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How customer loyalty program boosts e-commerce

E-commerce · 5 Mins Read

How customer loyalty program boosts e-commerce

The e-commerce industry has been growing steadily over the last few years, and the pandemic further boosted this industry when restrictions and lockdowns were in place. In this digital age, sustaining a business without having an e-commerce platform is challenging. And in e-commerce, success is driven by how satisfied and loyal your customers are.

In this article, we will discuss what a customer loyalty program is, its benefits, and how you can build a strategy that will keep your customers coming back for more. 

How big is the e-commerce industry in the Philippines?

The Philippines' e-commerce industry is growing rapidly, with the e-commerce market size valued at US$4 billion in 2019, as Statista reveals. In 2022, it is expected to generate a revenue of US$20.18 billion. As the industry grows, companies have more opportunities to retain customers and boost sales. However, having a satisfied customer is not enough in today’s competitive market. 

There are more challenges such as increasing consumer expectations and similar products by other brands. As a business owner, you must navigate through these challenges and create loyal customers for yourself. The solution? Loyalty marketing programs.

What is customer loyalty in e-commerce?

A customer loyalty program is a system businesses use to reward their most frequent and valuable customers. These rewards can be in the form of exclusive offers, discounts, and promotions. Your business can stand out among the competitors through successful loyalty marketing and offering such incentives to the customers. 

To build a strong connection between the brand and the consumer, you must create programs that urge consumers to purchase your products and return for more purchases. Successful programs can comprise customer loyalty cards for businesses or rewards that they can use while making their purchases and benefit from further discounts.  

Benefits of customer loyalty programs

The benefits of implementing a customer rewards program in your e-commerce business include:

  • Increasing customer satisfaction and making them feel valued: Customers that redeem promotions and gifts from such programs report a 1.6 times increase in the level of brand satisfaction, reports Bond Brand Loyalty. Moreover, when you establish a meaningful connection with the consumers, they’ll be more willing to support you.

  • Increasing consumer retention and engagement: The same study revealed that 79% of the customers surveyed will likely stay with the brands that include them in loyalty programs. 

  • Increasing sales and revenues: Loyal customers tend to purchase more. Indeed, just a 5% increase in customer retention can increase profits by 25% to 95%, according to research by Bain & Company.

  • Attracting new customers: With new customers, you can improve and grow better based on new user information.

How to build a loyalty program strategy

There are several types of loyalty programs for small businesses which you can create. Whatever the type of program you wish to build, you must follow the following steps to ensure that you develop a successful program for new and existing customers.

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1. Identify the target audience

The first step in creating customer loyalty programs in retail is to identify the target audience and study their behavior and shopping patterns. Out of your total customer base, you must focus on a particular target group for retention and engagement. By identifying and understanding which of your target audience buys the most from you, you can focus more on investing in these groups of customers who are most likely to buy from you in the future.

2. Identify your goals

The next step is to identify the goals of your retail loyalty programs. Think of the outcomes that you wish to achieve and set a deadline to achieve this target. Agree upon the budget you will spend for the program; you do not want to offer rewards to customers by putting the business at a loss. In addition, decide on the metrics you will measure on how loyal consumers are.

3. Choose the type of program you want to build

In this step, you can choose the type of loyalty program you want to offer your customers. This can include the points and rewards system, coupon and referral program, membership program, subscription-based program, loyalty cards, and others. You can even combine the main ideas of two or more reward systems and develop a unique and innovative loyalty program strategy to stand out among the competitors. Decide how and when you plan to reward the customers, how often are they rewarded and where they can redeem their rewards. 

4. Choose the right tools to implement the program

Several tools and software are available online as plug-ins that you can integrate into your e-commerce website to automate your brand loyalty programs. Each has its specialty, pros, and cons. Choose the tools that best suit your requirements. Popular customer loyalty solutions tools include Points And Rewards For WooCommerce, Giftbit, and LoyalZoo.

5. Continuously measure customer loyalty for improvement and growth

The last step is to see if the e-commerce loyalty program successfully increases customer engagement and retention. You can measure customer loyalty through metrics such as:

  • Customer lifetime value: Estimates how much more your customers are purchasing from you throughout the course of your business relationship.

  • Net promoter score: A tool that evaluates customer satisfaction.

Customer loyalty index: A tool that tracks customer loyalty.

Best practices for e-commerce loyalty programs 

When creating customer loyalty programs for small businesses or other e-commerce businesses, follow these best practices:

  • Add your loyalty program information to your website’s homepage.
  • Use social media platforms for marketing your programs. 
  • Get consumer feedback through surveys and questionnaires to improve customer experiences. 
  • Invest in referral marketing.

How DHL Express can help your business

Besides loyalty programs, there are other ways to improve customer retention, with delivery being one of the aspects. Online shoppers nowadays not only compare products from different e-commerce stores but also shipping efforts. DHL Express is a trusted and reliable international shipping provider that can help increase your customer’s loyalty by delivering your products to them quickly and efficiently. 

By partnering with DHL Express, you can rest assured that the shipping and logistics aspect of your business will be well taken care of, giving you time to focus on increasing your sales and revenues. We offer specialized services, including customized shipping solutions, transportation, on-demand delivery, e-payment solutions, and others. Open a business account with DHL Express today to explore all these services.

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