Business owners often focus only on attracting new customers. While that’s an understandable tactic to grow your customer base, it can mean you’re missing a lucrative business opportunity. Loyalty programmes have always been popular for driving long-term retention, strong customer relationships and repeat purchases. 

A 2016 study found that loyalty programme members generated 12-18% more revenue than non-loyalty customers. Meanwhile, this research data shows consumers are actively seeking loyalty programmes – some choose companies that offer loyalty rewards over those with no incentives.

Retaining existing customers will also cost you at least five times less than acquiring new ones, and loyal customers on average spend 67% more. For online retailers, where the competition is endless and there’s no in-store experience to rely on for connection, building loyalty is essential.

Here’s how to create your loyalty programme.

Find a structure that works for your business

The first step is to decide on a loyalty scheme that’s right for your brand. There are several types of loyalty programme, each with its pros and cons. Like any marketing tactic, the best option will be the one that gets you closest to your end goal.

Reward points

Points programmes are all about acquisition – getting lots of people to sign up. The more consumers spend, the more points they collect. These points can then be redeemed for vouchers or used to access special discount codes.

Cash-back

Cash-back loyalty programmes reward consumers for spending a certain amount. For example, a member might spend $250 in one transaction, and receive a $25 reward to use on the next purchase.

Spend-and-save discounts

Unlike cash-back, spend-and-save promotions often happen periodically, encouraging customers to spend more to save more, e.g. save $100 when they spend over $300.

Threshold or tiered programmes

This type of reward programme is based on members hitting defined milestones or crossing a threshold of spend – and helps to increase engagement by adding a layer of exclusivity. With each new tier comes more and better benefits.

Max Shop uses a tiered reward programme based on total spend in the last 12 months. If customers spend $500 in a year, they earn $1 per $20 spent. More than $500 and it’s $2 per $20 spent.

Don’t just reward for purchases

Only rewarding customers for their purchases might seem like an easy way to tick the loyalty programme box, but you’re inadvertently telling them that you only value them when they spend money.

That’s why it’s important to think outside the box and reward for all types of actions, including when customers don’t spend any money at all.

Here are some ways to integrate non-purchase actions into your loyalty programme:

• Birthday rewards: Give members a small voucher they can use within 30 days or a free item to celebrate their turning another year older. At Starbucks, customers get a free drink on their birthday.
• Anniversary rewards: To thank customers for their continued loyalty, reward them on the anniversary of joining your loyalty programme.
• VIP sales and discounts: Invite loyalty members to attend sale events and discount days – and add an incentive just for them. For example, offer an additional discount on sale items for a limited time.
• Sales previews: Give members access to sale events and discount days before anyone else.
• Reward referrals: Encourage your customers to spread the love by forwarding a discount code to a friend. If the friend makes a purchase, your customer gets rewarded too.
• Special points days: Award double or triple points on purchases at certain times of the year.
• First online purchase: Looking to drive more online sales? Give customers a $10 voucher to spend on their first online purchase when they sign up to your loyalty programme. When customers join the Running Bare Squad, they also get birthday rewards, access to sales alerts and exclusive offers.
• Write a review or follow on social media: Customer feedback – good or bad – provides an opportunity to improve, so encourage customers to connect with you online and share their thoughts. Rewarding that kind of engagement is essential for expanding your reach.

Many companies use a combination of purchase and non-purchase actions to reward their customers – finding a balance between acquisition and retention. For example, Lancôme uses a tiered, reward points programme and adds value by offering early access to products, invitations to Lancôme parties and events and extra points for social media shares.

Make it easy for your customers to earn rewards – and redeem

Make sure your chosen loyalty programme is tightly integrated so customers can seamlessly redeem their rewards online or in-store. For the customer, redemption needs to be just as easy as earning points or rewards – and the loyalty process should be clearly communicated.

That might be including points balances in your weekly eDMs, displaying rewards when clients checkout or a dedicated section in the My Accounts area to keep customers in the loop.

The big benefits of loyalty programmes

Now more than ever, customers are shopping online and they’re looking to get as much as they can out of the brands that they love. It’s the perfect opportunity for your e-commerce store to get innovative and create a stellar loyalty programme that rewards your customers – and your business – many times over.

We can help you implement a seamless online loyalty programme that is easy for your customers to use – and helps boost your sales. Get in touch with the Solutionists team today.