Best Loyalty and Reward Program for eCommerce

Loyalty? You can hardly get enough of it; it seems to be a rare commodity, especially in markets with a wide range of options. The competition is constantly expanding, despite the presence of a loyalty program. Each day, it becomes more ferocious. That is beyond a shadow of a doubt.

But do you want to entice your target customers to visit your shop again and again?

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One interesting strategy a retailer can use to successfully connect with their most devoted customers is to set up an alluring loyalty program.

Expanding your customer base superficially is equivalent to increasing your sales. A strong customer relationship management (CRM) strategy is just one of the things needed to achieve this goal.

Surprisingly, the cost of acquiring a new customer is 5 to 25 times higher than the cost of keeping an existing customer. The bottom line is, it’s way cheaper to keep a good rapport with your regular customers; just like the fortified bond, you could have for your pet.

You want visits that convert, for instance, while running an internet business. To put it another way, an online store wants customers to repeatedly click the checkout button.

And a comprehensive loyalty program would be sufficient to accomplish that succinctly. It effectively functions for both physical stores and online businesses in a rather incisive manner.

To sum it up, it’s more of a marketing strategy that works for practically all firms. One crucial decision a seller must make with great consideration is how to keep their clients interested all the time. A incentives scheme can help with that.

Another aspect is…

It assists a retailer in building their company to their full potential. Retaining your repeat consumers is one approach to achieve this. They are, first and foremost, a praiseworthy loyalty symbol. That could appear to be an excessive amount of homework at first.

But if you set up a top-notch loyalty program for your company, that is no longer the case. Giving out pleasant rewards kind of whips up the majority of your customers in a limitless amount. The marketing wish list of a retailer must include all the elements required to maximize client happiness.

This marketing strategy’s availability to those without physical stores is also a plus. In other words, this tactic completely succeeds even for online shops.

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This article highlights a few practical suggestions for enthusing your target audience about your loyalty program. You must accept the necessity of having a loyalty program prominently displayed for your brand.

Second, this guide generates a few samples that could aid in the launch of your loyalty program. Most importantly, a condensed formula that will allow you to assess the overall performance of your loyalty program.

So let’s begin…

What’s the Point of Having a Customer Loyalty Program?

It may take a lot of work to optimize the user experience, especially for someone new to the retail industry. If you don’t repeatedly put smiles on your consumers’ faces, they will stop coming back to your store.

Fortunately, an automatic loyalty program may be able to assist you in coping with worrisome sales declines.

There are numerous examples that support and show why a customer loyalty program is beneficial for any company aiming to increase predicted revenues. The key idea here is that returning consumers often spend more money on items than do first-time buyers. The number is 67 percent larger than the number of new clients, according to some infographics.

Fortunately, there is a lot to bet on when it comes to the prevalence of customer loyalty platforms.

The outcome?

The ultimate goal of a well-designed loyalty program is to support a company’s continued existence for many years to come. It makes sense to start by studying businesses who do it exceptionally well in order to automate this marketing concept in your enterprise.

The loyalty program offered by Amazon is a concrete example. The top online retailer has successfully launched its campaign by thanking and taking into account all of its clients.

Numerous firms who sell on Amazon use data-driven metrics as part of their extensive loyalty program to reward loyal customers who reach certain thresholds. If you have an American Express card, using your points for purchases is simple.

So let’s revisit the same area.

If you want to strengthen your relationship with your customers, you should consider creating a loyalty program. Only by doing that can your company prosper and expand.

By giving customers a personalized loyalty punch card, you may increase repeat business in a more hands-on way. Such originality will encourage clients to take use of the loyalty benefits more frequently.

The Subway Rewards Punch Card is a suitable illustration worth considering.

When a customer makes five trips to the city restaurant, Subway employs this option to provide them the opportunity to receive a free drink. The loyalty punch card at McDonald’s uses the same method.

How to Make your Loyalty Program Work Flawlessly?

Making it simple for customers to redeem their earned points is one unrestricted approach to cultivate their brand loyalty. The actual method involves little effort. But if it appears to be challenging to disentangle, you can leave it to the professionals.

However, things are really out of the ordinary in the B2B sector. Here, you’re essentially making a pitch—or, even better, a proposal—to a more established company that offers comparable goods or services.

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A business owner tries to directly address a certain audience using the B2C framework. The fact that needs to be understood in this scenario is how practical it is for customers to return and make a purchase repeatedly. This suggests that the loyalty program for clients must be completely user-friendly.

