How To Build a Customer Loyalty Program For eCommerce Store?

Recently, finding new customers has gotten more difficult, especially in markets with fierce competition like e-commerce. It has market potential. So, how do you entice clients to return to your business? through putting into practice strategic theories of consumer retention, such as brand loyalty programmes. Businesses gain from customer loyalty programmes in several ways. These programmes increase brand loyalty while retaining your clients’ interest. These programmes are advantageous to both the customer and the store owners.

Loyal customers are beneficial in the long run regardless of the type of business. Customer loyalty is critical for any business. According to one theory, 20% of current customers generate 80% of your future profits because they are loyal and always end up buying more from your store. To begin, let us define customer loyalty.

What is customer loyalty?

Simply put, loyal customers have a positive and profitable relationship with the business. Customer loyalty reflects a willingness to return to the same store owner and provide valuable feedback and suggestions for improving the product experience. Customers who are loyal to your brand are unlikely to switch to competitors for reasons such as price, availability, or after-sales service. These customers are easy to cross-sell and upsell because they are familiar with the brand’s products and are willing to try new products from the same brand.

These are your brand’s most valuable customers. They may not purchase frequently, but their overall lifetime customer value (backlink) is greater. Customers who are loyal to your brand act as brand ambassadors. They provide you with honest feedback and reviews, and they occasionally recommend your products to their friends and family. Offering premium products, offers, and services increases customer loyalty.  

Why is customer loyalty important?

Customer retention is critical regardless of your business type because these loyal customers contribute the majority of your revenue. The customer loyalty programme is essential for three reasons

  1. Retaining existing customers cuts down acquisition cost

First-time customers are difficult to retain because they have not yet experienced your products or services and are unaware of your product’s quality. To stay at the top of your customers’ minds, you must spend more money on marketing and selling.

While loyal customers have already been introduced to your products and are aware of their quality, they are easy to retain and no additional expenses are incurred.

2. Repeat customers generates more revenue

Loyal customers are already aware of your products and continue to purchase from your website. According to studies, the top 10% of your customers can pay three times as much as the average customer, and the top 1% of customers can pay five times as much. As a result, it is always better for business to retain customers in order to generate revenue. A 5% increase in customer retention can boost your company’s profits from 25% to 95%, which is enormous!

3. Customers loyalty spread the magic of word of mouth

Customers who are pleased with your website will undoubtedly recommend it to their friends and family. According to a referral SaaSquatch study, referral customers are 16% more likely to purchase than non-referral customers. Customer loyalty is essential in all aspects of your business. Loyal customers not only buy more of your products, but they also recommend them to others. This is known as word marketing magic.

6 easy steps for developing an effective customer loyalty program

  1. Study the demographics of your audience

Knowing what your customers want by analysing various demographics of your customers, such as how much a customer buys in a year on average, what types of products they are most interested in, how frequently they purchase, and how long they have been your customers. These demographics will help you determine how effective your programme will be. Creating a customer loyalty programme is similar to creating a lifestyle club, but first you must consider what amenities your club members require.

2. Prepare your loyalty program

Before implementing a customer loyalty programme, you must first determine your customers’ level of satisfaction through effective techniques such as surveys, interviews, questionnaires, monitoring customer feedback, and so on.
By identifying your loyal customers, these effective techniques will broaden your mind. After that, examine your employees to see who has good communication skills and who knows how to deal with customers. Customers who buy frequently from your site are the most likely target of your programme. We would advise you to examine the average purchase cycle, and if it is longer than three years, this type of programme is generally not recommended.

3. Set goals and measure them with a good CRM software

Set your program’s goals from the start. For example, if your customers buy 5 times per year on average, your target should be 7 to 8 times. This will result in a 20% increase in sales and increased revenue. These objectives can be measured using simple CRM software.
Set a budget

4. Set a budget

Set a budget for your loyalty programme and keep it separate from new customer acquisition. You can get an idea of your budget by analysing the average budget in the industry and the growth they have achieved as a result. If you want an above-average return, increase your budget accordingly.

5. Decide your target audience

Classify your customers based on their demographics. Evaluate them based on their purchase volume, willingness to buy more products, payment speed and mode, customer loyalty over time, and customer profitability.
Choose the tactics that will encourage your client loyalty

6. Choose the tactics that will encourage your client loyalty

Choose loyalty-boosting tactics that are related to the customer’s purchase while also maintaining the quality of the customer relationship. Here are some examples of loyalty-boosting strategies:

  • Monthly visits from a sales representative
  • Giving offers, discounts, free delivery, or some excitement goodies to your customers
  • Exclusive membership events
  • Premium service
  • 24/7 customer support
  • Additional discount when a customer reaches a specific milestone in making purchases
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Customer loyalty is critical for reaching new heights in business growth. Here’s an added bonus: as you know, there are two types of buyers: those who search and those who simply browse your website. Those who are looking can be your potential target, and you should always try to keep them by displaying the products that they are looking for. You can accomplish this by utilising smart tools such as Wizzy, which uses cutting-edge technologies such as AI and ML to display the exact products that your customers are looking for. Using this strategy, you can easily increase customer loyalty.

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