Truthfully, we all want a loyal customer base; it’s a universal business goal, after all. However, loyalty can be a complex topic and there are a lot of parts to building a successful loyalty program, and it can get a little technical to set up your own program in your ecommerce. In this blog post, we’ll explain to you what customer loyalty programs are, why they’re so important, and also give you a few stellar examples to inspire you.
What is customer loyalty?
Loyalty is best defined by three equal parts; relatability, trust and attachment. We consider these precursors to a successful loyalty program.
- Relatability: Our journey starts once we find our dedicated customer base; these are the sort of customers that truly appreciate what we have to offer.
- Trust: Once we’ve found our core demographic, that’s when we can start building rapport. Trust is a powerful motivator and an important part of loyalty.
- Attachment: Quality is another important intrinsic value that drives customers to return. You should strive to leave a lasting impression. Think wow factor.
When you manage to demonstrate these three elements, you will have perfect conditions for a loyalty program. These things will make it much easier to persuade shoppers with loyalty rewards.
What are loyalty programs?
Loyalty is about real value, and loyalty apps are the tools we use to manage our programs. Collecting loyal customers is a marketing strategy we use to attract and retain customers for the long run. We use apps to elevate the traditional customer experience, making our store more interactive.
Loyalty programs use elements like exclusivity, status or simple rewards to communicate additional value. If you’re successful in creating a loyalty program, it can keep you relevant and give customers a reason to continue shopping at your store. This could play a major part when customers consider their options, making your store more competitive.
Why do we need loyalty programs?
Customers are growing more demanding and, as markets evolve over time, customers gain more power. Modern retail is all about the customer's wants and needs. Businesses are being forced to find new ways to compete, and a loyalty program is what many consider their first and best option.
Cultivating a warm and lasting impression could mean customers are comfortable with your business, and that could make a major difference. If your ecommerce business struggles to convert traffic or does poorly in generating repeat shoppers, then a loyalty program could be the difference you need.
We know that the costs of acquiring new customers are rising due to market competition, and many also find that they lack control over their ecommerce store. Loyalty programs deliver a major improvement in functionality, offering new ways of encouraging customers and creating incentive. One of the best features of loyalty program apps has to be their ability to award points and discounts to shoppers. This creates a strong motivation for them to interact with your store.
Shoppers commonly use the term “transactional experience” to describe the feeling they get when shopping at some stores. As customer expectations grow, we are forced to compete on levels that transcend the deliverable product alone. The ecommerce industry is growing more competitive over time and it's becoming more important to focus on maximizing each customer's value.
Figures behind loyalty programs
We know that, when we combine ecommerce with a brick-and-mortar business, we are tapping into a new customer base. Figures suggest hybrid businesses owe on average 30% of their total revenue to sales generated online. Advanced tools like loyalty programs have grown popular due to their visible impact on ecommerce performance.
Here are some statistics that highlight the benefits of loyalty programs to your ecommerce metrics and performance:
- Increased customer engagement: According to a report by Bond Brand Loyalty, 82% of customers participate in loyalty programs because they want to be rewarded for their purchases.
- Increased customer lifetime value: A study by McKinsey & Company found that customers who are part of a loyalty program have a 30% higher lifetime value compared to those who are not.
- Increased customer retention: Research by the Loyalty Research Center found that loyal customers are five times more likely to repurchase from a brand and four times more likely to refer others to the brand.
- Increased sales: A study by Forrester Research found that customers who are part of a loyalty program spend an average of 12-18% more compared to those who are not.
- Cost-effective acquisition: According to a report by Colloquy, it costs five to twenty-five times more to acquire a new customer compared to retaining an existing one. Loyalty programs help to retain existing customers, making them a cost-effective way to acquire new customers through referrals and word-of-mouth.
These statistics demonstrate the potential for loyalty programs to drive customer engagement, increase customer lifetime value and drive sales. By offering rewards and incentives, e-businesses can build stronger relationships with their customers and drive long-term success.
Five creative examples of customer loyalty programs
Let's take a look at some of the most successful customer loyalty programs for inspiration. We will summarize why each program is so successful and identify some elements that you can implement in your own ecommerce store.
One of the cleanest, sweetest deals around is the Black Card by BOXRAW. It's stylish, desirable and really well-built, as it combines multiple elements into what can only be described as a complete loyalty program.
Why we love it:
- Their visuals are stunning
- Their widget is flawless
- They their program is loaded with perks
- They program is simple to use and well explained
They feature a collapsable card that falls seamlessly onto your page. This lets shoppers have a quick and easy way to access their benefits without having to leave the page, which improves the page's overall functionality and user experience.
Just like in most competitions we use precious metals to define classes, this fitness brand successfully relates to the culture. BOXRAW recognizes their customer base and these small things really add up. And the sound of “Black Card” is low-key awesome. Besides the clever design elements, their tiers are loaded with perks and the rewards are desirable. Just another reason why the Black Card is one of our top picks.
Clear and instructive
The way that BOXRAW explains the process and demonstrates the benefits is outstanding. They make their program clear and simple. They managed to explain it well and were stylish in their design and layout; style is an important element to help with branding and cultivate a positive impression.
