Beginner's guide to launching an ecommerce loyalty program

One of the most effective ways to grow your ecommerce business is to implement a rewards program. It’s a great way to show appreciation and keep your customers coming back to buy more 

As you may know, acquiring a new customer is much more expensive than retaining an existing one. In fact, it can cost up to seven times more to acquire a new patron. Additionally, the success rate of selling to an existing customer is 60-70%, while for new customers it’s only 5-20%. These stats highlight the importance of nurturing relationships with existing customers and starting an ecommerce rewards program is a great way to do it 

 

What is a Customer Rewards Program?  

A customer rewards program (also called a loyalty program) is a special program offered to shoppers in an effort to build and nurture their loyalty to your brand. This type of program helps increase customer loyalty by offering rewards to customers who frequently purchase your products.  

With a Rewards program, you may offer:  

  • Freebies 
  • Discounts  
  • Coupons 
  • Early access to new products  
  • Other incentives  

A rewards program can be as simple or as complicated as you want it to be. There are a few common options: 

  • Point system: this type allows shoppers to incur points with each purchase and when someone reaches a certain threshold, they receive a coupon or free gift 
  • Tiered programthis program gives customers reward for meeting a certain threshold of money spent. For example, if they spend $100, they receive a coupon or freebie.  
  • Memberships: Joining a program for a small price gives customers VIP access to special rewards and incentives when they make a purchase.  
  • Combo: Some ecommerce businesses will combine some of these methods to create a hybrid rewards program. 

 

Starting Your Customer Rewards Program  

While starting your rewards program may sound daunting, it doesn’t have to be. You just need a well-thought out plan. Here are the steps to get your program up and running: 

 

1. Pick a Name

What will you call your program? It’s important to make it catchy and attention-grabbing. Take your time and create something memorable.  

As you’re deciding, try to find a name that plays off your brand, logo, products, or store name. For example, Sephora’s loyalty program is called “Beauty Insider,” perfect for a cosmetics store and it implies that loyal customers get to be in the loop while others are not.  

Another great example is Bee Built’s reward program called Swarm Swag. The company continues the play on words with the various tiers they have, including Worker and Queen Bee status. 

 

2. Pick a Rewards Program Type 

There are advantages to each type of loyalty program, so it’s important to keep the shopping habits of your customers in mind. For example, you can offer a program that is points-based with short-term rewards if you have customers who make a lot of purchases for low average transaction amounts.  

Alternatively, if you have a huge product catalog, you might consider a paid rewards program that gives customers continuous perks like free shipping or a percentage off purchases.  

 

3. Establish the Structure of Your Rewards Program 

Here’s where the rubber meets the road. You have to decide on the structure of your rewards program. Think about the answers to these questions:   

  • If it’s point-based, how do customers earn points and what is the value of those points?  
  • If it’s tiered, what are the different tiers and different perks?  
  • If it’s paid rewards, how much will customers have to pay, and what makes it worth the cost 
  • How and where do customers sign up for it? 

Just like most things related to ecommerce, the rewards program you start with will likely evolve over time. But, thinking about the above questions will give you a good starting point.  

 

4. Choose an Infrastructure 

Now is the time to choose the infrastructure for your rewards program. You’ll need a plugin, third-party service, or software solution to implement your program. Your ecommerce platform may offer some of these, so integration should be easy.  

Otherwise, there are some great options out there. Here are a few to consider:  

  • Gratisfaction – this plugin for WordPress is perfect for sellers who use WooCommerce.  
  • bLoyal – this app works well with many platforms, including Shopify, Magento, WooCommerce, and more. 
  • iVend Loyalty – this software offers a flexible points and rewards management application for all types of retailers.  
  • Open Loyalty – this opensource software helps retailers build customized rewards programs. 

 

5. Get the Word Out about Your Program

Marketing your rewards program is essential. Plan to share the news through your existing marketing channels, include it in newsletters, promote it on social media, and be sure to add links to the sign-up page throughout your website. You may also want to look at using a pop-up prompt on your site to invite your customers to join.  

Make sure that getting to your rewards program page is easy for customers and that they can sign-up for it at any point in the buying process. Also, add it to the confirmation page and package contents. 

 

Final Thoughts about Ecommerce Rewards Programs  

Rewards programs make it easy to engage with customers and boost sales. The above steps should help you get started with your rewards program and create more loyal customers.  

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