5 Tips on Maximizing Your Loyalty Program

The ultimate goal of any ecommerce business is to make money and gain loyal customers who return for repeat purchases. One way to accomplish this goal is through a retention strategy like adding a loyalty program. Loyalty programs are important because they can be used as a tool to bring customers back to your store, build a loyal following, increase customer lifetime value (CLV), and repeat purchase rates.

Based on data at Smile.io, from a sample of over 1.1 billion shoppers and 250,000 ecommerce brands, 41% of an ecommerce store’s revenue is created by only 8% of its customers, and your top 5% of customers generate 35%. This 5% is made up of your most loyal repeat customers, making it clear that repeat customers generate substantial revenue and are extremely profitable!  

A successful loyalty program aims to turn first-time customers into repeat customers and keep them engaged through rewards that can be redeemed. Here are five tips on maximizing your loyalty program to work for you and bring in revenue.

Map the Customer Journey 

It’s estimated that 71% of consumers expect companies and brands to deliver personalized interactions. And 76% get frustrated when this doesn’t happen. Global brands are creating more ways for customers to interact with their brands. One of those ways is through implementing a loyalty program. 

A loyalty program helps map a customer’s journey from their first purchase to becoming a repeat shopper. Email addresses are one piece of data you can collect through a loyalty program. Other key pieces of information you collect are how the customer interacts with your brand, certain demographic insights, and the customers’ purchasing behavior.

Capturing this type of data will map the customer journey from beginning to end. You can find out how much time passes between a first and second purchase and how your customers are returning, which can segment your audience. With this data, you can view if your customers came in through a social channel or if they were referred by another customer. This data can inform how to make important decisions on retention, increasing revenue, and building a loyal customer base. 

Maximizing your loyalty program means it’s working for you and bringing in revenue. Mapping the customer’s journey through your site will help evaluate every customer touch point to create a personalized experience. With multiple channels where a customer can view your products and check out, mapping the customer journey is key to personalizing the experience for every type of customer that comes through your store. 

Focus on Metrics and Data

One key way to ensure you are maximizing your loyalty program is to be focused on the metrics and data. Some of the key retention metrics to focus on with your loyalty program are repeat purchase rates, customer churn rate, and repeat purchase probability.

Utilizing the first-party data you collect through your loyalty program, you can measure and analyze your retention metrics. The repeat purchase probability is the likelihood of a customer making another purchase. Keeping an eye on this metric allows you to assess where customers are falling off throughout the customer journey, allowing you to put preventative measures in place. 

Another key metric to view is your customer churn rate. Knowing how many customers are returning for a second purchase is important to determine if your current strategy is working. The customer churn rate is the percentage of customers who stop doing business with a company over a specified period. Knowing this percentage allows you to strategize and experiment with different retention strategies for your ecommerce business. You can also connect the customer churn rate with your data on cart abandonment emails and view everything from a larger perspective. 

Jaxxon and Littledata

Having a complete and total view of your Shopify data can help fill in gaps that are not filled without another analytics app. Having additional channels tracked with server-side tracking gives ecommerce brands transparency and confidence their data is being tracked, and accurate conversions are taking place. Men’s jewelry brand Jaxxon worked with Littledata to implement a complete view into its data, which worked seamlessly with Google Analytics 4 and Facebook Ad Manager. Jaxxon saw 89% more purchase conversions reported in Meta’s Facebook Ad Manager from Littledata’s server-side tracking. 

Explainer Pages are Key 

Build explainer pages that answer all the questions a customer might have about your loyalty program to get the most out of your customer loyalty experience. Explainer pages are a key component of a successful loyalty program. They signify to your customers that you care by creating a place where they can get all their questions answered. The more visual, the better. 

An effective explainer page should excite customers about the program’s benefits, explain how the program works, and how to participate. Ultimately, it should be a place that convinces the customer to participate.

A few tips to make your explainer page more action-oriented is to make it easy to understand. Depending on the industry your ecommerce business is in, you want to make sure your customer leaves with no doubt your loyalty program brings value to their shopping experience. Ensure you have a clear call-to-action (CTA) that makes customers want to join your program. Finally, make your explainer page easy to find within your ecommerce site—whether it’s a link in the footer or the top of your site in your main navigation. 

Omnichannel Approach and Omnichannel Targeting

Your loyalty program is only effective if it’s being utilized by your customers. Creating a strong loyalty program needs commitment from brands to continuously optimize each function to figure out what works best for their audience. Each loyalty program in every industry looks and works differently. 

Creating an omnichannel approach to your business is important to create a personalized experience for shoppers. Omnichannel unites the online and offline channels of your business and offers the same customer experience on both. Omnichannel marketing will help you unify the same level of experience across any channel your customer finds you. 

For example, let’s say you have a brick-and-mortar location and an ecommerce site, offering points in-store as well as online. It is key to deliver the same uniform experience for your customers on both channels. Ensure your loyalty program is also integrated with every part of your brand. For example, Solo Stove allows customers to earn points for any purchases made in-store from a third-party retail store. When customers receive their Solo Stove item, they’ll notice a tag on their product including a QR code that they can scan to earn 100 points instantly. 

With omnichannel targeting, you can target customers no matter the device or channel they choose to shop. Through this data, you can keep an eye on which touchpoint is serving you best. Through an omnichannel approach, you also discover ways to incentivize customers to shop on any new channel you introduce. 

Provide Meaningful Rewards

The final tip for maximizing your loyalty program is to offer desirable meaningful rewards customers actually want. Customers will connect with your loyalty program and overall ecommerce brand when built off of a connection. According to Sprout Social, “When customers feel connected to brands, more than half of consumers (57%) will increase their spending with that brand and 76% will buy from them over a competitor.”

After all, if your rewards aren’t viewed as valuable, customers will not be incentivized to keep shopping with you. Offering your customers new rewards at regular intervals helps motivate them to continue participating in your loyalty program. Transactional rewards are the easiest way to do this. Whether it’s free shipping, dollars off, or a percentage off their next purchase, customers are always eager to redeem their rewards for something with clear, easy-to-measure, tangible value.

Alternatively, offering your customers the chance to redeem rewards on special perks takes your program to a whole new level. Rewarding your customers with free products, special events, and member-exclusive products simply for referring a friend or sharing on social media elevates your loyalty experience to a place that’s hard to compete with.

Ensure Your Loyalty Program Works for You

Maximize your loyalty program to ensure it works for your business. Loyalty programs are a great way to get your customers to turn into repeat customers and loyal ambassadors of your business. 

Your loyalty program is an experience by itself and part of the overall customer experience. Whether a customer is shopping online or in a physical store, how a customer feels about your brand after a purchase is an indicator of whether they will return and build loyalty with you.

Connect with Smile.io to learn more about loyalty programs that can build a brand community, and generate repeat purchases, and revenue for your business. 

Author Bio: Jonathan Roque

Jonathan Roque is the Content Marketing Manager at Smile.io. Jonathan is an expert on ecommerce and passionate about helping small and medium-sized businesses grow and maximize their potential. 

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