A customer loyalty program is a strategy you can use for your business to retain customers and encourage them to come back and buy from you again. It has been reported that around 80% of an online store’s revenue is from 20% of their repeat customers. So try to think of ways that will keep bringing those customers back to shop!

brands fight to get customers. using a loyalty program is a good way to get them to your store vs your competition

Brands are always fighting for customer loyalty. Retail is a competitive environment. When brands offer similar products, you have to be. Something that many stores offer are these types of rewards. Whether it is a discount for purchasing over a certain dollar amount or you are given points to redeem. Take advantage of what your store hosting platform has to offer in the way of marketing and promotions, because they really can be a big help in the long run.

Why a Loyalty Program Works

A consumer that knows they have store credit, or that they are earning store credits, will be more willing to shop at your store so they can come back to use those points.  They are like coupons that never expire.

I’m a member of some sites like this. One of them charges me a monthly amount and that turns into a store credit. I can then use that store credit to purchase something each month. Another that I’m a member of, gives me reward points for every dollar spent. I enjoy shopping on these sites because 1. they offer products that I like and 2. the rewards keep me coming back for discounts.

Types of Loyalty Programs

Points Programs
By far the most popular program. It’s because points are easy to earn and use. Customers could redeem those points for discounts, purchase credits, giveaways or to use towards free products.

Tier Based Programs
This is where your customers are on different reward levels based on how much they spend. Like a Silver, Gold and Diamond levels. The more you buy, the higher the tier and the more rewards you get.

Play a Game Program
Spin to win! Scratch the ticket! This allows the customer to win a prize (like a store discount) as soon as they land on your site.

Subscription or Paid Programs
This is also called a Premium Loyalty Program because the customers actually pay a monthly fee and receive something every month. This is like one I’m a member of. I pay a monthly fee, and get one free thing every month.

Refer a Friend Program
Referral programs reward customers for sending their friends and family to your store. Psst.. this also reduces some of your marketing costs because customers are doing the work for you.

Mission-based Programs
Not all loyalty programs need to be about tiers or discounts. If your company is mission driven, you could try a loyalty program for a cause. Partner with a non-profit charity that aligns with your business. This will help drive customers with the same shared values and enable you to engage with your customers in a completely different way.

Steps to Create a Loyalty Program

steps to create a loyalty program image

To create a loyalty program, Step 1 is to figure out your goals and what you want to get out of it. Like, what do you want your customers to do? Sign up for the newsletter? Send customers to you? Leave a review? Purchase something in particular? Get them to just come back every month?

Second, choose the reward you are going to give the customers. Free Gifts? Discounts? Exclusive perks like early access to new products or member only deals?

Third, you select the type of Loyalty Program you are going to use to accomplish all that. The type of program you choose will then help you to lay out the rest of the steps in deciding how you want to run the program.

My last tip, don’t try and do this manually. Check with your shopping cart provider first. Do they provide built in loyalty programs? If not, check with your hosting provider, ask them if they have a recommendations based on what their other customers do. But there is also loyalty program software that you can subscribe to as well. A quick Google search for loyalty program software shows me that! So you have a lot of options!

By Tisha Hedges

Director of Operations for Worldwide Brands, Inc

5 thoughts on “Loyalty Program – Competing with Big Online Retailers”
  1. I spend my half an hour morning break to read this website’s articles every day along with a mug of coffee. 🙂

  2. I think due to the huge rival, every online stores coming forward to run loyalty programs. I strongly believe these loyalty solutions are quite enough to hold the existing customer’s purchase. Other than these good response and trustworthiness of retailer could also enhance loyal customer.

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