LoyaltyNov 03, 2021

12 tips to design a loyalty program for eCommerce that your customers will love

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Imane Kabbaj
Designing a Loyalty program

Table of content

Loyalty Loop
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One of the most important requirements for your company is to ensure that your loyalty program operating cost does not exceed the budget of managing it.

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Membership structures should be flexible- offers should be customized to the customer base and tailored according to specific frequency of visits or spending patterns. For example frequent shoppers can earn points at a faster rate than infrequent shoppers. Those who purchase higher-priced items can also benefit from increased point incentives than those who spend less.

Rewards should be simple to implement. Your loyalty program must have a fast redemption process with easy-to-understand reward options that can easily be shared on social media

Amazon Prime 

Amazon's loyalty program was launched in 2005. To be part of Amazon Prime, users have to pay a fee per month or year and take advantage of several benefits such as free shipping on all products.

By being part of this powerful business ecosystem, customers are more likely to go back for other purchases because they already paid a fee to be a member of the program.

In addition, this is an example where free shipping became one of the main drivers for customers coming back and buying more from Amazon. It's estimated that Prime members spend about double compared with their non-Prime counterparts.

With over 100 million users being part of its loyalty program,  Amazon Prime is one of the most successful online loyalty programs in place today.

Amazon Prime Box

Zappos

Another great example to look at when it comes to loyalty e-commerce and free shipping, we have Zappos. This company was acquired by Amazon for $850 million back in 2009. They specialize in shoes and clothing items but also offer a wide range of other products.

To create strong customer loyalty, Zappos has been offering free shipping on all purchases since the beginning of its business activity. Even though they have recently created a membership program, called Zappos Insider Rewards, where customers can get discounts and other benefits based on how much they purchase from them every year, this company still offers free shipping on all orders.

This is a great example of how companies can turn their offline presence into an attractive eCommerce environment with several benefits for their customers, along with free shipping on purchases

Zappos loyalty

Sephoras' Your beauty insider loyalty program

Another example of online loyalty e-commerce is Sephora. This cosmetics company has been offering a program called Beauty Insider since 2009 to reward its customers for their purchases. In fact, the more a customer spends with them, the higher status they get and thus have access to exclusive deals and promotions.

In addition,  Sephora allows its customers to earn points through different activities, such as sharing their favorite products on social media.

This is a great approach for companies who want to reward not only the most loyal of their customer base but also engage them more to get feedback about new products and services they could create.

Furthermore, their loyalty programs design is easy to use and understand for their customers and has been a major contributor to Sephora's growth over the past few years. 

Sephora loyalty club

Walmart+ 

In 2020, Walmart decided to launch a new loyalty program called Walmart+, where customers can earn and redeem cash rebates directly on their accounts. This is the result of an expanding relationship between them and Ibotta, who has been operating in this space since 2018. Customers will be able to use these rewards at checkout, for grocery delivery orders, or purchase on Walmart.com or from within the Walmart app itself. 

In addition,  Walmart+ members will have access to the Black Friday deals before everyone else, starting on November 13th of this year, with four hours of early shopping available. Other benefits include free and unlimited grocery deliveries to the home for orders of $35 or more and access to an app that allows customers to skip the checkout line for a yearly membership fee of 98$ a year or 12.95$ monthly.

This is another example where companies are using loyalty programs to engage customers and turn them into advocates for their brands. Not only can they earn cashback by making purchases but also gain exclusive discounts and benefits during the holiday season.

Furthermore, since Walmart has an estimated 32 million U.S. households enrolled in its program, they see this as a great opportunity for growth, especially at a time when many shoppers are worried about online out-of-stocks during the holidays.

With this in mind, it's easy to see why Walmart is betting on its loyalty program and how companies can use these types of initiatives to drive more revenue for their business while rewarding loyal customers.

Walmart loyalty app

Costa Coffee loyalty program  

The new program is called "Costa Club" and it replaces their previous one (which launched back in March 2010) where customers could get points and gain access to exclusive benefits. This is a great initiative for companies who want to engage their customers in different ways while rewarding them with more than just discounts.

This new program was created after taking input from 17,000 consumers about what they wanted out of the loyalty programs. Another interesting aspect that sets this apart from other similar initiatives is how it will be integrated with the Costa mobile app, providing customers with more opportunities to earn and redeem points through their smartphones.

The new service departs from a points-based loyalty program. After purchasing eight coffees, customers may earn a free drink of their choosing. Costa Coffee is offering a free drink to anyone who uses a reusable cup to buy four drinks until 31st March 2022. Customers will also receive one free cake on their birthday, as well as other rewards and treats. 

In addition, the loyalty program will be free to join and open for anyone. It is expected that it will have a positive impact on the company's revenue, as it will be able to attract more customers and keep them engaged throughout the year.

Costa coffee loyalty app

The Body Shop

The Body Shop, a cosmetics company based in the UK, has been offering customers their Love Your Body Club loyalty program since 2013. This global program is currently active in 56 countries and allows its members to enjoy benefits such as one free product every time they spend over $40 and invitations for exclusive events.

The main reason it has succeeded is that it allowed customers to earn points in exchange for their purchases, which they could, later on, redeem in the form of free products or discounts.

This approach has helped The Body Shop create greater value for its customers and increase sales at the same time.

Emirates airlines’ loyalty program

Emirates has one of the biggest loyalty programs in the airline industry. Their program is called "Skywards" and it was launched back in 1981. Customers who want to join this program have to be members of Emirates Skywards Blue, Silver, Gold, or Platinum tier.

As a member, they will have the opportunity to enjoy great benefits such as earning miles for all flights and getting access to airport lounges. They can also redeem their points for free upgrades on specific routes, along with extra baggage allowances, priority check-in, and boarding, seat selection, lounge access, dedicated phone line, or email address.

Emirates' tiered system recognizes that not all customers are created equal. This allows them to reward their highest-value customers, such as business class travelers, who spend a lot more on their flights and travel more frequently. On the other hand, blue & silver members who spend less can still enjoy several perks, which will encourage them to fly more frequently with Emirates. You can also move up the ladder by using a Skywards co-branded card, where you can pay for your everyday purchases and earn Tier Miles for the Skywards Miles you earn.

Another interesting aspect of the program is that it offers so many options for customers to gain benefits. This includes purchasing products directly from Emirates, as well as other things such as hotel stays and car rentals. This loyalty program has helped Emirates reach a large number of potential customers who are looking for great rewards in return for their purchases. 

This is a good example of how creating multiple tiers based on the value that each customer brings can be effective in terms of loyalty programs. 

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Imane Kabbaj

Marketing Manager at Loyaly & eCommerce growth specialist. I believe that retention is the new acquisition, and online customer loyalty programs make it possible.

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