How To Start A Loyalty Program That Generates Loyal Customers?

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If there are no people visiting your online store, it is impossible for you to generate conversions.

If we remember that acquiring new customers usually costs more than keeping current ones, it is important to focus on what they are buying. This is known as retention marketing.

In this post, we are going to find out how to register a loyalty program for your online store, giving your customers a reason to continue buying from you.

How to register a loyalty program?

Before learning how to start a loyalty program, we want to make one thing clear. You do not need to start building a program from scratch. There are many pre-established solutions available in our App store.

Step 1. Decide what your reward points will be used for?

We are all familiar with the basics of a loyalty program. You buy something and you get points for that action. When you earn enough points, you get something as a reward.

Electronic commerce has opened different possibilities to create loyalty programs to integrate into your business. Now you can reward your customers for more actions, aside from purchases.

Obviously, you are going to want to reward your customers for making purchases, but here are some other actions you can reward them for:

  • Account records
  • Purchases
  • References
  • birthday
  • Likes on Facebook.
  • Instagram Followers

But what you really want to know is why you should use some of the above actions. Let’s look at each one to better understand the opportunities they offer.

Account records

Account registrations are good to reward because they are high value stocks. This allows your customers to have a much faster payment process in the future. Most importantly, after they sign up, you will be able to (responsibly) use their information for email marketing opportunities.

References

A loyalty program is an excellent retention tool, which also provides some opportunities to acquire new customers. When you give points for referrals, you are increasing the level of engagement of your existing customers, in addition to turning someone into a brand ambassador.

A referral is a great thing. Nielsen considers it one of the most trusted forms of advertising. When you give your customers a small incentive to mention the brand to their friends, your buyers will be more than happy to do so.

The best part is that you do not have to give points until the referred person makes a purchase. This means that you can determine to give the points when the new customer makes a purchase of a certain amount, necessarily creating a sale for you. Surely the client will promote the purchase of his friend since this will be the only way to obtain the benefit.

birthday

Birthdays are great opportunities to take advantage of. You feel like everyone treats you differently that day. If you give your customer points as a gift, they may be able to spend some money earned from other gifts on you.

New followers on social networks

Having social accounts with quality followers is essential in e-commerce. You are creating an audience, but you are also sharing a shopping channel with them. The social commerce is here and need you on board.

You can increase your followers by giving your customers points when they connect to one of your social media accounts.

Likes on Facebook are especially valuable if you are adopting a content strategy that includes a YouTube channel or company blog. Your Facebook page acts as a distribution channel for new content, sharing it with your customers immediately.

If your store is with shopify loyalty program, all these options are available.

Step 2: Give your program a name and points.

When you are creating your loyalty program, this step is often forgotten. The point is that such a program performs best when it has a unique and easily identifiable name.

If you just call them points, they can look boring or unimportant. Come up with an interesting name that your shoppers can recognize and are interested and excited about.

Step 3: Decide the value of each point.

Points should be like money to spend on your store, so be sure to communicate what their value is. the points will have 1% value by default.

Every $ 1 spent will earn the customer one point. They can redeem 500 points for $ 5 off their next purchase. This means that each point is worth 1 cent, creating a 1% loyalty program.

The value of your points is also known as the refund value. If you are going to change the repayment value in the beginning, it is worth investigating how to do it right.

If you do not have at least the data of a whole year of performance, we advise to keep things as they are and continue according to the behavior of your audience. If you have the data to support a change, you can read about more advanced strategies.

Step 4: How many points should you give away.

Now that you have decided what your points are worth, you need to state the number of points you are going to give for each share.

While logic mentions that the points provided are in relation to the action that the customer did in your store, in the business world you do not always have access to the data that helps you understand the value of each action that the audience performed.

To decide how many points to provide for a share, you need to decide the value of each share to your business.

For example, if you give your clients $ 5 worth of points for a signup, consider that $ 5 as an investment in the client. If that $ 5 is enough to convince the customer to provide you with their email to make the purchase process easier, then it was worth the investment.

And when you show the true value of your points, you are dramatically increasing the chances that they will make a purchase at your business again.

This initial investment provides instant benefits, like building your mailing list and encouraging your customers to make a purchase. It also provides long-term benefits as you are now actively encouraging that customer to return, increasing their lifetime value.

References are another of the high value activities for your store. Getting your customers to get you another customer is valuable, so these points basically make your customers become sellers in your store. Apart from that, you can provide your new customers with some incentives to make a purchase. For example, you can offer them a 10% discount on their first purchase. 

Actions like points on your birthday are less valuable to the business, so you probably want to assign a lower reward.

Social media following allows you to keep your product and brand in front of your potential customers, but it does not provide immediate value to your store. You need to provide the necessary and sufficient points to your customers to inspire them to do something in your store, without affecting your finances.

Step 5: Create a page where you explain everything about your loyalty program.

Create a page that shows each point related to your loyalty program, such as what it is called, what actions generate a reward, how many points are awarded and how you can redeem them.

Include this page in your navigation menu, and make it act as a constant reminder to your customers. The more visible your program is, the more effective it will be. You’re not going to make a sale if you can’t get your customer interested, so try a loyalty program.