If you are still wondering whether a loyalty program is worth the investment, here is what research has to say: 81% of customers are more likely to continue buying from brands that have one. The pandemic has once again reminded businesses that existing customers can contribute much more to sales than new customers.

Secondly, discounts and special offers are no longer as attractive to customers as they once were. The emphasis is clearly on customer experience. Shipping delays and the non-availability of everyday items are causing customers to reevaluate their buying decisions, forcing brands to adapt.

Though brands have been leveraging benefits like free shipping and extended returns windows to drive sales, there is a clear need for supplementing these with a loyalty program.

E-commerce margins have been steadily falling since before the pandemic started. One way for e-commerce businesses to increase their profits is by focusing on repeat sales. By offering loyalty rewards, e-commerce stores can build stronger customer relationships that directly translate into higher customer lifetime value- a key focus area for virtually any e-commerce store.

For small e-commerce business owners, loyalty programs are the perfect way to build long term profitable relationships with customers instead of merely pursuing a sale.

What makes loyalty programs so effective?

The key reason why loyalty programs are so popular is because customers like to get something extra for every dollar that they spend. Over time, they become habituated to getting rewards that drive them to engage with brands repeatedly. Loyalty programs leverage the power of reward and reinforcement, which dramatically improves customer engagement and average order size across their journey. Ecommerce brands like Amazon have been iterating and evolving their loyalty programs over the years, boosting growth beyond all expectations.

For example, Amazon Prime members can access music, videos, and movies in addition to free shipping on a wide range of items, which gives it an unbeatable advantage over competitors like Target and Best Buy. The company has built up a loyal fan following with the Prime program. Smaller e-commerce companies may not have the resources to match billion-dollar brands, but that does not mean that they have no chance of attracting customers. By playing to their strengths, smaller companies can produce similar results.

However, the worst thing you can do is simply copying the loyalty programs run by bigger brands. There is plenty of scope for innovation, provided you are willing to test different approaches and learn from experience. Starting from the bottom line, tailor your program to your own customers’ unique preferences.

After all, your investment in a loyalty program can be jeopardized by the fact that not everyone is attracted by the same rewards. It is also important to link it to key business KPIs that you aim to achieve in short to medium term. You can certainly combine the best features of two or more loyalty programs to come up with your own.

To get you started, here are some of the curated ideas for loyalty programs designed to boost your sales:

Add tiers to your loyalty programs:

To drive more sales, you can progressively increase the benefits a customer can earn depending on how much they spend with you. You can even allow customers to earn rewards for taking specific actions like liking or commenting on your social media posts. However, it is important to clearly communicate the qualifiers for each tier to avoid confusing customers.

For example, you can set up four tiers- Silver, Gold, Diamond, and Platinum – where customers receive benefits based on the number of points they have earned. Decide how many points to award per dollar spent, as that will determine the type of rewards to offer. Some reward options include early access to holiday season sales, bonus points, discount coupons of different denominations, and birthday freebies.

Turn it into a game

Telling customers “buy more now so that you can get more at a future date” does not satisfy their need for instant gratification. After a few days, the redemption of points may not even be remembered by them.

Fortunately, a solution to this problem has already been found: gamification. This concept seeks to trigger the typical customer’s drive for achievement and belonging to drive sales and referrals.

For example, a Silver customer purchasing products worth $500 gets a Gold badge that appears each time he logs into his account. For every additional badge a customer earns, he enters a new level and qualifies for redemption options of greater value. Ensure that the customer’s account has a dashboard displaying the number of rewards he still needs to get to the next level. Add a deadline to make the customer experience more exciting.

Help customers contribute to a noble cause

Engaging a customer’s desire to give back to society by contributing to a worthy cause is a great way to build loyalty. Charity based programs in collaboration with non-profits, health, education, or social welfare organizations can drive customers to order more out of a sense of responsibility to less privileged people.

For example, add bonus points in increments of 25 for purchases over $500, $1000, $1500, and so on. Include a video introduction by a popular celebrity or influencer to add credibility to your program.

Upgrade to VIP for a fee

VIP customers are worth investing in as it can provide you disproportionate returns. However, often other customers may be willing to buy their way into the VIP club. You can capitalize on this trend by offering paid upgrades, allowing customers to skip one or more qualifiers. Ensure that you highlight the benefits of the VIP tier and contrast it with the regular benefits in your emails and social media posts.

For example, for a fixed monthly fee of $750, members can be given benefits like free 2-day shipping, free gift packaging, double points, concierge services for booking hotels, outdoor tours, etc.

Last Words:

One cannot guarantee customer loyalty. So, it is critical to always deliver on your promises. Quality customer service can play a critical role in your efforts to retain customers and promote sales. The cost of hiring and training agents can, however, be prohibitive. This is where partners like Saufter can help.

Our team of professionally trained remote customer support agents quickly adapts your brand’s voice and tone, helping you drive engagement and sales. Our Zero-Risk Guarantee has you covered in case you are not satisfied for any reason.

Also, you can try Saufter – the customer service software that can help you automate and scale your customer support.

Contact us today to know more.