How to Start an Ecommerce Customer Loyalty Program
Customer loyalty is the key to customer retention, meaning repeat customers for your business. The fundamental goal for an eCommerce shop is to attract customers, and ultimately keep them coming. This is certainly true for members of the popular forum, eCommerceFuel, who come together in one of the world’s largest eCommerce communities to share their knowledge and experience with each other.
With the competition being so stiff in the online marketplace, you need to ensure the loyalty of the customers you have.
How do you get the edge though? What will keep clients coming back time and again to your store?
Adapted from a traditional shop model, an eCommerce customer loyalty program is essential for customer retention.
Let’s take a look at what it is and how to implement a customer loyalty program for your eCommerce store.
What is a Customer Loyalty Program?
A study by Experian Data Quality shows that 75% of US companies have seen a return on their investment from customer loyalty programs. Well-executed loyalty programs are proven to provide value and useful customer data.
Even more telling, 63% of companies use customer retention to track success. The number of new sign-ups is also an indication of a loyalty program’s impact.
Customer loyalty programs were used in the 1800s when customers earned copper tokens. These could then be redeemed for later purchases.
The concept of a rewards program followed, which thanked buyers for repeat business. It was quickly adopted by businesses across the world.
The practice has now spread to the world of eCommerce. Is your eCommerce business ready to join the future of rewards programs?
What is the Importance of Customer Rewards Programs?
Studies have shown that new customers don’t always equal increased sales.
Consumers like to feel valued. Customer loyalty programs go beyond marketing and recognize the role of the customer. Simply put, loyalty programs show you care.
Customers who feel unvalued leave businesses and increase the churn rate (the rate of clients who decide to take their business elsewhere). An increased churn rate will drive up the cost of acquiring each customer and reduce your profit margin.
How Can Customer Loyalty Programs Impact Your Bottom Line?
According to Bain & Company and HBS, a loyalty program increases retention rates by 5% and increases profits by 25% to 95%.
Costs are higher at the beginning of the relationship and usually level off as profits from each loyal client increase.
Read more here.
Ecommerce Loyalty Programs: 25 Strategies Backed by 36 Examples and Over 100 Results & Stats (Shopify)