You must create distinctive incentives that are unmatched in order for that to happen. With the most unparalleled product value that is so alluring to your target buyers, you must crush your rivals.

And once you have them, the following immediate advice should be put to ideal use as you develop your company’s loyalty program:

Step 1: Choose a Loyalty System that’s Well Connected to your Business.

I don’t want to assume you know how to use every feature of the loyalty system, though. In light of this, let’s quickly explain each of them to put them into context. Here are a few popular loyalty models you might wish to consider:

Points-based system

Not much of a challenge here. No problem at all.

The most popular method among all other loyalty programs is the points-based one. Customers gain points after making a successful purchase with this option, which makes it unusual.

They can then utilize their accrued points to redeem them for rewards or to make purchases of goods and services. That is a tried-and-true strategy that can serve as motivation in a variety of contexts.

In other words, customers accrue more points as they spend more. Particularly for e-commerce enterprises, it is simple to set up such a system. In actuality, 73 percent of loyalty programs make use of this approach to draw in clients on a deeper level.

The point-based system is used by both DSW and North Face to reward their devoted customers. They have been rewarding loyal Prime subscribers with goodies for a time now.

This method is closely related to referral marketing.

Here, a repeat client receives the stipulated benefits whenever they recommend a new customer to your brick and mortar store. However, you don’t have to design it as a wholly transaction-based rewards scheme.

Your devoted clients can now earn points by just posting your products on social media platforms like Facebook or Instagram, thanks to social selling’s growing influence. You may be able to produce sales that are in line with your prospects as long as there is a ton of internet traffic flowing in your direction.

You can provide your loyal clients freebies or discounts on future purchases in a sequential manner for each recommendation they make. In essence, the point-based system may be used to fine-tune consumer shopping patterns and address any sales bottlenecks.

Tiered loyalty system       

The name alone gives a general notion of what it represents figuratively. The tangible value a customer receives is grouped together.

In other words, a consumer receives a reward after spending a specified amount of money. Different rewards come with different tiers, which naturally motivates buyers to buy more.

Online retailer Best Buy employs a tiered loyalty program to offer customers who sign up for it special deals.

The system is tier-based in that each level has unique benefits.

Since you don’t need to invest as much money in rewarding clients who buy your items seldom, a tiered loyalty program is a low-cost solution. The gamification strategy boosts your sales by enticing your consumers to attain the highest-paying tiers.

Despite how sensible it may seem, the tiered loyalty program has a negative side as well. The main holdup is that it’s a little challenging, especially for beginners.

Paid loyalty program

More specifically, I believe you may have encountered this choice while making an online purchase.

This loyalty program mostly operates on a membership basis. Here’s a quick rundown of how it functions:

At predetermined times, the registered members must pay a specified charge. It could occur every month, every three months, or even every year. As a result, they frequently benefit from exclusive deals, services, and savings.

Amazon Prime has held the throne with its successful subscription service for a very long time. Its premium loyalty program has a considerably greater understanding of client needs than most of its rivals.

A retail setting can mimic its model to keep up with the loyalty program industry’s constantly evolving trends.

There is no doubt that your company ends up reducing the customer base of your competitors if your system is more oriented to the expectations that the existing demographics of potential consumers imply.

The compensated loyalty program, on the other hand, is susceptible to some level of suspicion from some customers. If your marketing plan is out of balance, your prospects could suffer.

In other words, you need to include the proper qualities that demonstrate the idea or product’s considerable worth to your target market. You want to keep a clientele that consistently makes all of their scheduled recurring payments.

Therefore, having a paid program that is active is insufficient to convince your clients not to consider the alternative. After all, a perceptive survey reveals that roughly 77 percent of consumers typically lose interest in a paid loyalty membership far sooner than expected. The typical explanation is that they don’t understand the importance of the incentives that a certain program includes.

In conclusion, merchants must rethink their processes and expand the benefit that customers expect when they sign up. The incentive program must be sufficiently generous.

Partnership loyalty program

Two minds can think alike. That’s what they say, isn’t it?

Generally speaking, a partnership loyalty program is a good choice that may help you build up and superbly manage an established client retention plan.

The ultimate goal of integration into a loyalty program is to produce optimized results.

Consider it like this:

You control a brand that is intimately associated with a specific clientele. How else could you make future purchases more efficient?

You must collaborate with a few well-known brand ambassadors, is the short answer. This makes it much simpler to connect with your target market, example, through social media sites. Other times, major corporations mutually decide to combine forces in order to reward loyal clients.

