Your job never ends when a customer makes a purchase.
Sure, most of your marketing campaigns are directed towards increasing sales on your website.
But once your customer does that is when the real game starts. The game of retention.
Considering the competitive landscape of the online retail industry, you need customer loyalty programs that encourage customers to have a long-term relationship with your brand.
70% of customers believe loyalty programs are among the most important factors in staying with a brand. Numerous eCommerce brands have embraced loyalty programs to increase customer lifetime value and retention.
However, if everybody is doing it, you also need to do something different and pick the best loyalty program for eCommerce business that works best for your brand. Let’s check them out.
What are eCommerce Loyalty Programs?
An eCommerce loyalty program is a marketing method for online brands to nurture and reward their best and repeat customers. The idea is to encourage repeat purchases and strengthen customer loyalty online. Most eCommerce loyalty programs provide varied rewards like discounts, early product access, free order fulfilment, and other types of special treatment to loyal customers.
In the competitive industry of online retail, eCommerce stores are finding it a daunting task to make customers stay after their first shopping experience. Ecommerce loyalty programs are what sustains a business and set it up for long-term success. It also helps you focus on leveraging your competitive edge for the betterment of customer lifetime value and retention.
Why Loyalty programs for eCommerce are Important?
- Every marketer knows that it’s easier to retain an existing customer than to acquire a new one. In terms of costs and efforts. Ecommerce loyalty programs help you retain customers by offering appealing offers and special deals to a selected group of customers.
- Loyalty programs also help you acquire new customers since it gives them an incentive to buy from your site. Satisfied customers are more likely to spread the word about your business and increase your word-of-mouth marketing.
- Considering that loyalty programs increase the spending of returning customers as well as new ones, it directly results in increased sales for your company.
- Employee loyalty programs like reward programs, enable you to build long-term customer relationships. It creates a strong brand allegiance as you reward your customers and they reward back to you with customer loyalty. It also helps you understand your customers better and adjust your offerings better suited to their needs.
How to Reward Customers with Different Types of Loyalty Programs
Ecommerce loyalty customers can be divided into five categories. Most current programs of online brands majorly fall into one of these categories which are
1. Point-based Purchase
Points programs are one of the most common customer loyalty programs in eCommerce. Customers here earn points for every purchase they make on your site. After earning points up to a certain amount, customers can redeem these points for a special discount, freebies, cashback, or perks.
The incentive of earning more rewards encourages customers to become frequent shoppers. Customers can also earn personalised discounts on their birthdays as Starbucks does, and even earn points for sharing on social media, subscribing to a newsletter or becoming a member.
2. Tiered Rewards Program
Tiered programs are those where customers move up a rank at regular intervals and get better benefits and privileges with each higher stage. Ecommerce brands often decide the ranks of customers based on their sales, purchase history, or engagement. The higher the customers’ tier, the more exclusive or better rewards they’ll receive.
For example, Uber categorises their customers into four tiers which are: Blue, Gold, Platinum, and Diamond. For their Gold customers, the customers get flexible ride cancellations and priority calls. Diamond customers get the most benefits like premium support, highest-rated drivers, premium ride boosts, etc.
3. Paid Membership programs
Paid loyalty programs give customers immediate benefits in exchange for a participation fee. These fees can either be a one-time fee or a recurring one that the user has to pay after three months or a year.
For example, Amazon allows shoppers to subscribe to its Prime membership with an additional fee. With that subscription, prime members can get special benefits like next-day shipping, free shipping, and no-rush order fulfilment without a minimum purchase. Paid loyalty programs make customers 43% more likely to buy weekly after joining.
4. Value-based Loyalty Programs
Value-based customer loyalty programs in eCommerce work best for the socially responsible customers of today. In this type of program, when a customer orders from your brand, a third party or a charitable cause benefits from the transaction. Even though such programs don’t reward customers directly, the idea is to connect with the customers on a deeper level.
