integrating a social login app that will automatically gather and organize customer information. Also, you can set up pop-ups to remind your customers to sign up or create an account on your website. This will allow your customers to automatically enroll in a loyalty program without having a separate login into the program.

Ditch traditional loyalty programs

Traditional loyalty programs are not good for business. They're very costly to implement and operate, while not offering the flexibility your customers deserve. In addition, they do not allow you to capture lots of data so that you can tailor your marketing efforts to suit your customers’ needs, wants and behavior. What's more, the costs of traditional programs continue to skyrocket with no end in sight. Customers hate them. They are forced to carry multiple cards from a number of different retailers and can never really keep track of how many rewards points they have accumulated with each individual firm because each loyalty program differs in terms of what it offers its members.

Instead, focus on building a loyalty program that is easy to understand and use for your shoppers. For instance, create a mobile app for your loyalty program where customers don’t have to carry around several plastic cards that are often get lost.

Give an extra incentive for top spenders

Did you know that when you offer an incentive or deal for your top spenders, they will spend more on your store? Sounds bizarre but it is the truth. In fact, loyal customers spend 67% more than new ones through repeat purchases, larger cart sizes, and frequent upsells.

Sometimes, it is way more cost-effective to retain loyal customers rather than acquire new shoppers. Giving away special offers to 'top spenders' is an excellent way to reward your most loyal customers and make them feel appreciated.

The bottom line: don’t let your top spenders walk away with nothing. Get creative and competitive and offer incentives that will make them come back, again and again, to buy from you.

Make it easy for your customers to keep track of their loyalty status

Do you have customers who have to make a hundred calls or visit your website every time they want to check their loyalty status? If yes, you’re fighting a losing battle to retain those customers.

It’s a busy world and time is precious to everyone. No one wants to waste a second of it, including your customers. This is why they want to get access to their points as quickly as possible. It’s easy for a customer to lose track of their rewards status on a loyalty program if the process of claiming rewards takes too long. Your customers should also know what they need to do in order to redeem rewards when necessary.

A good loyalty program app can help you do all the above. Nowadays loyalty programs are designed to be customer-centric and keep shoppers up to date with their loyalty and rewards status.

Keep track of your loyalty program success

You’ve implemented your loyalty program! Now what? Keeping track of its growth and making changes along the way is always important. Your goal should be to increase your revenue through repeat purchases using data collected from your loyalty program. Using loyalty management tools can help you to understand how the program is running to make sure you’re getting the results that you want. By analyzing the results and customers participating in your loyalty program you can easily tweak and change it to get better results. As in any type of business, understanding the data is the key to measuring success.

Wrapping up

There isn't one single silver bullet solution when it comes to building a successful customer loyalty program. Keep your loyalty program clear and consistent and it will keep customers returning again and again. Don’t focus on building a one-size-fits-all loyalty program because it will make your shoppers turn away from your store. By understanding your customers’ needs and constantly improving your loyalty program you can increase engagement and gain repeat sales.

We hope that by now you know how to build a successful loyalty program and found some insightful tips in this article!

Author’s Bio

This content was written by Polina Kulikova. Polina Kulikova is a digital marketeer at Growave, and she is passionate about creating content for e-commerce businesses to help them succeed. Growave is the all-in-one marketing platform for small and medium-sized Shopify stores. Growave helps to drive conversions, boost sales, and build brand loyalty. Some of Growave's features are Reviews, Loyalty and Rewards, Wishlist, Social Login, Instagram and UGC.