The Ultimate Guide to eCommerce Loyalty Programs

Online shopping is important, and companies want you to continue making purchases. That is where loyalty programs come in handy. These programs reward you for shopping within the same brand frequently. They are a means of extending gratitude and ensuring that you remain cheerful. 

In fact, the top-performing loyalty programs boost revenue from customers who use them by 15-25% annually.

Here, we will discuss loyalty programs, why e-commerce stores need them, and what makes a good loyalty program. We will also guide you through the process of creating your own loyalty program from scratch and provide you with examples of successful programs so that you can be inspired.

No matter if you are starting a loyalty program from scratch or looking to improve your existing one, this guide covers all the basics for constructing a loyalty program that will engage your customers and grow your online business.

What are the eCommerce loyalty programs?

An e-commerce loyalty program is a rewards system that online businesses use to encourage repeat purchases. These programs offer rewards like discounts, special content, and early product access, meeting shoppers' diverse interests. When customers enjoy these benefits, businesses see increased loyalty and sales.

These programs are designed to be a seamless part of the shopping experience, building a strong community around your brand. They can be simple, like earning points for rewards, or more complex, with features like games and achievements. The key is to make the program easy to understand and enjoyable for customers

Why loyalty programs matter for E-commerce businesses

• Strong connection with the brand: Collecting loyalty points makes a customer feel more involved with the brand; they are now an insider in a certain sense. This makes them interested in coming back for more and recommending them to friends about the brand.
• Promoting new products: These programs allow organizations to inform consumers about new products before the general public is made aware of them. Customers in the program may be likely to be experimental in their buying decision-making, which is an added advantage to the business since the business will be able to sell more and get feedback from its customers.
• Making more money: Some benefits of loyalty programs include the following: By encouraging more frequent customer purchases, more money can be made for the business. If they know that they stand to get certain rewards or have an opportunity to get certain types of discounts, they may find it convenient to shop more often.
• Getting useful information: Businesses can discover a lot from such programs regarding the customer profile, such as their preferred products and their frequency of purchase. This information can also assist businesses in making correct decisions about what products to provide and how to position those to the customers.
• Selling more: With special discount coupons and reward offers, companies can sell more products to customers and earn greater revenues per customer. This may help customers be willing to purchase several products at once or select items that are slightly more costly than they would if they spearheaded a campaign that would award them some points or other alternative incentives.
• Keeping customers coming back: Customer loyalty can be attained by offering them more reasons to shop in those stores and not elsewhere. If they are told that they will get some reward or they will get some discounts, then they may prefer to shop in that store than going somewhere else.

Essential components of an effective loyalty program

1.  Clear and straightforward rules: Ensure the rules are easy to follow. Customers should quickly understand how to earn points and redeem rewards, without any confusion. If the rules are simple, more people will join and stay active in the program. Clear instructions can also reduce customer questions and make it easier for staff to explain the program.

2. Seamless integration with eCommerce: Your loyalty program should blend smoothly with your online store. Customers should be able to track their points and rewards while shopping online effortlessly. If they can see their points adding up and easily find out what rewards they can get, they will feel more motivated to keep shopping with you. Make it easy for them to use their points at checkout too.

3. Optimized for mobile devices: Since many consumers rely on their mobile phones often, ensure that the program created is mobile-based. : It should be highly responsive especially when used on handheld devices like the Smartphone and Tablets. If frequently they use their mobiles then they are quite conscious about their points and rewards using the program. Specifying that the mobile version should not be complicated and be as friendly and usable as the desktop version.

4. Multi-channel engagement: Market the product to customers through electronic means such as emails or through physical touch points such as the in-store experience. This helps to maintain their bond and keep them informed of why your programme may be best suited to their needs. You ought to remind them of the points and rewards they have through other methods so they may not forget. Encourage your customer to undertake the survey through social media or through emails and thereby offering more points or a special offer.