Remember: The clearer your message is, the easier it is for your customer to understand it. If there is real value to your loyalty program, wouldn’t you want to make the benefits crystal clear?
Progress bar and free points
BOXRAW offers hundreds of points before you even make your first purchase and tracks your milestones until your next upgrade. You can easily tell where your progress meter rests and the sort of perk you will receive at each stage. Another reason why the Black Card is a hit in terms of customer appeal.
Complete FAQ section
BOXRAW tops it off with a complete FAQ section for their loyalty program, thinking ahead of the curve. Apart from the benefit it offers the customer, an FAQ section can alleviate the number of inquiries sent to your customer service.
2. Massimo Dutti
Massimo Dutti is a big stand-out. Feel provides a one-of-a-kind experience; a memorable and deeply sensational loyalty program. There is a sense of excellence and a strong connection between loyal shoppers and the product. They focus on sensation and exclusivity as the foundation of their program.
Why we love it:
- They create a sensual experience
- They provide a first-class invitation
- They offer unique rewards
- They focus on exclusivity
This particular program is definitely non-traditional, but it serves as an amazing example of creativity at play, with a promise of exclusivity and first-class service. They also provide all their members with early access to discounts, limited-edition items, personalized in-store appointments and special access to events. Instead of offering the traditional discount, they have managed to draw customers in with a feeling, hence the name of the customer loyalty program, Feel.
Special treatment and exclusivity
For a luxury brand, customers have different expectations. They have the money, so what they want isn't discounts but exclusivity and special treatment. Massimo Dutti successfully identified the particular preferences of their clientele. Although their program is not as interactive as other loyalty programs on this list, they’ve created value in ways no other brand has.
H&M is a major global brand with a huge customer base, but it’s not so simple for them. There's a lot of competition for any clothing brand, and one of the keys to success is customer loyalty. It’s obvious why H&M puts so much effort into their customer loyalty program. There are numerous special touches that H&M uses that elevate their program to another level.
Why we love it:
- They treat their loyalty members with special perks
- They made it rewarding to enroll with a first-purchase reward
- They have a mobile app, a major factor
- They wisely use their loyalty program to meet their goals
Awesome shopping experience
H&M is already a household brand, and this loyalty program is low-impact and all benefits. They used a few clever tricks to make the program work for their business, making the online shopping experience as good, if not better, than the in-person experience. Not only are the perks of membership worthwhile, but it also isn’t very difficult to acquire a Plus Membership. Is the H&M loyalty program worth it? Yes! 10/10.
It makes customers feel special
Shoppers in general love exclusivity, limited editions and discounts that aren't just limited-time offers for all shoppers. Programs that offer this sort of elevated experience go above and beyond your average loyalty program. It's a meaningful treat for dedicated shoppers, thus making it the Plus membership worthwhile. This goes down as one of those programs that are really about loyalty members.
Another major feature of the H&M customer loyalty program is the Mobile App. Customers adore an easy shopping experience, and there's nothing more convenient and smooth than mobile apps. Overall, this is a program worth checking out for inspiration.
Lululemon is riding their popularity and finding new ways to reward their loyal shoppers. They’ve introduced benefits that go beyond ordinary discounts, like studio access and workout routines. That’s some progressive thinking! Keeping active is how they keep their customers coming back. Lifestyle seems to be a great way to create loyalty.
Why we love it:
- Lululemon gives off a vibe that they actually care
- They extend their product beyond just the transaction
- They offer out-of-the-box perks for members
- Their benefits are highly desirable
Think about lifestyle
Generally, we see stores set up loyalty programs for an extra bit of cash flow. It doesn’t seem this way for Lululemon. I think the real difference is the intention of the product. They clearly focus more on the lifestyle of their customers instead of pushing an extra sale. You get this vibe from the way they support workouts and provide wellness content, engaging in a content marketing strategy that truly benefits their customers. Clearly there is a bigger picture at play. Seems like a smart plan!
Mango has soul, and they’ve successfully given a unique spin to the classical customer loyalty programs. Nothing is ordinary about this program. It gives off a humane and caring impression, true to the meaning of real loyalty.
Why we love it:
- They have the most unique rewards on this list; donations to non-governmental organizations (NGOs), free music, and cinema tickets.
- The first brand we’ve found that puts sustainability first, taking green marketing seriously. You can collect points by recycling old clothing, for instance.
- They successfully made a warm and inviting customer loyalty program.
There is a clear difference when it comes to Mango’s loyalty program. How many customer loyalty programs out there give off this sort of impression? Their creativity makes their program an excellent example of how to portray your brand.
Is Lily the right loyalty program for your Shopplazza store?
Lily can transform your store with a bundle of awesome features:
- An interactive pop-up tab with custom branding
- Advanced analytics to closely monitor your program
- Multiple options for rewarding points with control over point values
- Reward program registrations
- Reward social media follows and shares
- Generate new leads with referrals
Customer loyalty programs: conclusion
Customer loyalty programs are powerful tools for improving your store's shopping experience. If you're struggling to increase sales, try balancing your business efforts with loyalty rewards. The ecommerce industry is only getting more competitive and, in turn, more expensive. Loyalty programs can help reduce your costs of acquiring new customers and improve customer lifetime value.