customer loyaltyLoyalty programs are growing in popularity with ecommerce businesses. They help small businesses compete in the increasingly competitive ecommerce space, and can highlight their value over very large ecommerce sites. Business owners know that keeping existing customers is less expensive than attracting new ones. Customer loyalty programs can boost customer retention and sales. Data shows that consumers respond to loyalty programs. 77% of respondents in a 2018 study done by Bond say, “Loyalty programs make me more likely to continue doing business with brands.” And 70% say they are more likely to recommend brands with good loyalty programs. That sounds encouraging, but also begs the question: What makes a good loyalty program? The right one for your business depends on budget and the type of products or services you offer.

Types of Loyalty Apps

Customer loyalty applications reward customers for repeat purchases or other actions. Customers complete an on-line profile and sign up for the app on the business’ website. These apps give businesses valuable information about their customers, buying trends and more. Loyalty apps take many forms, including:

  • Earning points: Customers earn points for dollars spent or by buying certain products. Points are redeemable for cash back or future discounts.
  • Perks: Examples are birthday discounts, rewards for posting product reviews and recommendations, coupons for completing an activity and notices of exclusive sales.
  • Subscription discounts: Customers who buy on a regular basis get discounts on products or services.
  • Tiered loyalty benefits: Some offer tiered levels of rewards to their customers. For example, when a customer reaches a certain level of expenditure, the rewards may double, or the customer may get cash back. Customers may get free shipping after ordering a certain dollar amount. These offer customers an exclusive status level that can help attract more business.
  • Refer a Friend: If your business is one that customers need only occasionally, a Refer-A-Friend program may be more suitable. When a customer refers someone to you, you give them a cash reward or a discount on future purchases.
  • Mission driven: These programs are effective for certain products. Instead of giving monetary incentives, the business donates either money or products with each sale to a social cause.

Build Brand Awareness and Marketing Opportunities

Customer loyalty apps allow businesses to gather and track useful information for:

  • Learning which products appeal to specific customer segments.
  • Creating an email or text list of customers.
  • Sending personalized messages to customers about upcoming sales, product suggestions based on earlier purchases, advance notice of new offerings, and news about the business or events in the community.
  • Encouraging feedback and gaining insight into trends.

This information can build customer loyalty by using it in marketing tactics. For example, on-line events that highlight products or offer educational information will attract customers and let you connect with them on a personal level. On-line interviews with experts are popular events, offered exclusively to customers.

These actions are powerful tools that build brand awareness and reputation. Customers feel an emotional connection to the business, and feel the business is interested in them. A study by Bond found that 75% of consumers say loyalty programs are a meaningful part of their brand relationships. Consumers with an emotional connection to a brand have a 306% higher lifetime value than regular customers. They also stay with that brand longer, and will recommend that brand much more often (Motista).

Loyalty programs are even more important as competition grows among ecommerce businesses. They  add value to your brand by showing customers that you understand their needs and appreciate their business. Consumers want loyalty programs to be easy. They also prefer those who don’t require too much information on their profile. They want to see proof that the business is interested in them. They want personalized service and will build loyalty to businesses with shared values. Loyalty programs help create that connection with customers, building long-term relationships, trust and increased revenues.

Let Customers Know!

Be sure to let current and potential customers know about your loyalty program! Talk about it on social media and your website. Put notices about it on the order process and checkout pages, reminding customers of the benefits they’ll earn.

For help with your small business website or to discuss which loyalty app will work for your business, contact us. We design and update websites that run flawlessly.

* image used under license from Pixabay.