The Best Loyalty Program Ideas for eCommerce Stores
July 16, 2020
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If you’re considering an eCommerce loyalty program for your business, hats off to you! eCommerce has exploded in the last 10 years or so, as online shopping grows increasingly convenient. Of course, there’s been a particular surge in eCommerce this year, as it quickly became a necessity for many.
Consumers who weren’t familiar with online shopping before the pandemic emerged were forced to adapt, and have now grown accustomed to it. Meanwhile, businesses with no online presence prior to Covid-19 were also forced to adapt, and now have digital systems in place.
With the new norm that we find ourselves in, it’s safe to assume that eCommerce is here to stay.
Whether you’ve just recently adjusted your business to include an online store or it’s always been an integral part of your business model, there’s something else that’s here to stay, too: customer loyalty.
In fact, customer loyalty is more crucial now than it’s ever been before. Why is this?
There are several key reasons. First of all, your existing customers are the very people who can help you bounce back from this difficult period. The following stats speak for themselves:
2. A 5% rise in customer retention can lead to a 125% increase in revenue (Bain & Company)
3. Existing customers typically spend nearly 70% more than new customers do (Bain & Company)
But beyond that, eCommerce is a much more competitive world than brick-and-mortar. Consumers still need to buy products, but now they have more time on their hands to surf the web for the best prices and deals.
As such, the only way independent businesses with online stores can save themselves from disappearing into the shadows cast by eCommerce giants like Amazon is to build a healthy pool of loyal customers.
It’s not just about discounts, and it’s not just about sending a few emails and writing a few social media posts to stay front-of-mind. Shopping with your business online must be a convenient and engaging process, from beginning to end.
This is where a good eCommerce loyalty program comes into play.
On the surface, an eCommerce loyalty program isn’t much different to the classic brick-and-mortar store loyalty program that you often experience when buying a coffee, shopping for groceries or getting a haircut.The idea is to entice customers to make repeat purchases, spend more per transaction, and to build an emotional connection to your brand through engagement. The only difference is that this is all done digitally.
Below the surface, however, a loyalty program for your online store goes far beyond incremental discounts and “Buy X, Get Y” offers.
When implemented properly, an eCommerce loyalty program can offer your customers:
A seamless online shopping experience
A personalized customer journey, where rewards are tailored to cater for each customer’s specific needs
Access to experiential rewards and VIP perks, which are much more effective than monetary rewards as they make the customer feel like they’re part of a community
Elevated social media engagement in the form of competitions, referral incentives, and other enticing interactions that build an emotional connection
Before we dive into how you can pull these things off though, let’s first decide on a mechanism for rewarding your online customers. This is the actual process in which customers accrue points, redeem rewards and interact with your loyalty program.
What works for one eCommerce business doesn’t necessarily work for another, so let’s take a look at some options.
How do I create a loyalty program for my eCommerce store?
Option 1: DIY Loyalty Program
Depending on the size and scope of your business, average daily transactions and so on, it might be possible to manage the loyalty program yourself.
For this to work, you’ll need to map out your entire rewards structure. For instance, what does the customer need to do in order to qualify for a reward? How will you keep track of loyalty points? What will the rewards be? How will you issue these rewards to your customers?
It’s worth noting that going about it this way can be overwhelming and time-consuming – two words which no business owner wants to hear! Especially if you’re already managing every other area of the business yourself.
However, here is a breakdown of the standard rewards structures that most loyalty programs employ.
An item-based rewards structure
This is your standard cafe, car wash or hair salon loyalty program, where each purchase of an item (typically one per visit) earns you a stamp. After X visits, you earn your reward.
A spend-based rewards structure
This is when customers acquire “points” or “stamps” based on how much they spend in each transaction. For instance, $5 might equate to 50 loyalty points, and 250 points earns you a free X, or a discounted Y when you buy any Z.
This is a popular system for its simplicity, as well as the fact that it can be applied to a wide range of products and services, regardless of each item’s value. You’ll often come across a spend-based loyalty program structure in pharmacies, supermarkets and other retailers that sell a wide variety of products with differing values.
A VIP membership structure
This type of loyalty program uses a different model altogether, and every business puts their own spin on it. The idea is that customers sign up to the program on a subscription basis, and this grants them access to various experiential rewards like skip-the-queue benefits, free shipping, and other perks.
It could be a paid membership (like Amazon Prime), a tiered system where members get “promoted” to higher tiers based on their number of loyalty points (like Sephora Beauty Insider) or some other system.
The VIP membership structure is popular among cosmetics brands, airlines, hotels, and so on.
Perhaps you’d like a little from Column A and a little from Column B…
Of course, you can find your own spin on the models listed above. For example, Canadian restaurant chain Kinjo Sushi & Grill uses a combination of the item-based and spend-based rewards structure.Kinjo customers earn a stamp for every transaction of $20 or more, and 10 stamps earns them a $20 voucher. You can learn more about the Kinjo Sushi & Grill Rewards Program here.
