How to Increase Sales with a Customer Loyalty Program

Most of us are probably carrying around a few well-intentioned, half stamped loyalty cards for a free cup of coffee in our wallets, but loyalty schemes can work really well online. We take a look at how e-commerce brands can improve on this model to significantly increase sales.

What is a loyalty program?

Loyalty programs have been around for many years as a marketing strategy, but have transformed for the new digital era. When you introduce a loyalty program to your website, you encourage your customers to sign up for an account and earn points, which can then be exchanged for discounts on future purchases or other rewards of your choosing.

The central idea of a loyalty program is to look after your existing customer base so that they keep coming back for more, rather than simply focusing on attracting new, one-off purchases. In other words, playing the field is all well and good, but make sure to appreciate what you already have!

Building brand loyalty is essential

There’s a wealth of competition in the eCommerce market, so turning customers loyal to your brand should be a top priority. 

Loyal customers will return to your brand time and again, giving you a more reliable income stream. As the past year and a half have shown, a loyal customer base can even keep you afloat in even the most challenging times!

Your loyal followers will also help to market your business, even just by telling everyone how much they love your brand. If someone tells you they bought something from this place and they liked it, great, maybe you’ll check it out sometime. If someone tells you they’ve been going exclusively to that same retailer for the past 5 years, the intrigue is too much to take, you’re going!

Do loyalty programs increase sales?

The benefits you’ll see from your loyalty program depends on what you’re offering. A standard discount might give you the edge over another brand for that next pair of jeans, or points-based loyalty programs that offer increasing benefits for your most devoted customers may encourage them to spend more to reap the benefits.

Here are some stats to prove it:

  • Previous customers are nine times more likely to shop with you than new customers.
  • Existing customers spend on average 31% more than new customers.
  • 75% of customers polled admitted they favoured brands offering loyalty and reward programs.

What loyalty rewards can you offer?

You really can get creative with your loyalty program, but the first thing you need to identify is what rewards your customers would value, not just ‘customers’ in general. Next, you need to identify what you can realistically afford to offer without going bust (but be generous, your business wouldn’t exist without your customers).

Some rewards you may consider offering loyal customers:

  • Discounts
  • Freebies or giveaways
  • Benefits such as discounts with an affiliated partner company

We created an online loyalty points scheme for our awesome client Heistercamp – champions of quality who sell handmade leather belts and guitar straps. The program allows you to collect 1 loyalty point for every £1 you spend! 

Another site championing loyalty schemes belongs to nutrition brand That Protein. They have a great program that rewards different actions with a different number of points – it’s simple, straightforward and encourages customers to keep coming back for more! 

Earn 10 points for every £1 you spend and 100 points for creating an account. You can then exchange 500 points for a £5 voucher and 1000 points for a £10 voucher. Who could resist?

Evaluating loyalty and redeeming rewards

How you evaluate loyalty is up to you. It may be that once someone has made one purchase and signed up with their email you offer them your rewards from then on. 

You could also consider a points-based system that rewards points each time a purchase is made, which can either be redeemed for the rewards or access to a higher ‘tier’ of loyalty, which unlocks further rewards.

You can also offer rewards for genuine feedback – don’t think of this as trying to buy a positive review, think of it as a way to engage with your customers and genuinely improve.

If you do opt for a points-based or tiered system, then you should make it as easy as possible to redeem the points. This could mean automatically applying discounts for members as soon as they log in, or an option to ‘redeem rewards’ or ‘apply points’ at checkout.

Don’t neglect your UX

While customer loyalty programs are great, they might not be enough to retain your clients if your site is a nightmare to use. If a site is filled with popups, the navigation sucks, or long checkout forms are required even on the 100th visit, customers will just go elsewhere.

Make sure all the following apply to your site before you implement a customer loyalty program:

  • Your site looks professional, inviting, and on-brand
  • Navigation is easy and intuitive
  • The checkout process is streamlined, especially for return customers
  • Account creation is easy and doesn’t request unnecessary data
  • All account functions are straightforward (order history, returns etc)
  • There are multiple delivery options
  • The returns policy is fair
  • Multiple payment methods are accepted
  • The site is secured by an SSL certificate
  • You have a great product offering

Getting customers to be loyal to a brand that doesn’t tick all of the above boxes isn’t fair to anybody.

Want to set yourself apart from your competitors? Have a crack at adding a customer loyalty program to your site by dropping our team a message! 

If you want to have a crack at a customer loyalty program on your site, or you’re looking to make any other improvements, drop our team a message and we will get back to you with how we can help!