In e-commerce, solely convincing new visitors to purchase items on your site won’t cut it, but an online loyalty program just might.
To truly succeed in e-commerce, you need to rely on two customer-friendly aspects – nurturing your existing clientele and making room for new and returning customers.
The financial benefits that come with returning customers are larger than life. Namely, returning visitors are five times more likely to make a purchase on your site than new visitors, with their orders being an average of 31% larger as well.
Nevertheless, convincing customers to remain loyal to your brand can be quite difficult. According to statistics, 60% to 80% of customers who say they’re satisfied with a purchase will never return to make a second one. Yes, even when your customers are satisfied, they’ll still be on the lookout for that next great brand and product online.
It is more clear now than ever before, that maintaining a healthy clientele goes way beyond simple product satisfaction.
And that’s exactly what web-based loyalty programs provide.
What is an Online Loyalty Program?
At its core, an online loyalty program is designed to reward and incentivize consumers in purchasing from your online store.
Countless case studies indicated that rewarding returning visitors with discounts, gifts, and additional incentives is an extremely effective way to keep them coming back for more.
But it’s not enough to rely on just any online loyalty program.
In fact, only 50% of web-based loyalty program accounts are actually active.
Therefore, your program will need to be well-designed and purposed to achieve the desired effect.
Customer loyalty and rewards programs are offered from a variety of sources and use a variety of systems, from points earning systems to a rewards program API. Perks can include anything from discounts, coupons, and free shipping, to VIP services, personalized merchandise, and exclusive offers. Developers can add rewards programs to their apps using Application Programming Interfaces or rewards program APIs.
In this guide, we’ll review a range of tips for designing your own customer loyalty program software, and share real-world examples to inspire you in creating the ultimate web-based loyalty program for any popular e-commerce platform.
Designing a VIP Online Loyalty Program
The most common structure for a customer loyalty program software is its points system.
Simply, each time a customer performs a certain action, they receive points for it.
Over time, a customer loyalty program software will allow your customers to accumulate enough points to redeem for rewards. Small rewards, such as free shipping or a $5 coupon, won’t require many points, whereas larger rewards will require more.
Of course, there are many variations of this system, as well as entirely different systems you can fit into your program. In addition to the design, there are a few other aspects of your loyalty program you’ll need to address.
Let’s take a look at the tips to optimizing your customer loyalty program software.
1. Promote & Brand Your Loyalty Program
Introducing customers to your loyalty program is a crucial step in making it effective.
The aspects to consider in this case include customizing your homepage, banner, and checkout page, and promoting your brand off-site through newsletters, social media posts, and group engagement.
The key goal of an online loyalty program is getting customers to remember to use your service rather than search for other online options. This makes huge sense in terms of customizing your loyalty program and introducing recognizable brand design elements.
2. Make Your Program Easy to Use
It’s simple – the easier your program is to use, the more people will use it.
Your point system should make sense on an intuitive level (i.e. awarding a point on the dollar is always easy to follow).
At the same time, it is important that you don’t give more rewards than planned or make the rewards difficult to obtain. Think back to the benefits of web-based loyalty programs mentioned above. This isn’t a giveaway — it’s a smart investment that gives to all.
3. Easy-to-Redeem Rewards & Multiplier Tiers
Customers earning enough points to obtain rewards must be a simple process.
Surprising your customer base with excessive restrictions or ineffective rewards will only leave them frustrated and urge them to abandon purchasing from your site.
Some of the most effective web-based loyalty programs combine points using a tier system, thus offering a faster way for paying customers to acquire points.
For example, an online loyalty program that we’ve reviewed offers one point for every dollar spent – to users holding 1 to 499 points. At the same time, it rewards 1.5 points for every dollar spent – to users holding 500 to 1,499 points; or 2 points for every dollar spent – to users with more than 1,500 points. Needless to say, such a dynamic will easily encourage customers to use your program, trusting both your products and rewards.
4. Relevant Messages & Program Fee Changes
Once someone has signed up to your loyalty program, remind them how it all works.