Now, as I mentioned earlier, creating and managing your own eCommerce loyalty program can be a very tedious and exhausting affair. These days, there are so many customer loyalty solutions out there for eCommerce stores that there’s really no need to take it all on yourself.
Option 2: Loyalty Solution Provider
In recent years, a whole host of established and reputable loyalty solution providers have emerged onto the market. These are B2B companies that offer businesses a ready-to-go digital loyalty program on a subscription basis.
These SaaS offerings come with the various rewards structures (listed above) already built into them. The business owner or merchant simply signs up to the service, selects his or her preferences and voila! Just like that, your business has a functional digital loyalty program.
This integration of online stores and ready-made digital loyalty programs saves business owners time and stress.Depending on which eCommerce platform your business uses, there should be numerous loyalty app integrations available, which you activate on your store. For businesses with both a Shopify store and a physical shop, Stamp Me is the ideal solution, as our highly interactive digital loyalty app can operate across both channels.
This means that if a customer makes a purchase in your physical shop one day and then purchases something from your online shop the next day, both purchases will accrue loyalty points and count towards their next reward.
This is a huge “plus” for creating a seamless omnichannel experience for the customer.
However, if integrating a loyalty app into your online store isn’t possible for whatever reason, fear not… there’s another way!
Let’s say you run a business selling personalized mugs, t-shirts and other items online. You advertise on the website that you have a loyalty program, and that customers can claim their points upon delivery of their items.The customer uploads an image, selects the items he/she wants the image printed onto, pays for their purchases and eagerly awaits delivery.
You (the business owner) prepare the personalized items, package them up, and slap a unique QR code sticker onto the packaging. You also include a leaflet that instructs the customer to:
1. Download the digital loyalty app
2. Sign up with their email address or phone number (and perhaps their date of birth of you want to offer them a Birthday Reward)
3. Open the app and scan the unique QR code on the product packaging to accrue points/redeem rewards
This is how businesses are able to engage eCommerce customers with a loyalty program, without any integration between the two. It also works for in-person transactions; the merchant simply keeps a roll of unique QR code stickers behind the counter, and applies one to the packaging at point of sale.
At Stamp Me, we can get you set up with this rewards method. We call it OneStamp, because once our unique QR codes are scanned by the customer and their points awarded, the code is “burned” and can no longer be used, protecting your business from fraud.
Whether your online store is better equipped for loyalty app integration or the unique QR code method, Stamp Me is a trusted loyalty solution utilized by businesses of all shapes and sizes, both eCommerce and brick-and-mortar, in every corner of the globe.
Whatever approach you decide to take with your eCommerce customer loyalty solutions, here are some helpful tips and tricks to ensure your eCommerce loyalty program gets off to a winning start.
1. Upfront Signup Incentive
It might seem counterintuitive (or even absurd!) to reward first-time customers for their business, but hear us out. If you consider this first transaction as an investment rather than a sale, then suddenly it doesn’t seem so bizarre.
A customer’s first transaction could be your only opportunity to win their loyalty. And according to our Head of Marketing, Michaela Ward, it clearly works.“Among our clients, Stamp Me has noticed that businesses which offer customers an upfront incentive to join their loyalty program build registrations three times faster than those which don’t,” Michaela said.
Another upside to eCommerce loyalty programs is that every transaction is digital. And when every transaction is digital, it’s very easy to personalize each customer’s experience.
With every new transaction a customer makes through your online store, your business gains more data on that customer.
This offers an insight into things like:
What the customer likes
What they don’t like
When they shop
How often they shop
Whether they opt for pick-up or delivery
Whether they are more tempted by upgrades or free shipping, and so on
This process of tailoring a customer’s experience to accommodate their unique preferences is called personalization, and it’s the backbone of any decent digital loyalty program.
To gamify a process is to take an ordinary task – a driving test, exercising or even employee training – and make it fun by adding gaming components to it. When applied to loyalty programs, it can be remarkably effective. Brands like Starbucks and McDonald’s are masters of the craft.
This basically refers to any interaction a business has with its customers outside of the buying cycle. It’s important to remember that your existing customer base can support and expand your business in a whole host of ways that don’t actually involve money.
The trick is to motivate your loyalty program members to “spread the word”, so to speak, by rewarding them for:
Writing positive product/customer service reviews
Sharing prize draws and other competitions on social media
Creating their own content which promotes your brand (blogs, images, video tutorials/reviews, etc.)
By partnering up with other eCommerce businesses that share a portion of your customer base, you can get much more creative with your rewards. Airlines, hotel chains and rental car companies have been doing this for decades, in order to offer a wider range of rewards and a more comprehensive customer loyalty experience.
Have a think about potential eCommerce loyalty program partnerships that would mutually benefit both parties, and create a more enticing rewards offering for your shared customers.
Speak to us about our eCommerce loyalty program solutions today.
At Stamp Me Loyalty Solutions, we provide custom rewards platforms and loyalty program solutions to businesses in various industries. To discuss how we can help you leverage your online business with an effective and highly engaging eCommerce loyalty program, drop us a line and a friendly member of our team will be happy to assist.