It’s no secret that loyalty programs are a vital part of brick-and-mortar businesses. With the rise of e-commerce businesses, it’s essential to consider if they should also be offered to online shoppers. There are various loyalty programs you can provide as an e-commerce business, and below is a list of some of them that have been beneficial to other companies.

A loyalty program is a type of program that businesses use to reward their customers for their continued support (through shopping and other means). It can be used in various industries, such as in restaurants, retail stores, and breweries. According to studies, loyal customers cost companies less than new customers. In other words, it is financially beneficial to maintain a healthy and loyal customer base

The Benefit of Returning Customers

Despite the importance of new customers, new e-commerce customers still only account for around forty percent of their overall profits. The majority of the revenue that an e-commerce company generates comes from its existing customers. These individuals already know and love the company’s products and services. They can help expand the e-commerce business’s reach by recommending it to their friends and family.

Boosting Retention

Rewarding existing customers for their purchases is a popular strategy. According to a survey, over 80% of loyal shoppers to a company are more likely to be satisfied when they have a loyalty program. Additionally, studies have shown that customers are more likely to convert when they receive rewards through a loyalty program.

Companies with loyalty programs are more likely to find and keep loyal customers. Furthermore, customers are more likely to stay with the company as they earn higher points.

Utilizing a Rewards Program

There are several different options for establishing a rewards program for your company. The trick is deciding which appeals to your target audience (your customer base). One of the most critical factors you should consider when establishing a rewards program is the type of reward that will motivate your customers to continue supporting the brand. Next, consider the cost of implementing it. This will allow you to determine if giving away all your rewards will be profitable.

Different potential reward structures include points-based, subscription-based, tier-based, free perks, and cashback loyalty programs.