It is easier to sell to existing customers than to new ones: they know what you offer, and they are already interested in your product. But even if they like what you are selling, it is only natural for them to be curious about other stores too. A loyalty program is a great way to persuade your customers that the grass is always greener on your side of the fence.
A loyalty program is a way of rewarding your customers with discounts, free merchandise, coupons, or special offers. It encourages your customer to stay loyal, and there are different types of loyalty programs to choose from. Read on to find out which one suits your store best.
1. The Points Program
It is one of the simplest loyalty programs: buyers earn points for every purchase, and they translate them into rewards. It can be discounts or freebies, and the main rule here is to keep it simple.
It must be easy to calculate and use, for example, 1 point for $1/5/10 spent in your store. Points can be earned not only for purchases, but also for engagement, or visits — for instance, liking a FB page and subscribing to a newsletter.
This type of loyalty program works best for
For example: the Banana Republic card gives you 5 points for every dollar spent at Gap, Banana Republic, Old Navy, or Athleta.
Tip: the Gratisfaction app from the Ecwid App Market can help you run a points loyalty program.
2. The Tier Program
A tier system means that the size of the reward increases over time. The more a customer buys, the bigger the reward they earn.
The key to success here is to always let your customers know the benefits, their status, and how close they are to a new level (= additional reward). This way they will try to achieve a higher status, increasing the purchases.
This system works best for
For example: the Sephora Beauty Insider program gives you a variety of rewards depending on how much you spent on their products in the past year. It includes invitations to exclusive events, a private hotline, and flash
Tip: use Order Export to find out how much your customers spent last year. On your Sales list, click Export Orders and download a CSV file. You’ll be able to work with it in Google Sheets to filter customers that ordered over a certain sum from you.
When customers join this type of loyalty program, they pay a fee to get VIP membership. It frees them from obstacles that could prevent future purchases. You can offer free shipping, bigger discounts, or exclusive products.
Keep in mind that it is most effective for repeat purchases and may not be as interesting for new customers.
For example: The Amazon Prime membership provides you with free shipping and cool perks to choose from, such as access to video streaming, prime rewards, or early access to selected deals.
Tip: You can sell a VIP membership as a separate product in Ecwid.
4. The Reward Partnership
Partnerships with other brands may be beneficial both for you and your customers. It helps to expand brand reach through your partner’s audience.
With this loyalty program, you can build business relationships and offer your customer more than what your brand initially has. One option can be special
For example: The Plenti program allows customers to earn points in one store and spend in another. It has a large number of partners, but for a small business, it is fine to create a reward partnership program for customers with one or two businesses.
Tip: The easiest way to offer a discount at a partner store is via discount coupons.
This program is based on your target audience’s values and is focused on charities.
The key here is to understand your customers’ interests and values and to translate their purchase into charitable donations depending on your brand specifics.
You may support animal rights organizations, art initiatives, or educational programs. Don’t forget to keep your buyers informed on how their purchases help those funds.
For example: YLLO, a skincare brand, donates 10% of their sales to support Girls Not Brides, an organization that works to prevent child marriages.
Tip: You can set up Product Options to collect donations.
6. The Game Program
Why not entertain customers and offer them something special at the same time?
Create a loyalty program based on a game and offer your buyers gifts, discounts, or exclusive deals when they win in a game on your website. The game must be simple and easy use, and it should offer something that satisfies your customers’ interests. Stick to fair play: the odds must be at least 25%.
You can go for a Spin the Wheel game or a quiz.
For example: Simply Party Supplies decided to turn their points system into a game, making it look like a quest: the more tasks you do, the more points you get.
Tip: Use the Assistantly Wheel app to add a gamified discount wheel to your store.
7. The Cashback Program
This type of loyalty program is quite simple: customers spent $x and get a certain sum back. It helps to increase transactions, and it is easy for a customer to understand.
Note that the timing of rewards is critical here, as this type doesn’t offer instant gratification, and you need to keep customers engaged.
For example: The CVS Extra Care program allows you to get 2% back of all your purchases, and rewards are paid out four times a year. You can adjust the size and the frequency of the reward to your business.
Read more: How to Set Your Pricing Strategy
8. The Hybrid Program
It is a combination of different types of loyalty programs.
But don’t try too hard here: if you combine too many types, it may confuse your customers. Points and tier systems work well together, unlike the mix of cashback, game, and
For example: When you register for Kiehl’s Rewards, a free birthday gift is guaranteed for you, as well as a $10 reward for every $100.
9. The Ambassador Program
How about rewarding your brand fans by putting them on your ambassadors list? Give them freebies or VIP access to your services in exchange for spreading the word about your store on social media, review websites, and
For example: Ali Conway from Strange Bikinis strategically picked 15 ambassadors for her bikini brand. She features them on her blog and publishes their
10. Birthday Gifts
This one is easy: You present your buyers with gifts on their birthdays or anniversaries. It works for any business with a customer database, and if you offer a birthday gift for signing up to your subscription, it helps to build an email marketing list.
Learn more: How to Build the Best Mailing List Possible
For example: World Market doesn’t just offer you a gift for your birthday but makes it a surprise present. Quite festive, isn’t it?
How to Make It Work
Whatever format you choose for your loyalty program, follow these rules to achieve the best results:
- Keep the terms easy to understand
- Make it easy for customers to sign up for it
- Provide valuable rewards
- Motivate ongoing activity to stay in the program
- Add more value for more actions
- Constantly thank customers for participating.
How do you reward loyalty? Share in the comments what has worked well and not so well with your loyal customers.