Your Complete Guide To Ecommerce Loyalty Programs

For ecommerce brands, lower repurchase rates mean lower customer satisfaction, lost revenue, and wasted marketing efforts. As a brand, most of your marketing effort (your budget and your time) goes toward acquiring a customer. But, are you prioritizing making them come back? Without increasing your customer retention rates, you could be hampering your profitability.

The best solution to incentivize customers to return is creating an ecommerce loyalty program. Loyalty programs help reduce churn rates and increase customer retention rates (and customer lifetime value). Not only does this save you a huge cost of acquiring new customers, but it also fosters a community of loyal online shoppers who are more likely to advocate for your brand.

What are ecommerce loyalty programs?

Ecommerce loyalty programs are structured marketing strategies designed to encourage repeat business for your store. They’re all about rewarding your customers for their loyalty through reward points redeemable towards exclusive offers, discounts, gift cards, cashback, or even personalized experiences (for their most loyal customers). Points can generally be earned through ecommerce sales. Additional points can be earned through other ways, like when a customer adds a product review.

This, in turn, motivates customers to actively engage with your ecommerce store, whether through purchases, referrals, or social media interactions, and improves their shopping experience as well. In fact, 32% of consumers strongly agree that a loyalty program makes their customer experience better.

Loyalty programs vs. referral programs

• A customer loyalty program is focused on incentivizing customers to repurchase from your brand.
• A referral program program is focused on incentivizing customers to share your brand with their friends, family, and social media following.

Types of ecommerce loyalty programs

Ecommerce brands use a variety of loyalty programs, each designed to fit their unique goals and customer base. Let's dive into some of the most popular types of ecommerce loyalty programs and see how they help keep customers coming back and build lasting brand loyalty:

Point-based programs

In point-based programs, customers earn loyalty points for every purchase, which they can later redeem for discounts or freebies. It’s like a fun game where the more you shop, the more points you collect, and the more rewards you unlock!

For instance, Glo Pals implemented Rivo’s point-based loyalty program on their ecommerce store to encourage repeat customers and enhance engagement. To achieve that Glo Pals keeps their community engaged with enticing perks like free shipping, exclusive benefits, free gifts, and discounts.

This is what their reward page looks like:

Tiered programs

Tiered programs are like climbing a ladder of rewards. Customers reach different levels based on their spending, unlocking better perks as they go. It feels great to move up and get access to a VIP program with benefits like discounts and early access to sales or special events. Being a member of higher tiers also makes you feel special and exclusive.

Rareform, for example, teamed up with Rivo to create a tiered program, a perfect fit for their brand. The more customers interact, the higher they climb, earning exciting rewards along the way. The result? Rareform saw a remarkable 26.9% increase in their customer repeat purchase rate, highlighting a significant boost in customer loyalty and engagement.

Additionally, Rareform's Loyalty Program offers various ways to earn points, as illustrated in this image:

Value-based programs

If you know your customers care deeply about making a positive difference in the world, then a value-based program could be perfect for you and them. With this kind of program, you're not just offering great products; you're also giving your customers the chance to support causes they truly believe in. Take TOMS for example. They don’t just sell shoes; they also run the 'Improving Lives' campaign, where they donate a portion of their profits to support various community initiatives.

Check out the image below to see how TOMS is changing lives one step at a time:

Paid Programs

In a paid loyalty program, customers pay a one-time fee for access to extra benefits. This approach is effective because:

• It incentivizes customer loyalty; for instance, customers are less likely to switch to a new food delivery app if they already pay a monthly fee for free delivery.
• Additionally, customers perceive the fee as cost-effective compared to making multiple purchases.

Amazon Prime serves as a great example, boasting an estimated 167.2 million members in the US as of 2023. Members pay an annual fee and get loads of benefits like free shipping, video streaming services and early access to exclusive deals. This makes them feel like they're getting a great deal and encourages them to stick around.

4 Successful ecommerce loyalty programs to get inspiration from

The best loyalty program not only incentivizes customers to increase their spending but also effectively attracts new customers. Looking for inspiration to enhance your ecommerce loyalty program? Here are five successful examples to draw insights from:

Example 1: Emi Jay

Emi Jay is a passionately dedicated brand which crafts original, distinctive and top-quality hair accessories for women of every age and background. To keep their customers coming back and boost engagement, they've launched Rivo's loyalty program on their Shopify store. They have named it “Sparkle Rewards”, where you can earn 1 sparkle for every dollar you spend. These sparkles can later be redeemed for coupons applicable to future purchases, giving customers bonus points for their loyalty. Best part? Customers can easily interact with the loyalty program on a fully customizable and beautifully designed loyalty page on their store.

Here’s an image of how their Rewards Page looks like:

Results: In less than a year, Sparkle Rewards made a significant impact on the two key metrics: sales and engagement. Thanks to Rivo's integrated loyalty page, over 4,000 Emi Jay Ladies signed up for the program, leading to a 10% increase in sales from Rewards Members.

Why it worked:

• The loyalty program enabled them to establish different reward tiers for Emi Jay Ladies based on their spending.
• Integrating Rivo’s widget into their website enabled them to run a rewards program, boost order value, and strengthen customer relationships.

Example 2: H&M

H&M, a global fashion powerhouse, is celebrated for its trendy apparel and high-quality products offered at unbeatable prices, all with a commitment to sustainability. With a vast selection of clothing, accessories, and home goods, H&M is the go-to destination for those seeking style and value.  

Their loyalty program is designed with two tiers to reward dedicated shoppers. Starting as a Regular member, customers can elevate to Plus membership by accumulating 500 points, which equates to $500 in purchases.

