Thanks to the surge of online sales, the eCommerce industry is now experiencing unprecedented growth and innovation. 

But that also means a pressing need to retain customers in an atmosphere of intense competition. Investing in the customer buying experience and ensuring that they have a positive outlook of your online store is crucial to retaining them. 

One of the ways to do that is through eCommerce loyalty programs. Research suggests that 64% of customers are encouraged to buy from an online store if they’re part of their loyalty program. 

What are these loyalty programs, and how can you create programs that convert to higher revenue?

Let’s find out. 

What Are Loyalty Programs In eCommerce? 

eCcommerce loyalty programs are an online marketing strategy that aims to reward and nurture their best customers through reward points, free deliveries, exclusive offers and discounts, and so on. 

Strategies For Creating Loyalty Programs That Convert In eCommerce 

1. Determine your goals and audience 

When you talk of loyalty programs, there is never one strategy that fits all. Some loyalty programs increase customer lifetime value, while others can focus on improving direct sales, etc. Before opting for a loyalty program, you need to know what your goals are and how your loyalty programs align with them. 

Adopt the SMART goal technique as it helps you create an actionable goal instead of a vague one. For example, if you want to increase sales, set the loyalty reward goal of increasing sales by 30% by the end of the third quarter. 

2. Choose the best loyalty program that works for your online store 

There are numerous loyalty programs, such as:

• Point-based programs: Allows customers to collect points after completing a particular action, such as a sign-up or purchase. 
• Universal loyalty programs:  These programs are those where customers can get access to special benefits like free shipping and member-only discounts for multiple vendors. 

• Paid programs: Customers usually are required to pay for a membership yearly to get exclusive access. 
• Tired loyalty programs: As customers spend more and become repeat customers, they get bigger and more exclusive benefits. 

Your choice of loyalty programs will depend on what your end goal is and what brings the maximum benefits to your online store. 

3. Integrate rewards at checkout 

Allow customers to claim rewards directly from there as this way you can integrate your loyalty programs right into the ongoing customer experience. Ensure that your checkout process is seamless enough for your customers so that you can also reduce your cart abandonment rate. 

To ensure that your loyalty programs fetch the maximum benefits at the checkout stage, integrate an eCommerce monitoring platform that helps you rectify technical errors and ensures purchase completion along with loyalty rewards. 

You can also implement rewards and give client gifts at stages where the cart abandonment rate is the highest. For example, if your customers are abandoning the cart due to high shipping costs, provide free shipping to members or to customers who purchased up to a certain amount. 

4. Communicate loyalty benefits

None of your loyalty programs are going to reap benefits if your customers don’t know about them and how the loyalty program is advantageous to them. Share your loyalty programs with customers ahead of time so that they’re motivated to purchase and get access to exclusive events and even look forward to product releases. 

You need to communicate to your customers that there is real value in joining your loyalty program. You can do that by conveying valuable information at multiple touchpoints such as landing pages, customer portals, social media channels, and email campaigns. 

5. Add urgency at every step

Adding urgency to your loyalty programs helps you drive action. For example, Pure Vida has a loyalty offer where customers can get a 50% discount on their first order if a purchase is made in the first 24 hours after sign-up. Customers are encouraged to purchase if they come across such an offer at a discounted price.

6. Leverage customer data to personalize 

While considering your loyalty programs, it’s better to leverage customer purchase history and data rather than play the guessing game. Segment your customers into cohorts based on their behavior and identify what the journey of your highest-value customers looks like.

Even the most personalized customer experiences can get derailed if you do not have a good process to monitor and eliminate the errors in your eCommerce store. These errors can even lead to cart abandonment or loss in sales. Having a strategy to prevent and carry out eCommerce error resolution actively on your website will help you get your basics in order so that you can start building a better customer experience from the get-go.

To get the customer data, you can use various marketing and analytics tools along with your CRM data to create more customer-centric loyalty programs and programs that increase customer lifetime value and average order value. 

7. User tiers programs to increase loyal customers 

Most eCommerce brands are embracing tiered loyalty programs simply because it is proving an effective way to generate repeat customers and also increase sales by creating exclusive benefits. 

For example, the online store MZ Wallace offers a loyalty program where they segment customers into:

• Silver: for customers that spend up to $200
• Gold: for customers that spend between $200 and $1199
• Platinum: for customers that spend more than $1200

VIP and platinum members enjoy exclusive perks such as early launch access, access to VIP events, free shipping, and exclusive gifts. A similar program can help you incentivize repeat purchases and foster customer loyalty. 

8. Invest in customer loyalty software

Managing customer loyalty programs across multiple customer demographics and geographical locations is daunting. You cannot keep track of your programs if you don’t have a consolidated system where you can get a comprehensive outlook of your loyalty programs. Hence, integrate customer loyalty software to organize and streamline your programs. You can also outsource this work to a digital marketing agency. 

Such tools essentially calculate the total points by individual customers, allowing them to buy and redeem points. It also offers other benefits such as interactive tools, insights into repeat purchases, your most-valued customers, popular incentives, and feedback so you can tweak your programs accordingly.

Leveraging a tool can considerably automate your loyalty program process so that you can focus on ensuring customer satisfaction.  

Conclusion

All marketers universally believe retaining current customers is cheaper than acquiring new ones. Identifying high-value customers and offering them special benefits can go a long way in fostering brand loyalty and goodwill for your online store. 

Loyalty programs in eCommerce are those that stem from creating a win-win situation for customers as well as the brand. Having goals, aligning your loyalty programs with them, and carefully crafting the communication to convey your programs is essential to your loyalty program’s success.

That way, you can utilize loyalty programs to scale your business and build a loyal customer base.

Author Bio

Carl Torrence is a Content Marketer at Marketing Digest. His core expertise lies in developing data-driven content for brands, SaaS businesses, and agencies. In his free time, he enjoys binge-watching time-travel movies and listening to Linkin Park and Coldplay albums.