Brands provide multiple options for charities from which customers can choose those that align with their values. Many brands offer a hybrid loyalty program that benefits both the customer and allows them to contribute a part of their rewards to charity.
5. Universal Programs
Universal loyalty programs are a new twist to standard eCommerce loyalty programs where members get the traditional perks of member discounts and free shipping but they get these benefits for multiple vendors or brands. You can earn points from one brand and redeem them with another. For example, Starbucks points can be redeemed from not just Starbucks but also from Uber Eats and Lyft.
Best eCommerce Loyalty Program Ideas
1. VIP Exclusive Clubs
VIP programs are those where selected customers get special access and exclusive perks such as discounts, access to premium goods, and other rewards to a group of customers. For example, if you have a store for special items online such as jewellery or antiques, you can invite VIP customers to launch events or exclusive shopping sessions. Some other perks can include early access and members-only clubs.
Such eCommerce loyalty programs can promote brand advocacy, increase sales, and shape consumer behaviour for your products. For example, Adidas’s Creators' Club is a VIP reward program by Adidas divided into four categories. Customers in the highest status in this club enjoy invitations to special events, complimentary concerts, games, and meet-and-greets with athletes.
2. Free Shipping Options
Shipping costs are one of the major reasons why customers abandon their carts. Having an eCommerce reward program centred around getting free deliveries and quick order fulfilment can encourage many buyers to subscribe to your reward program. 55% of customers see free shipping as the top benefit of an employee rewards program.
You can combine this reward with purchase points and tiered and paid membership programs. For example, in the case of Amazon, it not only offers free shipping to its prime members but also provides the option of same-day shipping or expedited shipping. Have a freight provider with micro-order fulfilment units that can accommodate your expedited shipping requirements to your national and international customers.
3. Bonus Points
Since points on purchase are one of the most popular loyalty programs run by eCommerce brands, it is worth it to give it a try. You can be flexible as to how the customers will earn the rewards. For example, the nail brand Olive & June provides points for every activity that the customer performs on the app or the website.
For signing up, the customer gets five points, another five points for leaving a review, one point for one dollar on purchase, forty points for joining the membership, etc. Customers can redeem points in various ways. The higher the number of points, the higher the value of the reward. SHEIN, the fashion brand, uses the same method and the customers use these points to deduct up to 70% of the total price of their order.
4. Referral Rewards
Referral programs are also known as affiliate programs. An eCommerce referral marketing program involves a system of incentivising your current customers in exchange for them to refer new people to your business. When their referred customer makes a purchase, they get a discount, credit, small gift, or other valuable perks.
For example, the footwear company, Allbirds offers both the referrer and the referee a $15 discount if the referral is successful. Similarly, the healthy snack delivery company “Love with Food” offers the referrer a free box and 1000 ($10 value) whenever someone uses their referral link. The referrers can also fund their subscription with a single referral a month.
5. Giveaways
Customers are generally hesitant to purchase from a brand the first time. They know it’s a gamble. To make it easier for them, you can foster loyalty from the first purchase by offering giveaways to selected customers. Who doesn’t enjoy free stuff? Explore what your audience would want and give your product that you know they’d love.
You can try partnering with an influencer that is related to your brand to promote giveaways. It can work wonders for your brand awareness and even create a few loyal customers along the way. It helps you retain existing customers and also promote your business to a new audience.
Concluding Remarks
Loyalty programs help eCommerce businesses build lasting relationships with their customers which boosts repeat purchases and long-term brand loyalty. It also results in a win-win situation for both the eCommerce merchant and the customers where the store sees the result in more sales, increased revenue, and repeat purchases, the customers get the benefits in terms of lower costs of purchase, free and expedited shipping, and exclusive access.
To offer loyalty rewards like free shipping and one-day deliveries, you need a strong 3PL partner who understands the importance of customer satisfaction and what is at risk. PACK & SEND can help you deliver at optimised times with best logistics practices that improve your eCommerce growth. Contact us to know how you can fulfil eCommerce loyalty rewards with logistics and leave a lasting impression on your customers.