Ecommerce loyalty program

What is Ecommerce loyalty program

The loyalty program is an effective tool for retaining customers, a system of rewards for re-engagement with the brand and making repeat purchases.

Loyalty programs appeared in the 1950s in the United States. Groceries offered coupons to shoppers for their purchases. Later, the idea was picked up by airlines, accruing bonus miles.

With the advent of the Internet, programs have become part of e-commerce. During the pandemic, online shopping has skyrocketed. E-commerce sales are forecasted to reach $6.3 billion by 2024.

In order to take a stand against the e-commerce giants, not only a quality product and a good price are important, but also a convenient buying process, as well as touch points that help the buyer deal with the seller more often.

Benefits of Ecommerce loyalty program


The loyalty program involves a brand refusing part of the profits from the product sale or service in exchange for consumer trust. It is beneficial to clients. By participating in it they receive:
● discounts on subsequent purchases by participating in the discount program;
● the possibility of accumulating funds for subsequent purchases using bonuses, cash-back programs, etc.;
● status - membership in a privileged club, access to the product pre-sales, presentations and private parties;
● a feeling of excitement from participating in brand promotions that involve winning valuable prizes, travel packages, etc.
● a sense of self-regard on the part of the brand, if the latter wishes you a happy birthday, offers special discounts, gifts or other bonuses; comfort and time saving if, as part of the loyalty program, the company offers a personal manager who will serve the client.

Types of Ecommerce reward programs



Point-based

The point-based (bonus) system is one of the oldest ways to retain customers. It is implemented in several stages:
● the company offers registration channels to consumers;
● it motivates those who have registered to take certain actions (participating in a survey, buying a certain product, referring a friend) in exchange for a reward;
● the client collects points to achieve certain goals (to collect a certain number of points);
● having reached the goal, the program participant exchanges them for the desired reward (discount, prize, etc.).

The point-based program has its advantages:
● it is simple and understandable for users;
● it encourages customers and employees to interact with the brand;
● it allows you to collect a database of consumers.

The main disadvantage of the program is its wide distribution. Constant management is required to reduce user fatiguability from the program.

Tiered programs


The tiered program is a system of benefits and discounts that is linked to the level of the client's expenses. The more the consumer spends, the more bonuses and privileges he receives. Tiers represent status within a brand. In order not to lose it, the client must regularly perform certain actions. This is how the company achieves lifetime customer loyalty.

The main advantages of the program:

● it captivates the consumer with the game, offering to make efforts to achieve a certain status;
● it offers unique bonuses that depend on the status acquired in the program.

The disadvantages of the program:

● it requires special automation software;;
● its implementation requires resources.

Perk programs


The discount program offers the buyer to join a private club, receiving benefits from cooperation with the brand:

● ibe the first to know about a new product, promotion;;
● receive special discounts;;
● accumulate an increased number of bonuses for purchases on certain days.;

The program attracts customers with transparent conditions, but minimizes the emotional experience of communicating with the brand.

Hybrid programs


These are programs that are most often used in e-commerce. They combine the advantages of point-based, perk and tiered programs with elements of gamification.

Program disadvantages:

● technically complicated implementation;;
● confusing participation rules can frighten the consumers.

Subscription-based


This is one of the most effective and promising e-commerce tools: offering products or services to customers on a recurrent subscription basis. The client pays in advance for the offer of the company, which receives a regular income and the possibility of additional sales. The probability of customers moving to competitors is small.

How to Implement a Customer Loyalty Program in E-commerce


To implement the program, you must:

● determine the purpose and type of program that best suits the needs of the brand;
● choose the type of reward that best suits the interests of the audience;
● develop a system for accruing remuneration;
● choose a platform for the program implementation;
● create criteria for evaluating the effectiveness of implementation;
● test the program by offering users a beta version;
● develop a program promotion plan.

After completing the preliminary preparation, you can launch the program.

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