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How Loyalty Programs Benefit Ecommerce Brands

How Loyalty Programs Benefit Ecommerce Brands

From Ghostbusters to Pink Ladies, being part of a special group comes with perks. While most ecommerce brands aren’t giving away specter-proof jumpsuits or bejeweled pink jackets, offering benefits to members is a time-honored, strategic tactic that savvy ecommerce brands employ. 

While those “memberships” go by many names, they all stem from two words: Loyalty Programs. And within those two words are endless possibilities for enhanced customer satisfaction, increased sales, and more affordable shipping for your business. 

Loyalty programs provide the perfect marriage between better  ways to market and retarget customers while simultaneously rewarding loyal buyers with a range of benefits and that exclusive “part of the club” feeling. Let’s take a concise dive into seven key areas of this critical ecommerce brand tool for boosting business. 

1.) Retargeting and Reminders 

Fact: customers who create loyalty programs with your ecommerce brand are more likely to make purchases in the future. If a person is willing to provide assorted contact info and personal details to a brand, it implies they are open to communication. That means you should contact them at every meaningful opportunity with news related to your ecommerce brand, like new product launches, sales, seasonal promotions, restocks of backordered popular items, etc. The traditional way to do this has been email marketing, but text marketing, and harnessing the power of social media platforms are other viable options. If your ecommerce brand has an app, it is also a great way to reach people who subscribe through there. 

2.) Exclusive Offers 

To distinguish the “club” of cool cats who are part of your loyalty program from the general masses on your retargeting list, don’t just send them all the same emails as everyone else. Your ecommerce brand should retarget loyalty program customers with exclusive offers like early access to sales and product launches, extra promotion codes to apply to existing sales, and so on. This feeling of exclusivity can prompt customers to browse your site more readily because suddenly they have access (perhaps even limited-time access) to something others don’t. 

3.) Personal Prompts 

If loyalty program sign-ups ask for more than basic contact info to personalize member programs, customers may have a specific reason to come back at a specific time. For example, if your ecommerce brand asks for a birthday or birth month under the guise of special annual rewards, a customer will know to expect a free gift with purchase or discount at a specific time of year, which is a great incentive/prompt to shop then. 

4.) Leveling Up 

Some loyalty programs work on a tier system, as in if you spend a certain amount in a year, quarter, or sometimes even month, certain rewards will ensue. For instance, if you purchase under $100 from an ecommerce brand’s online store in a year you receive a 10% birthday coupon. If you spend between $100 and $200 perhaps that coupon increases to 20%. If you hit the $250+ benchmark you get a 20% coupon and a free gift. 

This is just one example of how a tier system can be structured. Others can be early access to sales, exclusive merchandise, and more. The key takeaway is by offering enticing benefits related to extra discounts, extended access, free stuff, expedited shipping, even free shipping, you are drawing your customers back to spend more so they can get more, leveling-up as it were.

5.) Club Coolness

If your ecommerce brand has a certain image, philanthropic goal, mission and values set, etc. it doesn’t just grow based on its product line; it grows based on how many people want to be a part of that vibe. Loyalty programs can be an extension of that “tribe mentality,” compelling people to sign up so they can feel connected to what the brand represents. 

If your loyalty program leans into a vibe that aligns with their values, or messaging that customers can be a part of something bigger, it may compel them to join the loyalty program sans incentives. Then they can, of course, proceed to get the accompanying benefits and you that coveted contact info. However, you can also utilize their “fandom” to support your mission and further connect them to your company. Maybe that’s getting them to follow your ecommerce brand on different social media platforms, or participate in contests or campaigns, or donate/round up a purchase cost to support a cause. The sky’s the limit!

6.) Affordable Expedited Shipping 

This is a big one because, while free 2-day shipping or free shipping in general are both huge deals to buyers, loyalty programs actually make it possible for ecommerce brands to offer these benefits without breaking the bank. Consider Amazon Prime. Free expedited shipping became a famous cornerstone of the ecommerce giant, but they weren’t giving it away to every person. Free expedited shipping costs have only been offered to Prime members

Customers who create loyalty programs are more likely to purchase again because of aforementioned points 1 – 4 that pull them into your brand’s ecosystem. So if your ecommerce brand offers free expedited shipping to members, although you may lose money on the initial transaction if it’s a smaller purchase, the fact that the customer gave you their information is a positive sign that they are willing to buy again. It’s basically playing the long game. You’ve added a compelling shipping proposition to your account structure that drives loyalty. And you’re planning on offsetting those shipping costs in your budget with the increased business that customers will give as a result. 

