Encouraging customers to stay with your brand is one of the most important things every eCommerce merchant should care about.

Why? Well, because bringing the cost of attracting a new customer is up to 16 times more than retaining an existing one.

A loyalty program is one of the best ways to keep customers sticking around. According to research, 54% of customers are more willing to stay with a brand for loyalty rewards.

In this article, we'll discuss 7 tips to help you design a loyalty program that retains your customers and turn them into your loyal brand advocates.

Let’s dive in!

1. Do your research

This sounds cliche, but it really does all start with in-depth research and customer data analysis.

By studying your customer behavior, you’ll be able to design a data-backed loyalty program to suit your customers’ needs. For example, would your audience prefer bonus points, a free gift, or exclusive access to sales and new product releases?

Spending time investigating how your customers behave on your site, how they respond to certain offers, and what factors are likely to make them convert will give you insights into such questions.

Once you’ve assembled all your customer data, you’ll be in a position to build a loyalty program your customers simply can’t resist.

👉Suggested Reading: How to calculate your customer retention rate

2. Brand Your Program

Most loyalty program software allows you to customize the appearance of your program to suit your brand.

Given that a large part of your customer’s loyalty will be based on visual elements such as your logo and color scheme, this is an absolute must. There’s nothing worse than a generic loyalty program.

Another fundamental aspect of every loyalty program is personalization. We know that 91% of customers say they’re more likely to stick with a brand that provides relevant offers and product recommendations.

Incorporating personalized offers and rewards into your loyalty program is a sure-fire way to keep shoppers coming back for more.

For example, check out the awesome branding Nike has done on its loyalty program.

What’s also great about Nike’s program customers can sign up through several mobile apps such as Nike Run Club, Nike Training Club, and Nike app.

It's an excellent example of how to create a program that's unique, exclusive, personalized, community-based, and delivered across multiple channels.

3. Keep it simple

Customers are more likely to skip out on your loyalty program if it’s super complicated. That’s why it’s essential to keep things a simple as possible. Don’t make your customers jump through hoops to track their points or claim a reward.

This idea extends to the sign-up process too. Make sure that it is easy for your customer to sign-up and track their points and progress.

Starbucks is an excellent example of a company with an easy and convenient loyalty program that's delivered via its app.

Mobile apps for loyalty programs are not a new concept, but Starbucks has perfected it by making it effortless to order, pay, and collect points whenever they visit a Starbucks store.

4. Give Back

Loyalty programs don't always have to have a monetary value to be appealing to customers.

When shopping online, 50% of millennial parents say they would buy a product from a brand that supports a good cause or charities.

For instance, TOMS became a well-known brand for its 'one for one' approach, donating one pair of shoes for every one pair sold.

Customers don't receive a membership card or earn points, but they stay loyal to a brand because they know that their purchase contributes towards a good cause. Today, for every $3 that TOMS make, they give away $1 to people in need.

And while it's a good thing to do in its own right, according to this study, shoppers spend 26% more, and brands have 29% more sales when they support a charitable cause.

So, think about implementing a charitable element to your loyalty program. Your customers will be more likely to spread the word about your brand, and you might make a few more sales too!

5. Introduce VIP tiers

Creating a tier-based program can help your customers both feel more appreciated and encourage them to spend more.

You can get creative and name your tiers however you want, but make sure that it suits your brand’s identity.

Study your competitors and look for ways to outshine them. You want to ensure you’re giving your customers an incentive to keep spending with you as opposed to your competition.

An excellent example of a multi-tier program is Sephora’s Beauty Insider.

Most of Sephora’s products are in the higher price range. So by redeeming points, Sephora allows their customers to save big without damaging their brand image by lowering the price.

Additionally, Sephora’s Beauty Insider program gives perks to customers, such as free makeover sessions or even all-inclusive annual events that incentivize customers to keep spending to reach the next membership level.

6. Market Your Program

Every loyalty program has to be marketed to be successful. Nobody will know about it until you make it known to your current customers and potential future customers.

For example, check out dog food company pedigree's short television ad that promotes the benefits of its loyalty program:

So, decide which channels you’re going to use to promote your loyalty program. The best option is usually where your niche tends to spend most of their time, be it Instagram, Facebook, or another channel altogether.

Advertising aside, referrals are also a great way to create a grow your loyalty program. Offering a valuable reward or a gift to customers in return for referring new customers can help your program spread like wildfire.

Focusing on getting quality reviews is also key. Shoppers usually look for authenticity when considering a purchase. Seeing positive reviews from verified buyers can give them a final push toward making a purchase. Rewards for a review are common in the best loyalty programs, and it can be a wise addition to your program too.

7. Send Emails Often

Along with abandoned cart emails, loyalty program emails are one of the most important emails your store needs to be sending.

Loyalty program emails should remind shoppers about upcoming sales and update them on their points status regularly. Nobody wants their loyalty points to expire, especially when they worked hard to earn them.

Source: Simons

The best part about reminder emails is that they have a completely different psychological effect behind them compared to the regular promotional emails. You’re not selling to your customers, your giving.

Receiving these emails should feel like getting an email from a friend. It’s a fantastic way to cement existing loyalty and turn your customers into super-fans.

Wrapping Up

Overall, there are various ways to design a loyalty program that benefits your brand.

If there’s one concept that unites the tips in this article, it’s to be customer-centric when designing your loyalty and rewards program.

Always research and analyze your customers’ needs to set your program for success. Remember, above all else, the world’s best businesses exist to serve their customer’s needs first.

We hope that some of these tips gave you inspiration on how to design the loyalty program to build long-term relationships with your customers!

✍️This is a guest post written by Polina Kulikova. Polina is a digital marketeer at Growave who's passionate about creating content for e-commerce businesses to help them succeed. Growave is the all-in-one marketing platform for Shopify stores that help to drive conversions, boost sales, and build brand loyalty.