With a growing number of customers choosing online shopping over offline shopping, it’s a great time to start and run an eCommerce business. So why would you even need a customer loyalty program when the whole eCommerce ecosystem thrives?
Actually, that’s exactly the reason.
Today customers have an abundance of online stores to choose from and all of them are competing for their attention (and wallets). Even if you manage to win customers with a profitable acquisition cost, you’re much less likely to retain them for a second purchase. That means next time your customer will look online for the products you sell, you probably won’t be the top-of-mind choice.
Best case scenario? You’ll end up paying for acquiring the same customer TWICE. A well-thought-out eCommerce loyalty program is a solution to this problem. If you manage to build a mutual relationship, you’ll end up with loyal customers who will trust and like you, which will greatly increase your profitability.
In this article, you will find the most recent, reputable, and effective methods of creating a successful loyalty program for your eCommerce store. Let’s dive right in!
What is an eCommerce loyalty program?
You have probably seen some big names in the eCommerce industry doing it. Maybe you even saw one in your competitor’s store and were wondering how it is working out for them.
Before we get into more details, let’s answer a simple question: what exactly are customer loyalty programs in eCommerce?
There are many different definitions, but for our purposes, let’s say that a loyalty program is a marketing system based on the principle of encouraging repeat purchases from existing customers by rewarding them for various actions. It can also be described as a strategy to build closer customer relationships by offering valuable incentives.
The main goal of your eCommerce loyalty program should be placing your first-time customers on a path towards becoming regular purchasers and connecting with them deeply so they are less likely to shop from your competitors.
Starting an eCommerce loyalty rewards program may seem like a daunting task. There are so many aspects to consider when deciding on a rewards program, including budget, technology to use for the program, the types of rewards you want to offer, and how you want to incent members. We will address all those concerns below.
How a loyalty rewards program works and what it can do for your business
Loyalty programs are a great way to keep customers happy. They also help with bringing in new business. By now, you must have realized the potential of loyalty programs for e-retailers but don’t know how it will fit into your strategy. To better understand how you (and your customers) can benefit from one, you should better understand the underlying mechanisms.
eCommerce loyalty programs are basically about creating a sense of ‘stickiness’ in your customer base. If you want to keep users coming back to your store, great products and customer service might not be enough in today’s competitive online environment.
Loyalty programs might be seen as a specific type of transaction. In return for trusting your store and making a purchase, you reward your customers with an incentive that proves valuable to them in the long term. A discount for future purchases is the most popular type of such an incentive.
From a technical perspective, the software responsible for running a reward program just adds a specific value to your customers’ database based on set conditions.
Upon next purchases, the software checks if values assigned to a specific customer are sufficient for receiving a reward. When those requirements are met, the customer gains access to whatever benefits you have chosen for your program.
Benefits of eCommerce loyalty programs
eCommerce loyalty programs can offer great benefits to your store and your customers.
They can help you stay connected with your customers, gain customer insights and boost new and repeat orders. The term “loyalty program” means that the more a customer shops with you, the more program currency they acquire at no additional cost to them.
What’s the main benefit of a loyalty program? They provide a way for you to retain your customers and lower your average customer acquisition cost significantly. They make them feel appreciated for their repeat business and can be used in many different ways to increase conversions and profit.
Benefits of a loyalty program may include:
- significant increase in sales
- better customer retention and more repeat purchases
- opportunity to sell overstock products
- increased customer lifetime value (CLV)
- building relationships with customers
eCommerce loyalty program rewards
Loyalty programs are a great way to get customers back to your store time and time again.
But there’s also a catch.
To make your customers come back, they need to actually feel they are making progress within your program.
If gathering points needed to receive a discount will take too long, the chances are your loyalty program will be abandoned. They also need to perceive a potential reward as motivating enough to continue purchasing from you.
The best eCommerce loyalty programs will go beyond just the points system and also offer exclusive rewards and some other neat features for your customers. These rewards can sometimes make or break a loyalty program, so it’s important to have a good selection.
This brings us to the next important point:
What types of rewards can you offer for loyalty program members
The answer to this question should be based on your customers’ preferences and what is actually valuable to them. Some customers prefer regular discounts, while others might be better motivated by an opportunity to receive free gifts.
If you are not sure what kind of rewards will be attractive to your customers, do a little research among your competitors or dive into your sales reports to find out what kind of promotions drive the biggest sales in your store.
Example rewards from a loyalty program include:
- one-time discounts
- free products
- early access to new arrivals
- free delivery
- lifetime discounts (more suitable for B2B)
Types of loyalty programs for eCommerce
Loyalty programs, while they might not be the hot new craze in eCommerce anymore, are an increasingly important part of every online retailer’s marketing strategy. They’re a great way to retain customers while rewarding them for their patronage. Loyalty programs can take on a lot of shapes and forms – everything from standard discounts, mobile offers to coupon codes, gift cards, and more. Below you will find several examples of loyalty program types you can implement in your store.
Tiered loyalty programs
Tiered loyalty programs give your customers the ability to reach progressively higher levels, each with more prestige, better benefits, and more privileges. For example, many loyalty programs combine points programs with tiered programs, as Starbucks does. The Sephora Beauty Insider loyalty program can earn points for a variety of interactions, not only purchase transactions, for example, sharing product pages on social media, completing their profile, or subscribing to a newsletter. Point systems are easy to manage and quick to implement, perfect for companies who want to launch quickly.
Loyalty program in Sylius
One of the ways to introduce a loyalty program in a Sylius store is simply upgrading your instance to Sylius Plus.
With Sylius Plus, among other substantial benefits, you get access to an out-of-the-box loyalty program solution, which means you don’t have to spend time on developing it yourself.
According to an official Sylius post, the main features include:
- the ability for your customers to check their current points status
- advanced loyalty program rules configuration
- converting loyalty points into a coupon code or other benefits such as free shipping or free products
If you want to use the regular version of Sylius, you may use the Bonus Points Plugin – eCommerce loyalty and rewards plugin.
Key features of the rewards plugin:
- Extend your Sylius-based app with a simple bonus points loyalty program and reward customers.
- Let users reward points and apply special actions for them depending on their points score.
- Easily extend the rule set according to your business needs.
- One strategy can have multiple rules attached.
- The number of bonus points can be fixed per order or as a percentage of a product price.
Other option is to connect your Sylius-based instance to eCommerce loyalty platforms.
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Summary
Creating your own loyalty program in eCommerce businesses is no easy task, but hopefully, with this guide, it will be much easier for you to implement one and let your customers earn points. With loyalty programs, you will be able to increase your sales, get eCommerce customer loyalty, you will ensure customer satisfaction, and improve brand awareness (for example, your customers may tell their friends about your store).
If you have any questions about Sylius Plus or developing your own program on Sylius – feel free to contact us!