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Loyalty Programs: How to Boost Store Sales

Hello e-commerce folks!

The way to win your customers’ continuing loyalty – and your fair share of their purchasing power – is by rewarding them for actively engaging with your brand. But putting an attractive loyalty program in place is just the beginning.

According to a recent loyalty census conducted by Colloquy, 58% of customers registered in loyalty programs, don’t actively participate in said programs. Those that do, however, participate for two main reasons: the loyalty program they’re registered with is easy to understand (81%) and the rewards/offers are meaningful to them (75%). When you consider that a “fully engaged” customer generates up to 23% more ROI than the average customer, it becomes clear why a winning loyalty program is so pivotal.

Take, for example, Predator Nutrition, one of the leading sports nutrition companies in the UK. By introducing an interactive 360⁰ loyalty program to its eCommerce site, the company was able to boost its AOV (average order value) by an impressive 33% and increase the number of loyalty points redeemed daily by a whopping 73%.

The good news is there are several ways you can take your loyalty program from ordinary to outstanding so boosting customer participation and ultimately your company’s revenue and reputation.

Reward Customers For 360-degree Engagement

In an age when social media reigns supreme, only rewarding customers for purchases is short-sighted. While social media has put customers at the center of the eCommerce universe, it has also brought multiple opportunities for companies to leverage their allegiance as brand ambassadors. In order to maximize its performance, your loyalty program should take full advantage of the opportunities 360-degree engagement affords. This means rewarding your customers for actions like writing reviews; making referrals; sharing your site link; signing up as an email subscriber, and even adding products to their wishlist.

Pick An Appropriate Name

Another important step in creating a winning loyalty program is picking a name that ties in with your brand’s image. It should also be concise and catchy and aptly capture the sentiment of your program. The same applies to the naming of your actual points; consider your target audience and their emotional connection with your brand to determine what is likely to appeal to them.

About 93% of loyalty programs use the word “points” making it a solid first choice. Other top options include rewards; club; inner circle; member; deal; bucks; thank you; and miles.

More Is More

When designing the points system for your loyalty program, it pays to apply a little consumer psychology, and in this case, less is definitely not more. A sound workable system typically allows customers to earn 10–20 points for every dollar spent. This makes customers feel they’ve accrued a meaningful number of points; after all, 250 points seems so much better than 25 points even if in reality they translate to the same value. Of course, do not inflate the numbers to a point that they are not believable anymore.

Offer Multiple Reward Tiers

Another powerful strategy for encouraging customer participation in multiple reward tiers. The tier system works to motivate customers by elevating your program into a “gaming” dimension. Customers should automatically be enrolled at the entry-level tier. And gain some benefit (however small) for simply signing up; for example, the opportunity to purchase an exclusive product or a once-off offer of free shipping. Naturally, these incentives should increase in value for each new level gained in order to keep your customers inspired.

The Element Of Surprise

The secret of top-performing loyalty programs is in their power to make customers feel it’s “all about them”. And what better way to acknowledge your customers and make them feel truly appreciated than by rewarding them with a set number of extra points when their birthday rolls around; if they’re in your top five purchases for a given month; or for achieving certain milestones, such as the most referrals in a particular time period.

This “element of surprise” strategy is highly effective at maximizing customer delight.

Create Regular Reminders

It’s not enough to merely create a captivating loyalty program; in the highly competitive world of e-commerce, the onus is on you to actively encourage engagement. Therefore, regular communication with your customers is crucial. Sending them notifications about the number of points they’ve accrued and how close they are to achieving the next reward level are legitimate reasons for keeping in touch without seeming like you are “pursuing” or “pestering” them. Other great reasons for getting in touch are if they’ve earned new loyalty points; attained a new tier level; or to send them a monthly points summary.

Ensuring your loyalty program is successful in the long-term requires active and regular participation from your customers. This means you need to actively and regularly “upgrade your loyalty program” or run the risk it’ll be relegated to the growing pile of programs “gone-and-long-since-forgotten”. By implementing the above strategies and leveraging the power of social media, you can fully realize the potential of your loyalty program to boost ROI and build a following of devoted brand ambassadors.


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