The collaboration between Apple and Nike is such a fantastic example from real life. Together, the two worked to improve runners’ experiences. The Apple watch series 5, Nike edition is a design that, as far as partnership loyalty programs are concerned, appears to operate flawlessly.

Uber and Spotify used to seem to work along so perfectly. The key lesson from this is that brand owners must define pace-setting objectives that are grounded in reality.

Making client pleasure a high priority is the most crucial component of integration. With that in hand, selecting the partners who will work best with your reward program is really simple.

Step 2: Develop an Omnichannel System for your Target Audience

Sadly, it’s a pretty big warning sign if the majority of new consumers who sign up for your reward program choose to leave immediately and without being coerced. The plain truth is that you don’t have to wait until things are really bad to act wisely.

But how can such a disgusting result be reversed? You can be quite confused.

So pay close attention.

The quickest solution in this case would be to upgrade the user experience. You must develop a customer-friendly cross-channel platform in order to accomplish that flawlessly. Your content marketing plan needs to be at the top of its game, as an example.

The pharmacy chain Walgreens, which has multiple franchises in the area, has an exceptional loyalty program that is second to none.

In addition to the consistently large discounts, the loyalty program enables users to use their points at any of their locations to purchase featured goods and prescriptions. Customers can rely on a few potential options.

You can register for rewards at Walgreens using an app on an iOS or Android device, or you can visit any of their physical shops and ask questions at the checkout counter.

Customers have the option of signing via the official website instead of the two previously mentioned options.

There is no doubt that Walgreens has a basic multichannel system for their devoted clients to use with over 87 million active members. Not to mention the readily available benefits that users can get once they accumulate significant “Balance rewards points.” Walgreens offers access to coupons and gives money back on purchases, just like other active loyalty programs.

You must create a user interface that maintains things, perhaps, very succinct and responsive in order to maximize the consumer experience. Users are able to subscribe effectively and without any problems as a result.

Things are significantly simpler for online retailers. Online sales platforms like Shopify and WooCommerce integrate seamlessly with a number of renowned loyalty and referral program software.

An tool like ReferralCandy is specifically designed to track down your referral money.

Huge corporations like Reebok, Magneto, Volusion, and Yahoo have confidence in Candy’s method.

This implies that it’s a dependable option for people who want to increase the market domination of their business.

Step 3: Charge a Fee for Premium Services

I’m aware that this will make you wonder how the hell I charge for customer involvement.

If there are any VIP benefits above and beyond the predetermined incentive structure, the roles must be reversed. It’s the only way to pay the expenses incurred while trying to position your business on the escalator’s right side.

Even though the majority of VIP-focused loyalty programs have an annual subscription, members can go around it to access unique deals and tremendously amazing prizes.

Both Netflix and Amazon Prime market their services by providing a 30-day free trial period for new customers. Such a creative idea significantly lowers cart abandonment problems for online service merchants and account members.

For the majority of e-commerce setups, this model has an enormous performance potential, but the reality is that the benefits must encourage recurring business from VIP clients. However, if the merchant doesn’t partner with the legitimate recurring payment processors, achieving that goal won’t be simple.

Step 4: Build a Captivating Gamification Model

Everyone desires success.

However, you shouldn’t view your company’s loyalty program as a way to make money. Instead, you should be moderately generous while keeping in mind your clients’ needs.

This is a sobering place to start for business owners who wish to increase the proportion of return clients. A dynamic and entertaining game should be used as the main method of engaging the target audience in a loyalty program.

The depiction of the brands and their overall goals must be reflected in the game itself. The motivating reason must maintain captivating interest and have attainable requirements.

If not, consumers will consider it to be just another recurrent expense with no genuine benefit. You run the danger of eventually having a ton of your subscriptions terminated.

High-yields and a wider awakening of the brand’s image are not unfamiliar results of being a little generous and adopting a definite gamification methodology.

Step 5: Calculate the Value of Your Loyalty Program

Practically speaking, gauging the effectiveness of your program is often helpful.

If your loyalty program doesn’t have a tracking formula, you need completely revamp it.

The goal is to gauge how content, important, and receptive your clients are. Analytical tools can be used to evaluate the pertinent metrics. The client retention rate is a crucial indicator to take into account.

It’s important to track the retention rate in addition to your company’s conversion rate, leads generated, cost per acquisition (CPA), and other metrics.

The length of time a customer stays with a business is calculated in percentage terms here. You must gather the following information in order to calculate a precise number:

  • The total clientele at the end of a predetermined time period;
  • Lastly; Number of repeat consumers during the duration of the current period;
  • The total number of clients at the start of the same time frame.

