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5 Benefits of Having a Loyalty Program for your Ecommerce Business

With more businesses than we can count, consumers today have more options on where to spend their money. The global ecommerce market is expected to total $5.55 trillion this year and grow up to $6 trillion by 2023.

With so much competition, ecommerce businesses have to stand out and offer more ways for customers to interact and connect with their business. An ecommerce is only as strong as the experience it gives to customers. This is why an average of 40% of global brands are creating more ways for customers to interact with the brand itself. 

One of those is by implementing a loyalty program. Whether you’re thinking of adding a loyalty program for your business or need ways to level up your existing program, here are five benefits of having a loyalty program for your ecommerce business. 


What is a Loyalty Program? 

A loyalty program is a retention strategy used to reward customers that purchase and interact with your business. The sole purpose of a loyalty program is to turn one-time customers into repeat customers and build a loyal following. 

Loyalty programs are a great way to retain customers once they have already been converted through their first transaction. Smile is available on Shopify, BigCommerce, and Wix, and allows you to boost sales from your existing customer base. Through points and rewards, you can increase customer engagement and loyalty to drive repeat orders—all without any third-party data or expensive advertising. 


Gather First-Party Data and Customer Retention 

It’s more cost-effective to retain customers than to acquire new ones. Depending on your industry and type of customer - it can be five to 25 times more expensive acquiring a new customer than retaining an existing one. A benefit of having a loyalty program is the increase in customer retention rate and gathering of first-party data. 

The perks and rewards of your program can incentivize customers to return and make repeat purchases or try new products. Based on your reward tiers customers earn rewards each time they shop. Show your customers you care and offer incentives to engage and shop with your business. This is a foundation for building brand loyalty. 

Once you are able to collect customer data from your metrics and retention rate, you can use this first-party data to make strategic decisions on where your business should go next. What does your customer love or find challenging? What was the customer journey like? With first-party data, you can build upon what your customers are responding to. 


Offer an Excellent Post-Purchase Experience

The customer’s buying journey doesn’t end when they receive a confirmation email. Followups across every customer touchpoint matter. It contributes to the overall customer experience and interaction with your brand. One of the benefits of a loyalty program is the opportunity it provides a business to give customers an exceptional post-purchase experience. 

The post-purchase engagement with customers is simplified with a loyalty program. If the customer knows they can be rewarded with perks and points for their purchase, this draws customers back. You can offer reward tiers, points, special deals, and other benefits. 

How someone receives a package is just as important as the buying experience. No one want’s their purchases to come in a broken, bland, or torn package. Packaging is an experience in itself that provides loyalty as well. According to data, “52% of online shoppers receiving orders in a custom package, are most likely to return to the same company.” You can check Arka's custom shipping boxes and mailer boxes that ensure an excellent unboxing experience.

Without a Trace Foods is a snack company free from the top nine allergens. Their products range from cookies to granola bars that are gluten-free and plant-based. Their post-purchase experience offers loyalty with their “Trace Tokens”, offering customers discounts on future purchases. These are earned in exchange for engagement on social media or placing an order. In addition to their loyalty program, they created their packaging with Arka, branded with their business. Their starter pack is shipped in nice custom packaging. Without a Trace Foods created their packaging and offered customers an experience up until they begin eating their snacks. 

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You Build a Community 

Building a community is essential for long-term growth and success. A brand’s community is built upon trust, transparency, and offering a great experience to customers. Members in your community will offer their loyalty, become high-value customers, engage with your content, and tell their circle of influence about your company. "A brand community is a group of customers who are invested in a brand beyond what is being sold. These customers want to become a part of the brand itself."

The engagement from a loyalty program keeps customers coming back and becoming part of your community. You add a community component to your program by setting up tiers and status (points) customers can fall into as they return and return again. Keep your community engaged by encouraging users to leave a review, create user-generated content, and by sharing your business milestones with them. 

La Selva Beach Spice is a spice company that offers a loyalty program, rewarding customers for joining their social media communities and placing an order. For example, customers can earn 50 points for following them on Instagram. Their loyalty program engages customers to return but also to share their purchases through user-generated content. La Selva Beach Spice has an Instagram Story highlight that reposts community members and their purchases in action. 

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Customize Your Program To Fit Any Size

A loyalty program is a natural step to growing and scaling your business. The good news about whether you are just starting out your business or looking for ways to take it to the next level - a loyalty program can be customized to fit any business size. A loyalty program doesn’t have to start out offering an outrageous deal. Start simple, listen to what your customers want, and start small. Offer rewards such as discounts or first-time offers. 

Overview Coffee is a small organic coffee brand that is focused on sustainability and regenerative organic agriculture. They implemented a loyalty program that fits their business size and caters to their customers. With only three rewards users can earn, Overview Coffee is starting small, with a loyalty program that will grow as the brand grows. 

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Expand Your Reach with Marketing 

According to a study by Technology Advice, “a study showed that 82.4 percent of customers were more likely to shop at stores that offer some kind of loyalty program,” proving that an effective rewards marketing strategy may be just what you need to edge out the competition. 

A loyalty program fits well with expanding your marketing reach and reducing marketing costs. One way is through referrals. Offer referrals can engage customers to tell their friends and family about your business. Loyalty programs naturally extend to marketing with user-generated content, social media content, and helping with email marketing. Either by providing content for each of these channels or data that allows you to reach people in these channels. By offering a reason to be engaged with your previous and returning customers, you bridge a gap between you and your customers. Always connected and within reach. 


A Loyalty Program Grows Your Business

The benefits of implementing a loyalty program are worth it because it extends to every area of your business from marketing to business development and growth to customer retention. With so much competition, ecommerce businesses have to stand out and offer more ways for customers to interact and connect with their business. An ecommerce business is only as strong as the experience it gives to customers. 

If you’re ready to start a loyalty program or learn more about Smile Rewards, then feel free to reach out to us or connect with us. 

Author Bio: 

Jonathan Roque is the Content Marketing Manager at Jonathan is passionate about ecommerce and helping small and medium-sized businesses grow and maximize their potential. 

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