Building customer loyalty for your eCommerce business is crucial. Let’s take this journey together to find out the importance of loyalty program in eCommerce development.
Customer retention is the life blood for any business. To survive in today’s competitive world, it’s not only necessary but also critical for brands and businesses alike.
Businesses prefer to retain customers because it is less expensive than onboarding new ones. Moreover, retained customers are vey much likely to come for repeat purchases which is always beneficial for the business.
Because of its effectiveness for eCommerce development businesses, loyalty programs have gained traction in recent years. This article will shed light on various innovative ways for planning loyalty programs along with offering insightful information.
eCommerce Loyalty Programs: What it is All About?
eCommerce Loyalty Programs are initiatives strategically developed by companies offering eCommerce management services.
Customer loyalty for today’s dynamic businesses is a tool to grow while encouraging repeat purchases from their existing clients. Talking about global market size, it is expected to grow around 24billion US dollars by 2029. Therefore, companies can make huge profits by investing in such programs.
The most important element of running loyalty programs successfully is to invest in rewards (for the clients) and acknowledge their participation in the business. when customers feel, they are being acknowledged by the brand, they (customers) would like to stay loyal to the services.
Customer retention owing to its lower expense as compared to gaining new clients is always a good deal for businesses. Not only it (gaining new clients) involves a lot of market expenditure but also takes time for the customer to build trust with the brand.
Retained customers, on the other hand, have remained accustomed to the business and their preferences have been stored and analyzed by the businesses over the year helping brands to entice customers for new purchases.
Additionally, there are a number of advantages for eCommerce maintenance business to invest into loyalty programs. These benefits are:
- Increased sales
- Cost-effective solution for the brand
- Customer satisfaction
- Retaining of existing customers
- Improved brand awareness
- Increase in new customers
For customers, who shop frequently from similar brands, the following initiatives have been listed.
- Referral Rewards: customers can get points for referring friends and acquaintance and redeem the points as discount coupons.
- Free shipping: brands most commonly arrange free shipping for clients who purchase a certain number of products.
- Early access to new products: this benefit can also be utilized by eCommerce website development companies by offering not only early access to services but also some discount on first serving.
- Point based rewards: brands can offer point-based rewards on the purchase of certain products.
- Birthday reward: on birthdays and special days customers can get certain discount points to redeem further in their next purchase.
- Exclusive discount: customers who remain loyal to brands for long periods can be offered exclusive discounts.
Loyalty programs are also impressive as they offer a differentiation to the brand. It helps customers acknowledge the fact that they are being cared and their preferences are being taken care of by the brand.
This differentiation helps customers to choose similar brand from a large variety of options available for them.
For brands, loyalty programs are a way to establish long-term goals, and positive relationships. Loyalty programs can play an effective role in satisfying customers’ need and get word of mouth advantage from their existing clients.
Satisfied customers who benefit from existing programs are much likely to recommend brand to others. And for brands, it is a key point for driving more and more sales to the business.
Why to Invest in Loyalty Programs?
eCommerce loyalty programs benefit business in so many ways. However, the most exclusive ones are:
- Easy customer retention
- Strong brand identity
- Higher profits
Let’s discuss these pointers in detail
Easier customer acquisition
Retaining clients is the most critical aspect for every business. In regards to businesses offering eCommerce development services in UK, they do need to retain their existing clients for being able to make the desired profits. This can be done by offering loyalty benefits as explained above. Discount offered through loyalty programs push customers to make the purchase in order to gain a superb deal.
Strong brand identity
Reward programs have been proved to bring reciprocity into the customer relationship. Customers get rewarded for buying from a brand. This action rewards their (customers’) loyalty towards the brand. Brands build loyalty in such a way that customers always consider the familiar brands to shop for products.
Higher Profits
Loyal customer buys more frequently and contribute to the profit making of any particular business. A 5% increase in the customer retention rate can increase profit by a minimum of 25%. However, attracting new customers is five times costlier than retaining the existing ones.
Types of eCommerce Loyalty Program
There are following four different types of loyalty programs that work the best for eCommerce companies.
Points Program
Airlines and hotels generally deal in such programs. Brands like Starbucks has made such programs much more popular. They reward customers with starts for reaching different tiers. As soon as they collect considerable points, they are rewarded with cash in opportunity for their points.
A new trend in points program is to reward customers points when they share on social media. This also includes completing their profiles or subscribing to newsletter.
Universal Loyalty Program
These are a new take on standard loyalty program. They include the perk of traditional loyalty programs such as free shipping, member-only discounts, and discounts applied to every order.
Amazon Prime had included this program in their two-day free shipping program with discount across purchases. Shoppers have shown great interest in getting perks from this program.
Paid Programs
Paid programs are those that customers have to pay for in order to get the membership. It generally includes paying a quarterly or yearly fee to gain the benefits.
Paid loyalty programs bring customers back to the brand effectively. Capitalizing on this emerging trend satisfies experience-driven customers.
Tiered Loyalty Programs
Tiered Loyalty Programs have better benefits and more privilege for customers. These programs are a combination of point programs and tiered programs. The best example of this type of program is Sephora beauty program.
The loyalty program is responsible for generating 80% sales of the company. The beauty giant offers free gifts and exclusive access to Sephora beauty insiders only (loyal customers).
Benefits of Loyalty Program for brands
Increased repurchase rate
The power of the points in versatile. Right from eCommerce development companies to agencies working in beauty and furnishings, the power of points can be utilized to increase repurchase rate for the brand.
Customers love getting freebies and discounts on the purchase they make. And therefore, offering them additional discount that can be redeemed in cash while making purchase is an exceptional option for the shoppers.
Distinguished Brand Image
Your brand identity is something that will keep getting customers for you if it is maintained well. Raising the standards for customer service and experience while they are browsing through the website is one of the most crucial aspect.
While offering loyalty program benefits as described above, brands can distinguish their identity from others competitors in the similar category. It is also important to ensure that your brand offers something that is not available with others.
Increased average order value
For every marketer, and companies offering eCommerce web development services, it is crucial to increase average order value. The loyalty programs have all the elements to help increase the average order value for companies offering services to the clients.
Based on customer purchase and browsing history, they can be offered discounts so that they can buy more and more and can contribute to add to the average order value.
In Conclusion
Customer loyalty program are great tool even for eCommerce development companies. There are impressive elements for companies of every size to help them grow their brand size and customer retention rate by applying the methods listed above. Loyalty programs do offer exclusive benefits to the brands.
