Benefits of including a loyalty program in your eCommerce strategy

Benefits of including a loyalty program in your eCommerce strategy

loyalty-program Who doesn't like to be rewarded? Isn't it true that when you can accumulate store discounts, it creates a special relationship with that brand?

Whenever companies offer points, gifts, or advantages of any kind to their customers, they are actually applying loyalty techniques . You can do the same with your online store, and it's a lot easier than you think. A fundamental part of customer retention is making sure your shoppers are happy every time they make a purchase.

Creating a loyalty program for your online store can help you increase conversions and profits . Learn more about the advantages of implementing a customer loyalty program for your eCommerce.

What is a loyalty program?

Loyalty is a strategy focused on encouraging customers who have bought from your company to buy from you again. It is about converting first-time customers into repeat customers. To do this, you can create a reward system that incentivizes a second and third purchase.

People act according to the conditions around us. If a place or person gives us a positive feeling, trust is generated. And we return to buy again and again. However, customer loyalty is not achieved by chance. Online stores can implement programs that help reward their customers , and therefore, create a predisposition in their minds to buy again.

Different types of customer retention programs

There are different types of customer retention or loyalty programs. The prizes or rewards awarded to a customer must always be given in exchange for an action on their part: making a purchase, subscribing to the newsletter, recommending you to their friends, or being shared on social networks.

There are several loyalty systems. Let's take a look at some of them.

  1. Referral-based programs

Customers can get a discount if they send an email to 10 friends recommending your products. They can also share a photo of the product they have purchased and a recommendation on their social networks. This encourages them to return to make a second purchase while promoting your store among their circle of friends and followers.

  1. Point based programs

These are loyalty programs based on points. Users earn points each time they make a purchase. When they reach a certain level of points, they get a discount. In this way, the online store rewards its most frequent shoppers. And at the same time, it encourages other customers to buy more frequently.

  1. Birthday and holiday programs

Imagine that you receive an email from an online store with a €15 discount voucher for your birthday. This type of discount does not involve a great effort for the eCommerce shop, since it is only once a year. However, it can be used to win back old customers who have not shopped for a long time.

Being remembered on a special date can stimulate engagement with that store. Tools like Klaviyo allow you to create automated email flows to send to customers on their birthdays.

Birthday and holiday-based customer loyalty doesn't have to be limited to birthdays. You can also send an automated email for Thanksgiving, Halloween, Christmas, and other holidays throughout the year.

Benefits of including a customer loyalty program in your online store

Building customer loyalty is not an easy task. We start from the premise that not all customers are the same: some are distrustful and take longer to make their purchase decision, and others want to compare between different stores... There are many possibilities for a customer to slip through your fingers.

In fact, a characteristic of the millennial generation is precisely their great exposure to multiple stimuli and offers. The Internet has generated such a highly competitive environment that generating "engagement" is not as easy as it is used to be and the rate of customer loss can be high.

That is why you should avoid giving them the opportunity to evaluate other options. A loyalty program is an irresistible system for your customers to feel the "WOW" effect and they might feel so overwhelmed by your offer that they won't even consider going to the competition, as they would lose the "reward" or "prize" .

These are some of the benefits of loyalty programs:

1. Increase the customer lifecycle

Customers come, stay with you for a while and then leave. It is an inevitable process, and the reasons may vary, perhaps because they no longer need the product or because their financial situation has worsened. There are many factors that you cannot control, but you can influence the customer to stay as long as possible. Loyalty programs are designed to do just that: to extend the customer's life cycle.

2. Create brand ambassadors

Rewards generate commitment, trust... and also addiction. When you give a person reasons and incentives to buy your products, they can become an ambassador for your brand. This is someone who not only buys your products but recommends you to their friends. Or better yet, they recommend you on their social networks, their YouTube channel, or in their daily life.

This is someone who has not only become a recurring customer but also helps you make passive sales through word-of-mouth marketing.

3. Increase your profits

Customers are not free. It takes time and effort to find them and get them. You have made an investment in marketing to bring them to your online store for the first time and make their first purchase. Are you going to waste all that effort by doing nothing to try to convert them into repeat customers?

One of the advantages of loyalty programs is being able to earn more revenue per customer than you would if they were one-time shoppers. Or if they were occasional shoppers and didn't shop at your store often. Loyalty programs encourage buying and therefore help you increase revenue.

At Webmefy we hope you now know more about the benefits of implementing a loyalty program in your store. Do you want us to help you implement a customer retention system in your eCommerce? Do not hesitate to contact us.