Here’s how:

Results: With a significant increase in customer retention and repeat purchases, H&M has garnered over 120 million loyalty program members across 26 markets.

Why it worked:

• Plus members enjoy exclusive perks like free shipping, surprise offers, and early access to limited-edition collections, rewarding them for their loyalty. This tiered system ensures that the more you shop, the more you benefit, making each purchase even more rewarding.
• Unique experiences and surprise offers for high-tier members add an extra layer of exclusivity and personal connection with the brand.

Example 3: Way of Wade

Way of Wade, a distinctive sports brand developed through a collaboration between Li Ning and Dwyane Wade, devised a tiered loyalty program initiative with the help of Rivo in their Shopify store. The program features VIP tiers, with exclusive perks for top customers, incentivizing spending and brand interaction. Every activity customers undertake as a member brings them nearer to the highest tier- Hall of Fame. This successful implementation of an ecommerce rewards system has helped the brand achieve even greater success and customer loyalty.

Results: Way of Wade quickly achieved success with 12% of their customer base enrolling in the loyalty program. Remarkably, 78% of program-driven sales came from repeat purchases by engaged customers who interacted with loyalty program emails.

Why it worked:

• Rivo’s Loyalty program allowed Way of Wade to create their own rewards website that made it more user-friendly and engaging for their customers.
• Through this program, registered customers ascend the rewards hierarchy, unlocking discount coupons, gifts, and priority access to limited releases, thereby encouraging customer loyalty.

Example 4: Lululemon

Lululemon, a Canadian brand specializing in premium athletic apparel, is renowned for its top-notch yoga and fitness wear. The brand runs a successful loyalty program for its customers which has exceptionally high customer engagement. Their first tier is called Lululemon Essential, which offers a range of valuable and exclusive perks at no cost. However, their second tier, called Lululemon Studio, requires a monthly subscription fee for access.

Here are the benefits of joining the Lululemon Essential program:

Results: Lululemon's effective community marketing strategies are evident in the impressive 92% retention rate among the top 20% of their highest-spending customers.

Why it worked:

• Essential members gain access to Studio content, including limited workout classes, encouraging engagement and serving as a pathway towards the Studio membership, which offers additional benefits.
• Signing up for a Lululemon Studio membership offers clients a deeper immersion into the Lululemon experience, providing access to over 10,000 world-class workouts and unlimited experiential store classes. This fosters stronger engagement with the brand and enhances their connection to the community.
• This strategy ensures that they are tapping into their target audience and engaging with them irrespective of whether their audience is ready to pay for being a member or not.

How to create and launch a loyalty program

As already discussed, creating and launching a loyalty program can be a powerful strategy to retain customers and drive repeat business. Let's dive into a step-by-step guide on how to set up a loyalty program with Rivo, to ensure your customers keep coming back for more.

Step 1. Create Your Page

Begin by accessing the page setup feature within the Rivo app.

1. Go to Onsite > Dedicated Page.
2. Click on the “Create Page” button to initiate the process.

1. This action will generate your Loyalty Page, visible at /pages/loyalty-program on your online store.
2. Additionally, a new page titled "Loyalty Program" will be created in the Pages section of your Shopify Admin.

Step 2. Customize Your Page

Now comes the exciting part – customizing your page to reflect your brand identity and showcase your loyalty program's benefits. Here's what you can customize:

• Banner: Use a visually appealing banner to grab attention
• Explainer: Clearly communicate the advantages and features of your loyalty program.
• Ways to Earn: Detail how customers can accumulate points or rewards.
• Ways to Redeem: Outline the redemption options available to customers.
• Referrals: Encourage customers to refer friends and earn rewards.
• VIP Tiers: Highlight exclusive access and perks for higher-tier members.

Step 3. Customize for Logged-In and Logged-Out Views

Now, you can customize the page for both logged-in and logged-out views, offering personalized experiences. The logged-out view will showcase the program's benefits and prompt visitors to join, while the logged-in view will display the customer's account details, points balance, referral URL, and VIP tier status.

That’s how a logged-in page will look like:

Once you scroll down till the end you can also have a look at your VIP Tier status:

Step 4. Use the Page Builder

Rivo's page builder lets you customize each section for both logged-in and logged-out users. You can adjust fonts, colors, text, images, and backgrounds to match your brand's aesthetic and messaging for the entire program.

Step 5. Launch Your Page

Finally, to make your loyalty program page accessible to customers, all you need to do is add a link to your website navigation. You can do this by following these steps:

• Navigate to Online Store > Navigation in your Shopify Admin.
• Select the menu title you wish to edit.

• Add a link to yout Loyalty Program page as a menu item and choose a suitable name for it. And here we go! You now have a page published.

Here’s an example of how it will look for your customers:

By following these detailed steps, you can create and launch a dedicated page for your ecommerce loyalty program with Rivo. Don’t forget to effectively communicate your program's benefits, showcase your bestsellers and new products, and encourage customers to sign up so that you can increase the number of members in your program.

Conclusion

There’s no universal formula for creating an ecommerce loyalty program that can boost sales for your ecommerce business. However, it's crucial to customize your loyalty program to meet your customers' specific needs, offering personalized experiences, and exclusive discounts that encourage repeat purchases.

Begin with a simple approach, monitor your data closely, and make continuous changes to improve customer engagement, while keeping the needs of your target audience in mind.

If you’re ready to take your ecommerce store to the next level, increase your brand awareness, and reward your best customers, you need Rivo's top-tier loyalty management software. It not only helps you launch and manage a loyalty program effortlessly, but it also helps you gather customer data which you can further use to make data-driven decisions. Book a demo with our experts today and let us show you how we do it!