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An ecommerce loyalty program can be a great way to retain customers, but how do we implement an effective program that gets customers engaged and excited?

As I’ve explained in a previous article, loyalty program members spend 67% more than regular customers. So how do you make sure you capitalize on the opportunity? 

Here’s a handy guide on how you can easily turn one-time buyers into repeat customers for your ecommerce business. 

In this article, I’ll explain how to create a loyalty program on your ecommerce platform. I’ll walk you through the planning, implementation, and, finally, the tracking and refining stages of creating a program that drives customer retention and repeat purchases. 

1. Define The Goals Of Your Ecommerce Loyalty Program 

What outcomes are you looking to produce from an ecommerce loyalty program? At the end of the day, every ecommerce store would like more sales, but what other goals do you have in mind to determine success? 

Give this some thought while you are still in the planning stage. Creating a defined goal will also make it easier to understand which KPIs you should be tracking (more on reporting later on). 

For example, some goals can be to increase your average basket size, double the number of followers on your brand’s Instagram page, and gain more referrals from other loyal customers. Outlining your goals can give you a better idea of what your ecommerce loyalty program strategy should look like and what tools and tactics you will need to reach your goal. 

2. Study The Customer Experience And See What’s Working And What Isn’t 

Look at your ecommerce website and hit the reporting tab to see how your site is doing on a month-to-month or year-to-year basis. Some key metrics you will want to note would be how many transactions you are doing per month, what your average order size is, and how many recurring and new customers you are currently getting. 

Even if your online store isn’t getting a ton of orders yet, no worries. We just want to see how the store is doing currently so we can measure how establishing a loyalty program can improve these metrics. Once you find out where you currently stand, it’ll be easier to measure your progress once it is up and running. 

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3. Determine The Target Audience 

Who are you looking to target for your ecommerce loyalty program? It’s tempting to say everyone in your customer base, but you are better off focusing on loyal customers who have a repeated history of purchasing from your store and have the potential to purchase a lot more with just a little encouragement. 

We call these VIPs. Customers who regularly buy from the brand and spend big without hesitating. These loyal customers are big spenders but need reasons for visiting your website more often and for purchasing more frequently. 

4. Choose The Right Perks To Incentivize Your Loyalty Rewards Program

This is a great opportunity to survey your existing customers and get a better sense of what they want out of an ecommerce loyalty program. They may want to be treated to free products on their birthday or be offered exclusive access to limited-edition products. 

Finding out what makes them tick shows how you value their business and are dedicated to creating something that benefits them directly. This can also inspire your creative juices! 

Read this article to learn about the types of loyalty programs available, whether you are looking to create a point-based system or a paid subscription model. 

5. Pick A Compatible Integration For Your Customer Loyalty Program 

There are so many loyalty program plugins available today. If you are working within a Shopify environment, here are some great options with more information on plans and pricing

When choosing an ecommerce loyalty program, find one that works well with your current ecommerce site and your other marketing platforms. On the app page, you can usually see a demo of how the product works, along with a section on what platforms and apps it works best with. 

Editor's Tip

Find a loyalty app that works well with your email marketing software. This will make it easier to automatically sync information and segment your loyalty customers into separate tiers based on their points or actions.

I also like to take a look at the product reviews section to get a better sense of how more recent customers feel about using the loyalty software. You can uncover insightful information from the feedback from real customers and, from there, decide if this tool will work for your business or if it’s a hard no.

6. Communicate Value For Joining Your Program 

It’s launch day! Get people excited about your perks and make it easy to find the link that allows them to sign up and start earning points. If your loyalty program is adding value to your customers' lives, the number of sign-ups is a good indication of how well things are going.  

Create a dedicated page on your website that gives a clear breakdown of what the program offers. If you are creating a tiered system, design a chart that shows what other benefits customers can unlock by graduating to a higher tier or milestone, whether it’s higher discounts or early access to new products. The next level should be enticing enough to keep customers motivated at checkout.

Create a section for a referral program if that’s a priority for your business. 

You should also include information on this page about how someone can redeem loyalty points and be transparent about when their loyalty points expire. 

7. Make It Easy To Join On Multiple Platforms And Social Media

Not every customer will stumble onto your loyalty program landing page on your website, so make it known! Promote your loyalty program across different channels like email, SMS, and social media. 

One way to create excitement is to offer a unique incentive for first-day sign-ups. For example, the first 100 customers to sign up will automatically get a 20% discount. This not only creates excitement but can encourage a flurry of purchases. 

8. Customize Customer Journey And Profiles 

Create a series of automated actions for every customer event. Customer data is gold when it comes to creating your marketing strategy. 

 For example, when they reach a new tier, trigger an email that notifies them of their achievement. You can also upsell them to encourage more frequent spending, and for customers who aren’t engaging, give them a little nudge with an email that encourages them to return. 

9. Analyze Customer Lifetime Value With Reporting Tools 

Once you have your loyalty program set up, a sizable amount of sign-ups, and an engaged group of customers motivated to buy, it's time to dive deep into the reporting section of your loyalty app. 

All loyalty apps will have some degree of analytics available so you can track your loyalty program efforts, but some are more granular than others. If you are a small business with only a handful of orders, this may not be a priority yet, but once you start to scale your business, you will want a tool that can provide deeper insights. 

Sit down and study your analytics to see if your loyalty program is moving the needle when it comes to your predefined goals. Next, is it flagging in other areas? 

One key metric to look at is your customer lifetime value. You can learn more about this formula in this ecommerce loyalty program guide

10. Add Newness To Your Reward System 

Starting a loyalty program takes a lot of effort but so does maintaining one. You don’t want customers to get bored, so add new incentives to get them excited. 

The Sephora Beauty Insider loyalty program does a great job of adding new rewards to get its customers excited about spending their reward points at checkout.

Reward Customers With The Best Loyalty Program 

Retaining customers with a successful loyalty program takes a lot of work and tweaking to get right. Still, once customers get excited about your rewards program, it becomes a powerful customer retention tool.

While you increase your customer engagement rate, boost average order value, reduce churn, build brand awareness, and improve brand loyalty, make sure to refer back to this step to step guide.

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By Frances Du

Frances Du is a content manager and writer with 10 years of experience in ecommerce and digital marketing, turning customer insights and market trends into actionable content strategies that drive engagement and discussion. Frances' editorial work has been featured in The Ecomm Manager, Village Living Magazine, GOOD Magazine, Traveler's Digest, SHE Canada, The Culture-ist, and The Huffington Post. She is a graduate of the University of Toronto.