5. Effective offline presentation: To achieve penetration, communicate your loyalty program through physical shops. Promote membership through other alternative methods such as the use of signs, membership brochures, and product recommendations by members of staff. Ensure that the signing-up processes are as simple as possible and that employees will be well capable of walking customers through the positive experiences. Since the notices are not always easily noticeable, having the program aired and being displayed in the store might catch the attention of those who did not know of its existence.

6. Personalized experience: Try to integrate some personal elements into your program. Include messages such as ‘happy birthday’ or congratulations when sending automated emails, and recommending products for repurchase. If the customers are feeling like the program designed and implemented for them they will stick around. The messages also affirm their worth as people, not merely as consumers, prompting a positive response from recipients.

How to create an eCommerce loyalty program

Creating an ecommerce loyalty program is a great way to keep your customers coming back. Here’s a simple guide to help you get started:

1. Set your goals

Think about what you want to achieve with your loyalty program. Do you want more repeat customers, higher sales, or better customer engagement? Clear goals will help you design your program. Knowing your goals will also help you measure your program's success and make any necessary adjustments.

2. Know your customers

Look at your customer data to understand what they like, how they shop, and what motivates them. This will help you create a program that they’ll love. Talk to your customers or send out surveys to get more insights. The better you know your customers, the more tailored and effective your loyalty program will be.

3. Pick the right program type

It is preferable to opt for the type of loyalty program that is best suited to both your company and your consumers. The most common ones are the point’s based programs, tiered-based programs, and subscription-based programs. Both the questions posed were thought-provoking and would make you think about what your customer would like and the incentives they would be willing to respond to. The right type of program means they’ll remain engaged and interested in the consequent learning process.

4. Choose rewards

Select a type of loyalty program that is right for your business and that your customers will go for. These include the point-reward, tiered reward, and subscription-based programs. Consider the likelihood of the customers enjoying the content or seeing their participation as a motivation. The right type of program will keep them engaged with a lot of enthusiasm to enjoy the device.

5. Make it easy to use

Establish a straightforward working system so that the customer can easily decipher it. This could be a separate page on your website or a mobile application. Make it simple for them to track point accumulating, redeeming points, and engagement. When the system is easy to understand and navigate, more of your customers will enroll into as well as continuously engage in your loyalty program. Be sure to give directions if necessary and to assist the customers in any way they may require.

6. Promote your program

Some of the ways to inform your customers about your loyalty program is by using emails, social media and your website. Ensure they comprehend the advantages of becoming part of it and how to do so. Try to use attractive pictures and headline-like slogans to intrigue them. Sometimes, just remind them about the existence of the program and some new additions or improvements which were made to the program.

7. Keep improving

Measure how effective your loyalty program is and request for feedback from customers occasionally. It is now time to improve the program and make it even more interesting for the students to complete. It is essential to keep amending and enhancing its features because a stagnant program is boring. Be flexible and willing to adapt because as customers evolve, so do their consumerism habits, preferences and needs.

5 successful eCommerce loyalty program examples

1. PetSmart Inc.

PetSmart Inc. has a great loyalty program for pet lovers. Customers earn 8 points for every $1 they spend, including on services and donations, which encourages shopping and charity. Members get special email offers, which keeps them engaged, and they can earn points by donating to PetSmart Charities, making them feel closer to the brand. PetSmart also celebrates pet birthdays with a free surprise, adding a personal touch. After buying 10 products, members get a free Doggie Day Camp session, encouraging more purchases.

These features create a strong emotional connection, increase email open rates, and build loyalty through personalized rewards and smart offers. PetSmart's loyalty program effectively engages customers and builds lasting relationships.

2. SHEIN bonus points program 

SHEIN Bonus Points, rewards customers for shopping and engaging with the brand. Customers earn points by registering, buying items, adding to their wishlist, reviewing products, and joining events. 

Points can be used to get discounts on future purchases, up to 70% of the total price. The program is unique as it rewards customers for various interactions, not just purchases, fostering a stronger connection. 

SHEIN makes it easy to track points through their app, ensuring customers know about their savings. SHEIN Bonus Points is a great way to save money and stay connected.

3. Walmart +

Walmart has a program called Walmart+ that helps people shop online. Members of this program get free delivery from the store on the same day. The prices online are the same as in the physical stores. 

