How to create a loyalty program in the online store?

Loyalty programs are marketing activities willingly used by various companies to build customer loyalty. Before implementing such a program, it is worth considering what would interest the audience and plan activities to enjoy customer engagement and other business benefits.

What does a loyalty program provide?

A loyalty program is based on a win-win principle, so both the store and the customer gain something. Without a doubt, it is a tool that supports the sales process. The premise of loyalty program is to increase consumer engagement over a longer period of time, which with good planning and an effective reward system provides repeat clients.

Types of loyalty programs

As the organizer of a loyalty program, you have at least several forms of rewards to choose from, and among the most popular are:

• collection of points
• amount spent
• membership

Collecting points is certainly the most popular form of loyalty program. The client receives a reward depending on the number of points. Many companies also choose to exchange points for discounts when shopping. Of course, points can be awarded for various consumer behaviors, it is up to you if this is the value of basket, the purchase of a specific product or recommending the program/product to friends. 

On the other hand, in the program depending on the spent amount, there is a minimum basket value, from which a discount is calculated. The discount can also be used on subsequent purchases. You can also offer a certain product for free as a reward.

In a membership-based loyalty program, discounts are usually given. Clients are also informed about upcoming promotions and can take advantage of them earlier than clients outside the loyalty program. In addition, the program may guarantee a longer return time or the ability to return merchandise without a receipt, as well as free delivery. A fee may be charged for such membership, which motivates participants to buy more often, according to the principle: if I pay, why shouldn’t I use it?

How to organize a good loyalty program?

A good loyalty program is not only about attractive prizes. Above all, it is the people for whom it is created, which is why it requires an action plan. Therefore, the organization of an effective loyalty program should consist of several stages:

• set a specific objective to be achieved by the program;
• determine the target group and what will motivate it to participate in the loyalty program;
• select the main action that participants will perform in order to earn rewards;
• determine the tools needed to implement the program;
• plan a reward system that will be attractive for the target group;
• communicate to clients about the benefits of joining the loyalty program;
• analyze data and results as well as draw conclusions.

Take a creative approach to creating a loyalty program in your company. Don’t just limit it to the popular collection of points. You can try to include elements that will make your program stand out, such as challenges or contests. When creating the program, focus on the target group. They are actually the ones who will benefit from the program, thus it has to be attractive for them.

Summary

Loyalty program is a tool that can contribute to the increase of profits of the online store, especially if it is implemented in a well-thought-out way. Certainly its effectiveness is increased by rewards attractive from the target group’s point of view. Do not forget to promote the program through various channels in order to let potentially interested people know about it. Of course, the effectiveness of a loyalty program should be evaluated, and the program should be changed to meet customer preferences and be attractive to them. However, it is important to remember that there are industries in which its effectiveness will be negligible. This may be the case if you sell products that consumers buy for years.