The major goal is to increase the percentage of repeat consumers at the conclusion of the time period. As a result, we must subtract the number of new clients (NC). Once the filtering choices are under control, you may calculate X by subtracting the number of current consumers (CC) from that of the closing period (CP).

We must divide this number (X) by the entire number of clients in the beginning in order to arrive at a percentage, and then multiply the result by 100.

Excellent Customer Loyalty Programs: Examples

The North Face

The North Face’s “VIPeak” loyalty program is clearly stated.

Customers find the registration process to be rather simple. By making purchases or participating in any of the North Face’s activities, you can accrue points. The program’s simple-to-understand income and spending guidelines are one of its great features.

North Face appears to be very careful not to burden their loyal customers with onerous rules.

Let me explain the formula for rewards:

Therefore, you receive 8 points for every $1 you spend at its official website ( or any of its retail locations. The VIPeak rewards program is focused on tiers. It has three separate stages, to put it briefly;

When a member reaches 2000–3499 peak points at the Basecamp level, they are eligible to receive a $20 award.

In contrast, the Halfdome level (level 2) rewards users who reach between 3500 and 4999 points a $25 incentive. The Summit level’s premium package, which offers a $30 reward, is the last option. One must first gain 5000 points or more in order to proceed.

Starbucks Rewards

Another real-world case study that must be included is this one.

The coffee shop company offers a cutting-edge loyalty program that adapts to the needs of its patrons. Customers can make purchases using the Starbucks app or a registered gift card. The online Starbucks page also allows users to set up an account.

Customers can still enter Star codes and receive points—referred to here as “stars”—on the same online platform.

The customer receives two stars for every $1 spent. More than ever, the app actively court loyal users. However, Starbucks employs the gamification technique to provide bonus stars.

It’s simple to understand the terms of usage. You should be aware that you must purchase with a registered Starbucks card in order to receive stars. Customers can therefore use that account to redeem their earned rewards at any of the participating stores.

Kohl’s (yes2you rewards program)

Every point counts at Kohl’s. So let’s leave no stone unturned to obtain a simple peek of how it works….

For every $1 spent at Kohl’s, registered customers can receive one point. The online retail store keeps its word on the first of every month. The catch is that earning a $5 reward requires 100 points.

Guys, that’s not everything!

There are still other details.

Members have access to exclusive bonus point events and receive birthday gifts. The latter enables devoted clients to accrue rewards much more quickly than the basic programs you’re accustomed to.

You have a choice between signing up on Kohl’s official website or the Kohl’s app to create a shopping account. The software is available on Google Play and the Apple App Store. It appears that Kohl’s reward program has plenty of resources to provide its users with a responsive and mobile-friendly experience.

This undoubtedly helps to increase the average amount spent by customers. Most importantly, the Yes2You program has an unrivaled level of precision. A customer receives a Rewards ID number that contains all the necessary data.

Still, as an incentive, consumers who sign up for their email sales notifications receive a 15% discount off their subsequent purchase. When there are significant bargains, clearance events, promo codes, or free shipping deals, Kohl’s promptly rolls out notifications.

Amazon Prime Loyalty Program

This is most likely a successful program that is dominating the internet retail space with ease.

Even with nearly 100 million subscribers, Amazon Prime still has a gleaming exterior. Everyone enjoys a good deal. While we’re at it, we frequently search for one that won’t break the bank.

Amazon, however, tends to disagree with this factuality. For around $100, customers must pay to join the program. Technically, a figure like that is way off. Despite the aforementioned truth, Amazon appears to excel at emotional loyalty.

Amazon doesn’t use any of the most obvious loyalty structures, not even accounting for the tyranny of numbers it possesses. Therefore, there are no points available for joyriding. Instead, by producing unquestionable value in all of their goods and services, Prime substantially conserves the general customer behavior.

Amazon Prime offers free two-day shipping on all orders, movie streaming in real time, and a huge selection of books.

The program delivers all orders the same day even without a rewards system. In that circumstance, Prime is more likely to continually outperform its rivals while still upholding the emotional loyalty spirit.

Final Thoughts on An Introduction to Customer Loyalty Programs

Is a loyalty program appropriate for my company?

Well, judging on the enormous revenue-generating setups shown above, it appears to be working out.

What then is your defense?

It’s fair to assume that a loyalty program primarily strengthens your company’s strategy for client retention. Only by increasing the effectiveness of your program will you be able to retain your highly valued clientele.

Therefore, if you’re considering starting your company soon, this manual may serve as a 101 blueprint to help you remember the essential principles.