Importance of Loyalty Program for eCommerce Business

Importance of Loyalty Program for eCommerce Business

Modern Businesses seek innovative solutions to entice customers and strengthen their affinity with the customers. The advent of the internet and smartphones has created many challenges for businesses that like to steady their position in eCommerce activities. Customer loyalty programs and reward services are highly effective even in today’s on-demand marketplace.

Loyalty programs and customer reward services are not new to the business world. In 1929, Betty Crocker introduced a customer reward program which coined the modern customer loyalty program in today’s business sector. Modern eCommerce development services come with a customer loyalty program; this shows the impact of a loyalty program on retaining and building a strong customer base.

This article briefs the importance of having a good customer loyalty program for modern businesses.

Challenges of Ecommerce Business on Retaining Customers

Before getting into the core topic, let’s brush with some basic customer retaining challenges faced by modern businesses in the eCommerce industry.

  • Maintaining High Customer Engagement Rates: In the recent past, businesses involved in eCommerce activities are facing hard times to maintain a good relationship with their customers. This is mainly because of not having multiple touchpoints other than transaction-related. Having good customer reward or loyalty programs will encourage customers to engage more with brands.
  • Discounts & Offers Not Gaining Enough Attractions: The demands of modern buyers exceed the servicing levels of brands. Discounts & offers won’t work anymore to retain new-age customers. Instead, brands must create more innovative touchpoints for making customers interact with brands. Creating rewards and loyalty programs will make the customer feel the interaction moments with the brand or online shop as worthwhile.

Customer Loyalty Program in Ecommerce

A Loyalty program in the eCommerce sector is a convenient tool that helps brands/businesses retain and build their customer base. The eCommerce loyalty program provides a fun experience to customers and encourages them to engage with brands again and again.

An eCommerce loyalty program offers rewards to the consumers for making a purchase. The rewards may be in the form of freebies, discounts, points, or cashback. An Effective eCommerce loyalty program provides significant advantages to brands looking to stabilize their business in the virtual market.
Here are the lists of features the eCommerce loyalty program must have for driving more benefits to brands.

  • New Touchpoints for Customers
  • Unique Ecommerce Rewards
  • Deliver Memorable Customer Experience

These days’ reliable and reputable eCommerce website design services offer emotional customer rewards & loyalty programs along with development services. Utilizing such services would help eCommerce businesses to gain a competitive edge in the virtual market.

What Can Ecommerce Businesses Get Through The Customer Loyalty Program?

For eCommerce businesses, customer loyalty programs are their alternative growth channel and help brands in many aspects. Take a look over the perks offered by customer loyalty programs to eCommerce businesses.

1. Increases Customer Repurchase Rate

A good loyalty or reward program is the most successive marketing strategy a brand can have. The points, rewards, cashback, or discounts offered under the eCommerce loyalty programs will deliver versatile benefits to a brand/online shop.

Online shops can easily incentivize the customer to do profitable behaviors with such programs. In addition, it will encourage customers to repurchase and engage with brands regularly.

2. Decrease Acquisition Cost through Word of Mouth Marketing

Having a happy customer will always be beneficial to brands in many aspects. Running an effective loyalty program will make a customer happy and encourage them to engage with brands repeatedly. Also, happy customers will share their shopping experience with their close ones; this will create awareness and trust among the potential audience.

Modern buyers trust the word-of-mouth marketing from experienced buyers rather than believing attractive advertisements, which is exactly what the loyalty program does. As a result, brands can get more potential consumers without spending a lot on marketing campaigns.

3. Increases Customer-Brand Engagement

Rewarding a brand’s loyal customers will always build a strong customer relationship with brands. In addition to the customer loyalty and reward programs, brands can offer VIP membership programs to their VIP customers. By doing so, they can offer lifetime rewards to their VIP customers.

This will encourage customers to encourage and motivate customers to purchase more from the brand. Apart from just increasing your sales revenue and profits, this strategy will keep your VIP customers away from the brand’s competitors.

4. Increases Average Order Value (AOV)

For every eCommerce business, the ultimate goal would be to increase its sales ratio and profits. An increase in the average order value (AOV) will do this; however, a hike in AOV is not an easy thing to achieve. A proper strategy along with an insightful campaign is required.

Having an effective customer loyalty and reward program will be a successful partner of the brand or online shop in increasing AOV.

5. Improve Customer Experience

Finally, an efficient customer loyalty program will create brand awareness among the potential audience without spending a lot. Customer loyalty or reward programs are the most effective customer acquisition techniques for online stores. These programs will create more happiness among the buyers, leading to a positive shopping experience.

Once a customer starts experiencing a positive shopping experience, he/she will keep coming back to purchase more. Also, they will promote the brand and share their shopping experience with buddies. This will be a huge benefit to the brands in driving new customers.

How To Set Up An Efficient Customer Loyalty Program?

Many eCommerce businesses fail to create effective policies and programs to retain their customers. This section briefs how to develop/set up an efficient customer loyalty program and what best practices to follow for making the loyalty program more successful.

  • Choose Reliable Loyalty Rewards: Be wise in picking relevant loyalty programs so that customers will incentivize with brands. Also, once the brand or online shop is determined with the reward system, stick with it and offer discounts, exclusive offers, freebies, and other relevant tempting perks.
  • Make Use Of Reliable Reward Software: In general, stores involved in eCommerce activity can easily set up their custom-tailored loyalty program using the software. However, before engaging with such software, cross-check its reliability and the reputation of the makers. If you are not familiar with the software, then it’s better to leave it to eCommerce developers. For example, if an eCommerce store built in the Shopify platform means hire Shopify designers or developers to set up a custom loyalty program for your brand or online shop.
  • Personalized Loyalty Program: Brands can go ahead by introducing personalized loyalty programs based on the shopper’s behavioral activities. By doing so, shoppers would show interest in taking part in the loyalty program. Also, personalized loyalty programs will trigger emotions among the shoppers and force them to get involved.
  • Marketing Loyalty Program: No one knows about the loyalty program without proper marketing tactics. So brands should take initiatives to promote the presence of loyalty programs on emails, social media and by creating separate landing pages on the eCommerce store page.


Bottom Line

A customer loyalty program in the eCommerce industry does create an opportunity for brands or stores to retain their existing customers. As a result, ECommerce customer loyalty programs have now become one of the essential tools to keep customers engaged with the store or online shop.

However, proper planning, right implementation, and choosing the right loyalty program software determine the success rate of the customer loyalty program in the eCommerce industry.