How to offer a customer loyalty program in ecommerce

Did you know that increasing your customer retention rate by 5% increases your profits by up to 95%? And that it costs 5 times more to acquire a new customer than to retain an existing one? Data like this highlights the importance of creating a loyalty program for your company.

What is a customer loyalty program?

Too often, companies choose to focus on attracting new buyers, leaving its current customers at the mercy of the competition.

It’s understandable that you want to increase your customer base, but it’s essential to maintain contact with people loyal to your brand, who contribute to your success and the sustainable growth of your business.

How do you do this? Well, one solution that yields great results is creating a customer loyalty program.

In recent years, more brands have started to think about the best way to encourage and reward loyal customers. 

Part of a broader marketing strategy, a loyalty program is essentially a rewards program that aims to offer benefits to repeat customers.

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Advantages of offering a loyalty program

See some advantages that this strategy brings to your e-commerce:

Increased sales

Keeping your current customers happy is key to business growth.

Data shows that dedicated customers bring better financial results. See below:

• The probability of selling to an existing customer is up to 14 times bigger than the probability of selling to a new buyer.
• Existing customers are 50% more likely to try new products and spend 31% more on average compared to new customers.
• New customer acquisition costs have increased almost 50% in the last five years.

Brand promotion

Not only are loyal customers more likely to buy from a brand they trust, they’re also more likely to say good things about your business.

With social media being a driving force in referral marketing, anyone can become a brand ambassador.

According to the Temkin Group, 77% of customers recommend a brand to a friend after a single positive experience.

These “spontaneous marketers” complement your outreach efforts by helping you save time and money on the work of acquiring new customers.

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Increased Customer LifeTime Value (CLTV)

Customer Lifetime Value is a metric that estimates the total profit that a customer will generate for your company throughout their relationship with it.

It calculates the current value of each customer and also projects the value of your interactions with them into the future.

One of the main benefits of having a loyalty program for your business is that it can help you calculate the exact CLTV for each of your customers.

You can use this information to implement solid marketing and sales strategies that help retain the customer for a longer period.

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How to Use a Loyalty Program to Retain Customers

Your loyal customers are in a relationship with your brand, therefore, pay special attention to recognition and rewards.

Create a relationship

Consider what mechanisms you have in place to capture valuable data about your customers’ purchasing behavior.

Then, use this data to strengthen your relationship. For example: Has it been two months since their last purchase? Check if they’re satisfied. Is your e-commerce site running promotions or launches? Send them a heads-up so they can take advantage.

Tailor your communications as much as possible.

Personalized messages make customers feel valued and contribute to brand loyalty.

Offer exclusive benefits

There are several ways to do this:

• Exclusive discounts
• Points program that can be exchanged for products
• Fast delivery for subscribers
• Priority service
• Early access to releases and promotions

Remember that loyalty programs don’t have to be limited to just freebies.

Use creative ways to let your loyal customers know you appreciate their devotion to your brand and give them a good reason to buy.

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Keep the rewards coming

A one-time benefit offer won’t keep your customers loyal, as they won’t see any value in your program.

If a customer only receives a reward when signing up, or finds it too difficult to meet the requirements to earn more points or benefits, you will not be able to cultivate true loyalty.

Set rewards that can be earned repeatedly, otherwise you risk making your customer forget that they ever signed up for your program.

Amazon is a great example of how to do this. By subscribing to its Prime program, customers have access to a list of benefits every time they make a purchase, such as fast delivery with no minimum purchase amount for most items in its catalog.

Keep your customer satisfied and sell more

A successful loyalty program leaves your customers excited to continue doing business with you for a longer period of time.

The engagement and incentives will make them spend more with your brand and more often, strengthening its lifetime value.

Whether your program offers loyalty points per spend, express delivery, or exclusive offers, it can create a revenue stream more accurate and constant without a high cost to your business.

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Providing quality customer service is essential, which is why when it comes to online shopping, you must take every precaution to ensure the best possible delivery service.

Delivery app, the Delivery365 allows you to set up your online store in just a few steps and start selling products and services immediately.

Specializing in e-commerce, the app features tracking technology, its own online shipping quote system, online payment methods, and much more.

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To learn more, visit our website, get to know our services, offer the best delivery service and build customer loyalty.