In today’s highly competitive ecommerce landscape, attracting new customers is only half the battle. Retaining those customers and encouraging repeat purchases is equally important for the long-term success of any online business, which is where ecommerce customer loyalty programs come into the picture.
A well-designed loyalty program can incentivize customers to come back and make repeat purchases, while also building a sense of loyalty and emotional connection with the brand. Whether you’re a small startup or a large online retailer, a customer loyalty program can be a powerful tool for increasing customer retention, improving the customer experience and driving revenue growth.
Why Implement a Customer Loyalty Program?
Let’s start with the basics: A customer loyalty program is a marketing strategy designed to encourage repeat purchases and customer engagement by offering rewards, perks, and other incentives to loyal customers. These programs can take various forms, such as point-based systems, tiered membership programs, referral programs, and exclusive access to special events or promotions.
But beyond what’s in it for customers, what’s in it for you, an online retailer?
- Repeat purchases: By offering rewards or discounts to loyal customers, a loyalty program can incentivize customers to come back and make repeat purchases.
- Increased retention: Loyalty programs can help build a sense of loyalty and emotional connection with customers, which can reduce customer churn.
- New customers: A well-designed loyalty program can also attract new customers who are interested in the perks and benefits of the program.
- Customer data collection: Loyalty programs can provide valuable data and insights into customer behavior and preferences, which can inform marketing strategies and catalog additions.
- Improved customer experience: By offering personalized rewards and exclusive perks, loyalty programs can improve the overall customer experience and make customers feel appreciated and valued.
Overall, a solid customer loyalty program can be a powerful tool for online retailers to improve customer retention, increase revenue, and build a loyal customer base.
Essential Ecommerce Customer Loyalty Statistics for 2023
When it comes to the effectiveness of ecommerce customer loyalty programs, the proof is in the pudding. Take a look at these statistics for a quick snapshot of the story:
- Consumers are 27% more likely to return to your online store after making their first purchase and 43% more likely to come back again after their second.
- 82% of consumers prefer to buy from brands they trust, even over more popular or trendy brands.
- Three-quarters of shoppers favor brands that offer loyalty programs.
- Only 2.7% of consumers say they are not loyal to any brand, whereas 54% are loyal to 1-5 different brands.
- A 5% boost in customer retention can increase profits up to 95%.
- Ecommerce revenue generally follows the Pareto principle, meaning 80% of your profits come from 20% of your customers.
- Shoppers in a loyalty program spend 12-18% more than non-members.
In general, consumers rely on trust and on their own experiences when deciding where to shop, which means they’ll return again and again to brands that are proven to be reliable — even if it costs more.
There’s no denying the power of a loyalty program, but you might not know where to start when implementing one for your online store. Thankfully, technology can handle the bulk of the work. These are some of the best tools for ecommerce loyalty programs.
Program #1: Smile.io
Price: From $49/month
Smile.io is a loyalty management software designed for online businesses, including ecommerce stores. The platform focuses on growing internet-based businesses through its fun and easy reward programs. Currently, Smile.io is the world’s largest reward program provider, with over 25,000 reward programs catering to more than 50 million businesses worldwide, including Polaroid, Topps, Inkbox, and Pixi, among others.
One of the best parts of Smile.io is its ability to initiate various loyalty programs (including points-based programs and referral-based programs with bonuses for completing activities like leaving product reviews) from a single platform. The software is easy to use, and the user interface is designed to be simple to navigate, even for non-tech-savvy retailers. Users praise its customizability and its functional capabilities that make it the ideal choice for brands looking to enrich the customer experience.
Pros:
- Available in various app stores, including BigCommerce, Shopify, Shopify Plus, Wix, and WooCommerce
- Can reward customers for social sharing, product reviews or direct referrals
- User-friendly, customizable platform that doesn’t require coding
Cons:
- No free plans beyond the trial
- Some reviewers have had trouble reaching customer support
Program #2: LoyaltyLion
Price: From $359/month
LoyaltyLion is another loyalty management software that facilitates either a points-based or rewards-based program for your ecommerce business. Beyond these capabilities, the platform also has features to help online retailers create personalized shopping experiences. LoyaltyLion understands the power of repeat engagement, so it gamifies the consumer journey by rewarding shoppers for completing actions like following your brand on social media or creating an account on your website. Additionally, the platform lets you set parameters for different tiers of your loyalty program to create a feeling of exclusivity for higher tier customers.
Pros:
- Offers a Shopify POS system integration
- Email and SMS marketing flows available through Klaviyo
- Customers can instantly redeem points
Cons:
- Pricing is higher than many competitors
- Clunky user interface that may have a steep learning curve
- Features vary between ecommerce platforms
Program #3: Yotpo
Price: From $29/month
Yotpo is one of the best ecommerce loyalty programs that offers rewards to current customers and attracts new ones. This platform is perfect for those who want to introduce marketing automation into their business. It provides various marketing channels, including reviews, SMS marketing, and referrals, to enhance customer advocacy. Additionally, Yotpo is user-friendly, and you don’t need any coding skills to develop your rewards program.
The rewards and referrals program is highly customizable, allowing you to incentivize customers to purchase more and unlock greater rewards. You can also schedule specific marketing campaigns to increase sales. Additionally, Yotpo encourages user-generated content, turning existing customers into brand ambassadors. It’s important to note that Yotpo is a web-based tool that includes several different apps that you can utilize.
Pros:
- Free plans available
- Product suite offers various marketing and customer engagement tools
- Integrates with other tools to create an ecommerce tech ecosystem
Cons:
- Limited reporting offered in the native analytics tool
- Complicated setup
Reward Their Loyalty
Customer loyalty programs have become a pillar of successful ecommerce businesses. They provide businesses with a valuable opportunity to engage customers, build brand loyalty, and drive revenue growth. Using powerful platforms like Smile.io, LoyaltyLion, and Yotpo, online retailers can now implement and manage customer loyalty programs with ease. These platforms offer a range of customizable reward programs, reporting features, and integrations with popular ecommerce platforms. As ecommerce continues to grow and evolve, customer loyalty programs will remain an essential tool for businesses looking to stand out in a competitive market.
