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How To Grow Your Ecommerce Brand With a Loyalty Program

February 16, 2022

Loyalty programs contribute billions of dollars of value for many retailers, airlines, hotels and other companies. Yet many ecommerce companies have yet to add a loyalty program to their repertoire.

Once you learn the benefits of a loyalty program to revenue and the bottom line, use the tips below to launch your program.

Loyalty Programs by the Numbers

Loyalty programs are an important tool when it comes to boosting your sales and keeping old customers. They are a collection of benefits, enticements, and marketing efforts that keeps the old customers coming back for more.

Some loyalty programs offer discounts for repeat purchases. In other cases, loyalty programs provide exclusive benefits, such as priority access to new products. Many companies are huge fans of loyalty programs because studies show that they can boost sales.

1. Preference for Personalized Marketing

According to eMarketer, sixty-eight percent of U.S. adults like loyalty programs that send personalized offers/discounts based on their purchase histories. The same study also found that customers prefer retailers that offer premium loyalty offers, to those that only offer discounts. Ultimately, customers who use rewards programs will spend a lot more than those who don’t.

2. High Likelihood of Repeated Purchases

Wirecard shows that over 70% of consumers are likely to make a purchase again after receiving a loyalty program reward. However, some rewards are more effective than others. According to this study, customers who receive cash back rewards and prepaid cards are more likely to buy from the same brand once again.

3. Driver of Significant Revenue

Based on information from eMarketer, fifty-one percent of Starbucks revenue is linked to its loyalty program. In 2021, Starbucks Rewards program had 24.2 million active US members, further proving the consumer impact of a highly-functioning loyalty program.

4. Improves Marketing Engagement

Loyalty program emails have up to a 55% open rate and 17% click-through rate, says research from Incentive Solutions. However, nowadays most people spend more time on their phone than on a desktop computer. Therefore, it is no wonder that more than 57% of customers would like to interact with their loyalty program via their smartphone. Investing in a mobile app might be a step in the right direction.

Introducing Loyalty Through Non-Traditional Marketing Methods

Thinking outside the box and implementing non-traditional means of marketing can help companies stand out in a sea of conformity.

A strong example is Sweetgreen, the American fast casual restaurant chain. The company has experienced massive growth after using a unique marketing approach to stand out to more consumers.

Recently, Sweetgreen underwent a complete brand overhaul and placed a stronger emphasis on brand purpose through a national marketing campaign with tennis star Naomi Osaka. The overhaul aims to reimagine fast food and shine a light on “real food”, as well as social issues like climate change and race relations. Sweetgreen also introduced a special salad bowl in collaboration with Osaka, and pledged to support The Asian American Foundation through its work around Asian American and Pacific Islander Heritage Month.

Crafting marketing strategies around issues that matter to consumers in a unique and nontraditional way is a great way to establish customer loyalty and hold on to it.

Setting Up a Loyalty Program for an Ecommerce Brand

A loyalty program is about more than just points and rewards. It’s about understanding what drives your customers to engage and make repeat purchases.

With a program like LoyaltyLion, you can use loyalty program data and insights to accelerate your marketing efforts and reward your highly engaged, highly valuable customers for purchasing and engaging. This will increase their lifetime value and contribute to a more sustainable source of revenue.

To make your loyalty program launch a success, consider the following factors:

  • Repeat purchases

Some items such as food and supplements are bought more frequently than others. Go through your sales history and see how many customers have made repeat purchases. If that number is low, you can boost it with a loyalty program.

  • Motivation

How will you encourage your customers to buy your products? You can use cash rewards, store credit, and free products. However, those are not the only options. You might also offer early access to your Black Friday sale so loyal customers get the best selection. Remember, you can also use limited-time incentives, like, for example, a special loyalty reward for purchases in November.

  • Tracking

Although a cleverly-established loyalty program can boost your sales, it doesn’t come without a price. Keep in mind that your staff members will need to manage the program. Also, tracking the results of this program is essential. It is important to see what is working and what is not on time, so you can make necessary changes. Tracking loyalty program purchases manually can be time-consuming and keep your staff members away from their other important tasks. Luckily, you can use Refersion to track loyalty program purchases through coupon codes and other means. It is important to use a system that can keep track of a high sales volume.

  • Capacity

Launching a loyalty program takes time and commitment. If your marketing team already has a lot on its plate this year, you may want to postpone launching the loyalty program to another time. In this case, make a note to revisit a loyalty program in a few months.

Integrate Your Loyalty and Affiliate Programs

Once your loyalty program is up and running, use these tips to integrate your affiliate and loyalty programs.

  • Design a Loyalty Program for Affiliates

To recruit highly-productive affiliates and keep them promoting your products/services, you can create a loyalty program specially designed for them. You can come up with specific rewards for those who drive significant orders for your brand. If you are not sure what to do, look at the loyalty programs offered by large hotel chains such as Hilton and airlines for inspiration. Highly-motivated affiliates are more likely to encourage more consumer purchases.

  • Update Affiliate Program Documentation

Next, you will need to update your affiliate program welcome package, website pages, and emails to draw attention to your next program. You may also want to update your affiliate program signup page to highlight the benefits for your affiliates.

  • Communicate the New Program to Affiliates

Send emails and consider organizing webinars for your affiliates to introduce them to the new program. You may also want to take a “VIP” approach for your high-volume affiliates. Consider calling them directly and walking them through the new program.

  • Track and Report Results

The final step is to update your reporting process. Consider adding a key performance indicator (KPI) to your monthly marketing report. This way, you can track loyalty program sales. Tracking this figure will help you tell if your loyalty program is growing over time.

Use Gamification for Growth

To further boost your loyalty program, explore using gamification techniques. In other words, add game-like elements such as points, rewards, competitive platforms, and leaderboards to your program.

Although reward programs already have these elements incorporated into their core, using this gamification technology can make your loyalty program even more effective. Games have always known to bring out a competitive side in everyone. With gamification, you can boost the activity of your affiliates, without actually forcing them to do anything. Earning points and climbing the leaderboard will keep them motivated.

Here are some strategies you can use to boost the productivity of your affiliates:

1. Create a leaderboard of your top affiliates where they can see how much revenue they have generated. This is a great way to motivate your affiliates, engage them in a friendly competition and encourage them to do better.

2. Give out badges to acknowledge activity and progress. Reward your most successful affiliates with specific badges, so they know their hard work is not going unnoticed.

3. Offer in-store currency to your most successful affiliates. You can even create a progress bar showing how close an affiliate is to earning a $50 virtual gift card based on their activity.

How to Manage a Growing Affiliate Program

With a powerful loyalty program, you can grow revenues much faster than your competitors and ensure that your old customers will keep coming back. In fact, according to the Bond loyalty report, members of popular loyalty programs are 77% more likely to pick that brand over the competition. With that said, reward programs are not just for boosting your sales, they are also convenient when it comes to keeping your affiliates motivated.

Needless to say, a cleverly-designed loyalty program can help you recruit highly-productive affiliates. But, as your affiliate and loyalty programs grow in size and complexity, it can be challenging to stay up to date. Tracking the activity of your affiliates, setting commissions, and handling payouts can become too much for your staff members to handle. It can keep them away from more important tasks.

Luckily, there is no need to track such activity manually. With Refersion you can also learn how to edit offers, detect affiliate fraud and use referral links.

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Written by

Ruthie Carey
Ruthie Carey