eCommerce Referral & Loyalty Programs

Loyalty programs increase the probability that a one time customer becomes a repeat customer.
Among all the things we do to grow our businesses, there’s hardly anything as powerful as repeat customers. These stats back up my claim.
eCommerce Referral & Loyalty Programs


Among all the things we do to grow our businesses, there’s hardly anything as powerful as repeat customers.

These stats back up my claim.

  • It’s six times more expensive to get a new customer than it is to retain an existing customer.
  • Harvard Business Review research indicates that merely 5% increase in customer retention can mean at 25% to 100% increase in profits.
  • And in fact not having a loyalty program would mean that you alienate millennials because 68% of them aren’t loyal to a brand that doesn’t sport a good loyalty program.

Customers who have already bought once from you are 27% likely to return for a second purchase.

Again, repeat customers are good news for revenue.

Businesses where 40% of their clientele consist of repeat customers generate nearly 50% more revenue than similar businesses with only 10% repeat customers.

How do we help prevent natural declines in revenue?

By having a loyalty program.

Needless to say, a successful business is built on repeat customers.

Loyalty programs increase the probability that a one time customer becomes a repeat customer.

What does a rewards program mean for the customer?

Loyalty programs provide a platform to customers where they exchange saved points to buy something they like at no cost to them.

There’s also the snowball effect that once someone starts redeeming points he becomes addicted to saving points and redeeming those for the bigger reward. That increases the probability of them staying as a customer for longer.

Loyalty programs can also be set up to acquire new customers by adding a referral marketing component to the mix.

What does a good loyalty program do?

A good loyalty program is the hallmark to customer commitment, positive customer experience and an effort at building long term relationships.

A loyalty program encourages customers to engage further with the brand and store, to make more purchases and move up the ladder to become one of the most valuable customers.

It’s six times more expensive to get a new customer than it is to retain an existing customer. Click To Tweet

What makes a good loyalty program good?

Worthy rewards are the defining feature of a successful loyalty program.

Since signing up for loyalty programs is an additional step the user has to take, so the rewards need to proportionate.

A loyalty account in most cases lets customers see their points and collect rewards. It’s conversion would depend on how attractive the program appears to users.

How to spark interest in the program?

Give new users an initial set of welcome points for free. And announce that loud and clear on the landing page for the program under the value proposition.

Additionally, offering a set of rewards to customers and giving them a sneak peek into the kind of rewards they’re going to get is going to encourage user participation.

There’s one more thing you could do— Ask current members to post their purchases and rewards on the brand’s social media pages. That acts as social proof.

Loyalty points for customer reviews can boost conversions

We’re talking about the internal review system on the site.

There’s little doubt that reviews can improve conversions, improve people’s trust about a site and so on. Millennials tend to trust reviews the most and they often work as well as recommendations from friends

They help buyers forgo fear and make the purchase decision. They add credibility to the site.

Considering the important role reviews play in driving first-time visitors to the buy decision it’s beneficial to see how loyalty programs can help us with that…

By incentivizing existing customers to leave reviews for loyalty points you are scrubbing away a giant obstruction to sales.

Offer shipping discounts as rewards

High shipping is often the biggest friction causing element that prevents checkouts from happening. Many shopping carts are abandoned courtesy of high shipping rates. By offering shipping coupons in the loyalty program you can ensure that people don’t leave the cart fearing the high shipping rate.

They can use the offer or the coupon at the checkout point.offers or offer point redemption at check out.

Points aren’t the only way to reward customers

Points are not the only way to create and base a loyalty program on. You can offer different sets of memberships with each level offering different benefits that are for members only.

That adds a layer of exclusivity absent in most loyalty programs increasing the chance of customers being a lifetime customer.

Let’s consider an example.

Shop4Vitamins did precisely that to restore its declining fortunes.

Shop4Vitamins, an online store for vitamins and supplements faced with stiff competition, decided to implement a loyalty program. With a focus on deals for customers, the loyalty program eventually resulted in a 35% increase in repeat customers.

Instead of treating every customer in the same way, they created a membership level with three tiers— Silver, Gold, and Platinum.

The levels were decided based on how much the customer had spent on the site.

The marketing team decided to remove as much friction as possible by not even requiring customers to sign up for the program. Customers accrued points as store credit for every purchase. The points are automatically redeemed when they make purchases above $50.

Shop4Vitamins program worked because they made it really easy for customers to use the program to accrue points and earn rewards. The benefits were simple to understand and simple to apply. Further, taking away the need of registration removed a major roadblock that makes a large segment back out.

Not having a loyalty program would mean that you will alienate millennials because 68% of customers aren’t loyal to a brand that doesn’t sport a good loyalty program. Click To Tweet

Use loyalty programs to understand your customers better

Loyalty programs also lend other hidden benefits.

With loyalty programs, you are able to understand what makes your customers tick. You understand what motivates the specific demographic the most and since you are clued into their triggers and behaviours you can use those triggers to get them to spend more.

This allows you to hone in on specific rewards that are most appreciated.

Using this data you can market to customers better. The data lets you segment your customer base based on interests and send them campaigns and links to products that are proven to convert thus increasing the bottom line.


A unique value proposition and insightful rewards go a long way in attracting getting customers to engage with the program.

Loyalty programs can convert first-time customers to longtime customers.

But that shouldn’t be the only goal. Your loyalty program should create brand advocates.

In this article, Manu Joseph of the New York Times spells out the benefits of word of mouth marketing.

He details his experience of reading Midnight’s Children by Salman Rushdie at the age of 17 and becoming its greatest ambassador for years.

Brand advocates are not only rabid customers. They are evangelists for your brand.

Referral programs should ultimately aim at creating brand ambassadors out of customers.

Here at Right Hook Digital, we partner with businesses to drive their business outcomes and high ROI. Our time-tested process flows through the steps of Brand Awareness, Nurturing the Relationship, Conversion, to Loyalty and Retention. Our services include:

  • Growth Strategy
  • Facebook Advertising
  • Google PPC
  • Conversion Rate Optimization

Book your free strategy call with Right Hook Digital today by clicking here.

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Dee Deng
Co-founder and CEO
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