How to Increase Customer Loyalty is the hot topics for eCommerce store. To run any eCommerce store successfully customers are essential. Loyal customers will not only help you grow your eCommerce business but also keep profits high. The customers who are returning back to your store, they already know and trust your business.
According to business.com, Returning Customers Spend 67% More Than New Customers.
For successful running of any eCommerce store, you should know the types of customers. There are two types of customer:
Recurring Customer and Loyal Customer.
Recurring customers are those who chooses your online store over the competition.
Loyal customers are those who likes your brand so much and recommend to others.
If you’re already running an eCommerce store or are thinking to create one, there are some basic things to implement that can help your business grow. The same goes for those of you who just had a holiday season and want to focus on retaining strategies to make customers come back again.
In this article, we’ll discuss how to increase customer loyalty for eCommerce store.
Before we move, let’s see the below infographic, to get the customer loyalty program ideas.
What Is A Customer Loyalty Program?
A Customer Loyalty Program is a marketing tool used by any businesses to motivate repeat customers by offering some type of reward system. It encourage shoppers to return to online stores where they frequently make purchases. Some of the inducement may include advanced access to new products, additional discounts or sometimes free merchandise. Customers typically register with their personal information to ant store and are given a unique identifier, such as a numerical ID or membership card, and use that identifier when making a purchase.
Types and Examples of Customer Loyalty Programs
Customer Loyalty Programs may take a lot of different forms. Here are the types of loyalty programs.
1. Point Program
Point program is the most common program around the eCommerce world as it is the most simplest one. It is based on the principle: Spend more to get more.
Every time a customer makes a purchase on your store, they get a certain amount of points depending on the size and volume of their purchase. These points are converted into some type of reward. Whether it is a discount or a special customer treatment, customers seems to work toward collecting a certain amount of points to recover their reward.
Example of Customer Loyalty Program: Point Program.
If you look at the above screenshot, you might have noticed that the Nine West makes their point system very clear. $1 = 1 point. It can’t be as simple as that. They give surprises to customers on their birthdays.
2. Spend Program
In this loyalty program, customer get loyalty credits for the amount they spend at a eCommerce business. This program is very simple and easy to understand, create and maintain. It is also proven to be an effective way to increase the transaction amounts and reduce churn rate.
Example of Customer Loyalty Program: Spend Program.
Shop.com’s Cashback or spend program is introduced beautifully with an opt-in popup that illustrates the programs benefit to the visitor and maximizes conversions.
3. Tiered Program
One way to find the right balance between attainable and desirable rewards is to implement a tiered program, which rewards initial loyalty and encourages customer for more purchases.
In a short, the tier program is based on the levels of loyalty. Customers get points whenever they make any purchase. The more points they earn, the higher loyalty level they will reach. And the higher the loyalty level, the more rewards they will get.
Example of Customer Loyalty Program: Tiered Program.
Sephora clearly illustrates the benefits of each tier in a fun and easy way to understand. Scroll down the page for each tier, and you will get beautifully illustrated reasons to signup – the most attractive level is, obviously, the VIB Rouge.
4. Paid Program
Customers pay a monthly or annual subscription fee to join VIP member club with access to special services, discounts or unique opportunities. Your paid program should include benefits that are exclusive to VIP members or other wise it will lose its value.
Example of Customer Loyalty Program: Paid Program.
Amazon Prime offers a 30-day free trial for its new members. They’ve also found creative ways to market the program as part of the checkout process, on pop-ups, and even incorporating “try prime” into the Amazon logo on every page.
Newegg has copied Amazon’s placement techniques for program enrollment, but they’ve mastered the visual approach to benefits with an attractive, flat design and intuitive images.
5. Value – based Program
If you structure a loyalty program that is aligned to your customers’ values, they are more likely to become your brand ambassadors.
First, it is important to define your values. Let’s imagine that you are running an online book store and you know that your audience values book welfare. One thing you may do it, is to start a loyalty program, similar to the point system, where customers’ purchases convert into currency. Then, every time a customer makes a 50€ purchase, you would donate 5€ to a library.
The reward while choosing the value-based program is to connect with customers on a deeper level by creating a strong and ethical relationship with them.
6. Partnered Program
Strategic partnership for customer loyalty can be super effective regarding customer retention, as you offer them some more opportunities. At the same time, it can help the growth of your eCommerce business by building a new business relationships.
While providing your customers with the value that is relevant to them and goes beyond what your company can exclusively offer them, you are showing them that you truly understand and care about their requirements.
7. Game Program
Everybody loves games.
A good idea is to turn your customer loyalty program into a game application to encourage repeat purchases, increase customer loyalty, entertain customers and help strengthen your brand’s image in a more entertainment way.
8. Hybrid Loyalty Programs
As it sounds, a hybrid loyalty program is a combination of more than one type of loyalty programs. You may merge 2 or more different programs such as the paid and the game program, where customers reach new levels of loyalty every time they complete a new level in your game. The participation in the game should of course demand a purchase.
The most common combination is that of point-based program with a tier program as it makes the calculation of points easy for the customers and encourages them to pursue next loyalty level and thus, more purchases.