***Note – ShipMonk is known for its amazing global shipping network, which we’ve made even more enticing by utilizing the flexibility of our Virtual Carrier Network. If you’re interested in offering 2-day shipping (free or otherwise) or another form of free expediting shipping, we have plenty of tutorials you can utilize to learn more!

7.) Making Sure the Post-Purchase Funnel Delivers

Customer experience isn’t limited to shopping or delivery; the crunchtime comes when something goes wrong. Offering loyalty program members extra forms of package protection or post-purchase customer service in the case of an issue is a massive benefit. At ShipMonk, for example, we make that an easy option for ecommerce brands with MonkProtect™. This post-purchase suite is designed so (if you so choose) customers can opt-in at checkout to protect their orders against loss or damage. As an added bonus, merchants can automatically add protection to every order. It’s a double benefit! Your ecommerce brand gets more chances to promote your store with branded order tracking features and your customers are well taken care of in the case of order issues.

Loyalty Programs Checklist

We’ve just given you a bunch of brilliant ways loyalty programs can benefit your ecommerce brand as much as they benefit your customers. Before moving on to our final advice, let’s go over things you should ask of your incoming members when they’re signing up. Note that we’ve italicized fields that should be mandatory. The rest can be optional or fine-tuned based on how your ecommerce brand structures its loyalty program.

  • First and Last Name (helps personalize marketing efforts)
  • Email (great for marketing and retargeting)
  • Phone Number (great for marketing and retargeting)
  • Birthday or Birth Month (for exclusive offers and gifts)
  • Referral Offer (discount offered if you provide the email of another person)
  • Preferences (based on what you sell, you may be able to sharpen your marketing and promotions around member preferences—for example colors, sizes, styles)

Words to the Wise 

Naturally, the more information you can collect from a customer the better, because then you can retarget them with greater precision and frequency. That being said, when your ecommerce brand offers a loyalty program, you’ll want to strike that right balance between required info and optional info at the time of sign-up. 

Branching off that thought, never make creating an account of any kind a mandatory step for making a purchase with your ecommerce brand. Opting into a loyalty program needs to be an exciting thing customers decide they want to do. After all, the Pink Ladies from Grease never waited outside the school and shoved anyone’s arms through a jacket. Being a part of the club is up to the buyer. And considering creating an account revolves around giving an ecommerce brand personal information, you can’t set up your business in a way that forces any and all potential buyers to do this. 

So, all in all, don’t be pushy, don’t ask for too much information, and don’t make people give information they don’t want to—that means no forcing sign-ups, and don’t make non-essential questions mandatory. 

All these tactics can drive a customer and potential sale away, resulting in increased cart abandonment rates and lost revenue. As the Baynard Institute highlighted in their 2022 results, 24% of customers surveyed across 48 different studies said a website wanting them to create an account was a top reason for cart abandonment. Are you really willing to risk a quarter of your potential profit on being too pushy?

What’s the Loyal-tea?

At a glance from the merchant perspective, loyalty programs help ecommerce brands reach customers more effectively, thus inciting repeat purchases, long-term brand loyalty, and offsets to expedited shipping and free shipping. At a glance from the buyer perspective, loyalty programs offer great rewards that allow exclusive access, extra discounts, targeted ads they are more likely to find relevant, and other benefits that encourage purchases. 

Sounds like a win-win. With at least seven other wins mixed in, especially when you consider the realms that loyalty programs open up in terms of competitive free and expedited shipping options, which have a slew of other benefits attached. ShipMonk is here to help your ecommerce brand implement these, and any other terrific tactics that foster business growth. So let’s get started! Contact our team today to work with a 3PL known for its innovation, strategy, and loyalty to ecommerce brands on the rise.

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