First and foremost, you can notify customers of your latest deals, updates, and perks. But make sure your notifications are truly helpful and relevant — 69% of consumers will close their loyalty program account if the notifications they receive are not crucial to what they’re after.
An alternative to the points system is your subscription system, which involves charging members a fee in exchange for them joining your online loyalty program. This allows you to offer more valuable rewards without losing money. The most popular version of this system is charging a regular fee for unlimited free shipping, as a favourable deal on both ends, and especially for your returning customers.
5. Rewarding More Actions & Measuring Performance
You don’t have to only award points for purchases. Valuable actions that you can incentivize with an online loyalty program include downloading your app, featuring site product reviews, and engaging through your social media accounts. These steps will turn your program into a less transactional one, something all of your customers will appreciate.
Even with all the advice given, it is unlikely that you’ll design the perfect loyalty program on your first try. After all, what works for one online store won’t necessarily work for another.
Over time, it might be necessary for you to tweak different aspects of your program, thus measuring how each variation performs and discovering what works best for your site.
Online Loyalty Programs: A Practical Example
Let’s dive into what some of these tools look like when implemented on a live store – kicking it off with Limonetik.
The Limonetik platform is an interface between payment methods and the back-office of e-merchants.
Targeted towards improving the user experience, the platform brings together payment method providers and trader marketing options. This allows customers to combine new payment methods, manage payment pages, get instant reductions and loyalty programs, and receive complementary payment by bank card.
Limonetik works by orchestrating different requests, such as authorizations, debts, cancellations, and re-crediting directly from the authorization payment method servers. The process applies appropriate monetary rules to each one and interrogates the Limonetik authorization meta-server only once, thus centralizing all responses before sending them back an overall single authorization. As a result, this improves both the accounting and financial monitoring process.
This unified account reporting facilitates the reconciliation of direct financial exchanges between payment methods and e-traders. In addition, the built-in management of accounting and financial flows simplifies the transaction execution and monitoring between sellers and buyers through a user-experience enriched marketplace.
Limonetik provides a superb user experience by keeping the user’s bearings, made possible by personalized e-trader or payment method graphics. Reward customers for their loyalty, by conditional displays of reductions depending on the context (where they come from, the amount spent, etc.).
Lastly, make purchasing simpler for consumers by allowing them to combine the payment methods they have at their disposal.
Limonetik adapts to the way your company payment methods work, so in a way, it can keep using its own internal processes and manage any new payment methods without having to make any internal changes.
The impeccable standardization of exchanges between business and trading systems allows Limonetik to accelerate the company’s setup.
Why are Online Loyalty Programs Essential for E-commerce?
For business owners, online loyalty programs can improve customer retention.
At the same time, consumers can appreciate loyalty programs as they are able to gain additional incentives as well as rewards.
Using loyalty programs as a marketing strategy supports e-commerce businesses in motivating customers’ purchases, while considerably increasing the business revenue.
Loyalty programs serve a dual function, targeting two customer groups at once.
Above all, loyalty programs encourage new clients to stick around after purchasing items, and with existing customers, loyalty programs ensure they are still honoured as valued customers and rewarded as such.
Implementing an online loyalty program is like paying a subtle homage to your current and future customers.
Essentially, a quality loyalty program lets customers know you are not only interested in earning from their purchases but also in benefiting your customers and nurturing a fruitful relationship with them all. The seeming act of goodwill will improve the way customers perceive and approach your brand and the efforts you put in to keeping them onboard.
Launching different online loyalty programs is superb for researching more on your customers’ desires. Through trials and errors, you will come across all kinds of incentives and rewards which can appeal to your consumers.
Depending on your findings, you can attach the rewards to specific products, thus increasing their sales. Or, you can even take an extra step and develop a separate product based on the concept of rewards.
Choose the Best, Choose GlueLoyalty
If you are looking to incorporate all of the above factors and get your business thriving – GlueLoyalty can help!
With our sophisticated loyalty programs and features, GlueLoyalty helps you automate your loyalty management and build a customized strategy that appeals to your customers. We also track your success rate, overall revenue, and the tips that enhance your brand’s optimization, by offering a variety of self-run rewards, coupons, and points systems – the kinds your customers love to see!