How a Loyalty Program Works
Loyalty programs provide two key functions: They reward customers for brand loyalty, and provide the issuing store with a wealth of consumer information. While stores can evaluate anonymous purchases, the use of a loyalty program offers additional details on the type of products that may be purchased together, and whether certain coupons are more effective than others.
Loyalty programs can provide important spending data from a brand’s potential customers.
When rewards programs are integrated into the customer’s daily routine, it can cultivate true brand loyalty. In many ways, stores are doing this by eliminating punch cards for unique mobile experiences that connect a customer to the brand’s product or service. Once a customer becomes comfortable with the app, they begin to trust the store will deliver a consistent experience at each time. At this point, customers will stick to a hotel, restaurant, airline, book, etc., because of points more than anything else.
How to Increase Customer Loyalty
Here are the common and most effective ways of how to improve customer loyalty and satisfaction.
1. Fast & Easy Multi-channel Transactions
The very first way to increase customer loyalty is – make it very easy for customers to order their product through mobile, online or in-store.
Use a chatbot or a sales representative to immediately answer customer inquiries. Create an app that lets customers repurchase the products that they regularly buy.
For example, Domino’s loyalty program implements multi-channel transaction plan. Here, customers can make their orders through the app, phone calls, takeout, tweets, Amazon Echo or Google Assistant — and earn loyalty program rewards too.
A lot of customers desire pizza out-of-the-blue. Their multi-channel eCommerce loyalty program enables customers to make a quick and easy order regardless of the other channel that is available to them.
2. Offer a Discount or Promo Code
Discounts or promo codes may lead to an unsustainable race to the bottom but you can use it to increase customer loyalty.
If customers bought a product, encourage them to make another purchase through a 15% discount or coupon code. This will motivate them to male a repeat purchases and establish long term business relationship.
According to globenewswire, a discount that’s more than 20% leads to a 54% chance for a second purchase. It’s a reasonable investment for customer loyalty program and continuous purchases.
For instance, Etsy thanks to their customers for their purchase and offers customers $2 off to encourage another transaction.
This small gesture helps to build the relationships and encourages its customers to return to the store soon.
Similar to Etsy, you don’t have to give a big discount all time. Experiment with smaller offerings like a $15 off or a 10% off discounts and see the results.
3. Implement a loyalty program
Different website loyalty programs reward current customers for their purchases and they’re very effective too.
According to a study, 79% of customers look for loyalty or rewards programs and 74% choose a store based on a strong loyalty or rewards program.
A loyalty program not only boosts your profit, but it’s also more cost-efficient than customer acquisition.
The most popular loyalty programs among the types of loyalty programs have a tiered rewards structure.
4. Place Customer Reviews in Your eCommerce Stores
A good product page can make customers interested—but customer reviews on product seal the deal.
Shoppers rely on reviews and ratings from past customers since the product isn’t available in a physical store. The comments from those who have experience with the brand are the basis for their purchase decision.
According to a study, 87% of consumers place as much trust in a product reviews as they would of word-of-mouth recommendations. A study by
Power Reviews also discovered that more than 86 percent of consumers find that reviews are essential to purchase decisions, and 56 percent of shoppers specifically seek out products with reviews.
For instance, eCommerce giant Amazon has become widely successful because their product pages have hundreds of customer reviews and star ratings. Consumers can rate and arrange reviews based on the “most recent or the “most helpful”.
5. Reward Customers for Referrals
Customers love to talk and share about your brand, especially if they have positive experiences while using it. So you can imagine how many referrals you can get when customers are rewarded for it!
Referrals are one of the best ways to get more customers.
According to a research, 49% of U.S. consumers say friends and family are their top sources of brand awareness. Meanwhile, 65% of social media users learn about brands, products and services through social networks and 70% of users hear about their friends’ and colleagues’.
Word-of-mouth recommendations are common because people love to spread the word about a brand or product they like. Consumers also trust the recommendations of users within their same network, as compared to sponsored ads.
6. Web Push Notifications
Web push notifications let online marketers send timely and relevant updates about product promotions, offers, updates and discounts. Since a lot of your customers are not staying or visiting your store all the time and could be on-the-go, they have become of the most promising channels for customer engagement.
Multiple studies found that web push notifications can boost customer engagement rate as much as a notification would for a mobile app which is almost 88%. Like other marketing channels, your web push notifications campaigns need to be well strategics too.
You can use web push notifications to recover abandoned carts, promote new products, notify customers of ongoing sales, promote your loyalty program or even send them a little nudge when they haven’t been to your store for a long time. Some brands use web push notifications to deliver special offers, location-based promotions, weather based targeting and reminders to their inactive users.
Time to put these customer loyalty program ideas into action
Hope those above tips can help you take your first steps to turn a first-time customer into a loyal customer. The most important advice to take from all, the customer trust you gain along the way will help your eCommerce business successfully grow.
The more customers trust, appreciate, and love what you do, the bigger the chance for your brand to stand out from the crowd.
Don’t be mistaken, retaining existing customers takes time, energy and resources that finding a new one. But once you set your priorities, you have a good chance to win customer attention, increase loyalty and, more importantly, boost sales.
