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Loyalty programs have proven to be one of the most effective ways to increase revenue and encourage customer loyalty. 84% of consumers say they are loyal to a brand that offers a loyalty program. 66% of consumers say that the ability to earn rewards has actually changed their spending habits.

We know that it costs less to resell new customers than to acquire new ones—that’s why brands invest in loyalty and rewards programs.

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While they may be effective, customer loyalty programs are nothing new. Most points, steps, One of the social media and paid programs. That’s why some retailers are looking for new and innovative ways to shake things up and build rewards programs to encourage customer loyalty.

Customer loyalty programs reward customers who repeatedly interact with the brand. It is a customer retention strategy that encourages customers to buy your brand over competitors. The more customers buy or interact with the brand, the bigger the reward.

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In a loyalty program, companies can offer points or benefits to customers. In addition, they offer discounted, free products; Points are purchased for rewards or internal benefits. The goal is to encourage repeat purchases and build customer and business trust.

A recent Yotpo survey revealed that people will go to great lengths for their favorite brands. Nearly 68% of respondents said they would participate in a customer loyalty program for their favorite brands, and 56% said they would spend more on the brand even if there were cheaper options.

Studies have found that people want more than free shipping and discounts. They want to get early access to sales and new products.

Running a customer loyalty program means giving something away. Discounts, early bird sales etc. But the benefit of getting rewards programs is huge:

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However, not all loyalty programs are created equal. There are many types of rewards that you can use to build customer loyalty and get repeat purchases.

Now that you know how rewards programs work, let’s take a look at some of the more popular types that you can adapt to your ecommerce store.

Points programs are the most common types of rewards. They are free for customers; Refunds; It allows you to collect reward points that can be redeemed for benefits etc. Customers only earn points on purchases. They share on social networks; leaving comments; Points can be earned by celebrating birthdays or games.

Bodycare retailer Blume uses a token system called Blume Bucks in its loyalty program, called Blumetopia. Customers follow Instagram brands; You can earn Blume Bucks by ordering or telling friends about Blume.

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Customer loyalty programs are a type of membership where customers receive different benefits based on their level. Businesses often segment membership into groups based on specific metrics, such as sales or engagement.

These customer rewards programs give customers a goal. The higher their level, the more special and better rewards you get.

Bra and underwear brand ThirdLove uses a tiered system for its Hooked Rewards program. Customers sign up for the program and receive instant rewards. The more you spend on ThirdLove, the more benefits you get.

When consumers spend $250 on a brand, they become enthusiastic. This level gets many benefits such as free underwear with purchase and special seasonal offers. If customers spend more than $450 on the brand, they receive discounts on gift items and limited edition items.

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Paid loyalty or fee-based loyalty programs provide immediate and ongoing benefits to customers for the cost of participation. These costs can be recurring or one-time.

Paid programs may require proof-of-value to get sign-ups, but a business can get more customer value from members. A recent report by McKinsey shows that customers are 62% more likely to spend with a brand after participating in a paid loyalty program.

The most popular example of a paid loyalty program is Amazon Prime. It may seem like a difficult model to follow, but payment loyalty can be suitable for many different types of business.

The idea behind a value-based loyalty program is to connect with customers on a deeper level. This involves donating a percentage of sales to charitable or charitable programs. You can offer them several different charity options to choose from, or have one that really aligns with your customers’ values.

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This program does not reward users. But the reward has a special place for them because it is used to benefit the society. Brands often create integrated loyalty programs using this model.

For example, If you have 500 points. You can donate $10 to the organization. 1,000 points earns you a $20 donation.

Not sure where to start? Ask customers what they want from a rewards program. You can easily identify your customer base with a poll or survey. Then create a reward program.

Here are 7 new options for customer loyalty programs and what you can learn from each. This will give you some customer loyalty program ideas to start today.

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Designer Shoe Warehouse (or DSW) has long run a traditional VIP loyalty program that rewards every customer, with tiers of rewards unlocked as customers spend more.

Its program works smoothly. There is no member ID number or credit card number for users to remember—instead, DSW’s online system allows users to enter their name, identified by phone number or payment information.

The danger when rewards are automatic is that customers forget about the program. Customers who forget about the loyalty program are not tempted to spend more to get more. DSW needed a way to keep customers engaged in their program and remind them where they stand and what they can get by paying more at DSW stores.

In early 2017, DSW launched an email campaign aimed at reminding customers of their program. The campaign includes an email detailing the custom:

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What made the campaign successful was the conversion rate. A loyalty program like DSW’s gives the brand access to a wealth of customer information. DSW used this to its advantage (along with some reliable email) to build emails that stood out from other general marketing emails sitting in users’ inboxes.

Sephora’s Beauty Insider rewards program is popular. It has more than 25 million loyal members, and members account for nearly 80% of Sephora’s annual sales. Customers earn rewards for every purchase based on a traditional points system. The innovative part is that members can choose how to use their reward points.

One of the biggest obstacles for many Sephora customers is the price – Sephora products are not cheap. Beauty Insider members can redeem their reward points for gift cards and discounts, helping to reduce the purchase price of products without discount. Loyalty members can redeem points for exclusive products such as limited edition products or in-store beauty lessons.

By giving loyalty members the flexibility to choose, Sephora allows customers to pay for the deals and products they really want without reducing the value of their products.

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Creating mobile apps to manage loyalty programs in retailers is common now, but when Starbucks launched Starbucks Rewards through the Starbucks app, it was a new concept. Running the program through the app makes it easy for users—no cards to forget or lose. No login required

To earn loyalty points (or in the case of Starbucks, stars), customers must order or pay through the Starbucks app. Mediating the customer experience in this way creates a gold mine of data on customer preferences and behavior.

Drink orders; lifetime value of users; Frequently visited sites; By directing its customers to an app—seasonal preferences—Starbucks can collect data on all these habits and more. Strengthening the brand to deliver more relevant benefits and communications to its customers.

If a loyalty app works for your online store, It is a great way to collect and centralize customer data. Otherwise, An efficient point of sale system can help you collect most of the same information.

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Amazon’s Prime membership program is a well-known paid loyalty program. For an annual fee, Prime members have access to Amazon’s streaming service and Prime Day sales, as well as unlimited free two-day shipping on millions of products and other perks.

Amazon faces stiff competition from other retailers like Walmart. Elsewhere you can find most products on Amazon. Prime differentiates itself and entices customers to buy products exclusively from Amazon. It works—Prime members spend four times more on average than other Amazon customers.

For retailers in the same industry with very similar products and price points among competitors; Your customer loyalty program can become a differentiator and a competitive advantage.

Consider retail clubs like Costco. Give customers a reason to shop exclusively.

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