Members can choose when they want their items delivered, which makes shopping easier. There's also free shipping with no minimum order, so people can buy what they need without worrying about extra costs.

Members also get a discount on gas at some places. They can check out without touching anything, which is safer. Members also get early access to special deals and new products. Overall, Walmart + makes shopping online more convenient and affordable for its members.

4. Amazon Prime

Amazon Prime is a special program by Amazon that gives its members some great benefits. Members can get free shipping for many items they buy in just two days. They also get access to lots of movies, TV shows, and music through streaming services. 

Members can even get exclusive deals that others can't. This program has made many people like Amazon even more because it's convenient and helps them save money. 

With Amazon Prime, customers can shop without worrying about shipping costs, enjoy entertainment, and get special offers, making it a valuable loyalty program that keeps customers returning for more.

5. Flipkart plus 

Flipkart Plus is a loyalty program that rewards frequent shoppers with extra benefits. The program has two tiers: Flipkart Plus and Flipkart Plus Premium. To join Flipkart Plus, customers need 4 successful transactions in the past year, while Premium requires 8. 

Members earn additional SuperCoins on every purchase, with Premium members earning double. Both tiers offer special incentives using SuperCoins, early access to sales, and a welcome bonus of 300 SuperCoins. 

Premium members also get 300 SuperCoins for transactions over ₹10,000 and exclusive offers. Joining is free, with no SuperCoins deducted, and the premium tier is being phased in through December 2023. 

Certain transactions, like gift cards and digital products, don't count towards eligibility. Overall, Flipkart Plus provides valuable rewards and perks for loyal customers.

Case study: Essence cosmetics loyalty program

Essence Cosmetics, recognized for its global presence in the beauty industry, aimed to boost customer engagement and elevate repeat purchase revenues. To achieve these goals, the brand partnered with Zinrelo, a leader in loyalty rewards platforms, to develop and launch a comprehensive loyalty program tailored specifically for their diverse consumer base.

Challenges

• Low Customer Retention: Essence Cosmetics was facing challenges in retaining customers due to the competitive nature of the beauty industry, where constant product innovation is standard.
• Need to Improve Customer Engagement: To foster long-term relationships, it was critical to enhance how customers interacted with the brand.
• Desire to Increase Repeat Purchase Revenues: Essence Cosmetics aimed to retain customers and significantly boost revenues from repeat purchases.

Solution

To address these challenges and meet its strategic goals, Essence Cosmetics implemented a Rewards Program using Zinrelo’s modern loyalty rewards platform. This program was designed to strengthen engagement with loyal customers and maximize revenue through repeat purchases. It included points for purchases, social media engagement, and referrals, allowing for a more personalized and engaging customer experience.

Results

• 118% Increase in Customer Retention: The rewards program exceeded expectations in retaining existing customers, nearly doubling retention rates.
• 84% Increase in Repeat Purchase Revenue: There was a remarkable increase in revenues generated from repeat purchases, indicating that customers were more engaged and incentivized to shop repeatedly.
• Enhanced Customer Engagement: The program led to heightened interactions between the brand and its customers, fostered by rewards for engagement beyond just purchases.

Wrapping up: making the most of eCommerce loyalty programs

eCommerce loyalty programs are not a gimmick; they are a proven strategy for growing your business. Knowing what these programs are, why they are crucial, and how to design a good one can help ensure customer satisfaction and repeat business.

This means that developing a good loyalty program should be as simple as possible and come with things the clients want. It can also help to add more value to your program if you can make it fit for every customer. Here are some steps to develop a program that could be effectively used in your business.

As demonstrated in the case study, a well-designed loyalty scheme can open doors to more sales, customer satisfaction, and knowledge of their preferences. Listening to customers’ complaints and following emerging trends, you achieve the aim of making the loyalty program efficient.

Lastly, eCommerce loyalty programs are effective in encouraging customers to continue purchasing products and helping expand online businesses. When you create a program that is effectively in line with customer preferences and keeps it evolving, customer loyalty can be yours for many years.