Why are Loyalty Programs Important in eCommerce?

Clair Feng

Do you know that you can be actively involved in satisfying your customers? Yes, we are talking about implementing loyalty programs into your marketing strategy. Loyalty programs are tools that businesses use to build trust and develop a strong relationship with their customers in order to keep them happy.

A satisfied customer becomes a long-term brand ambassador for your business. The eCommerce market is saturated and very competitive; a customer who remains loyal to your brand is a perfect way to sustain business growth.

Research has shown that 80% of a company’s revenue is contributed by 20% of its current customers. This result is a huge deal; no business would want to lose that much revenue. That’s why informed companies work hard to keep their current customers.

Another report found that implementing loyalty programs would increase the percentage of orders received on an eCommerce platform by 319%.

Now, you will agree that loyalty programs are crucial in eCommerce. There is more to it. In this article, we will discuss four reasons why loyalty programs are essential for your eCommerce brand.

Ecommerce loyalty programs provide several critical benefits to your business. Let’s look at some of the benefits of loyalty programs, which range from increasing customer base to increasing sales.


Loyalty Programs Promote Customer Retention

Most businesses aspire to have customers who are loyal to them and continue to patronize them.

One sure way to achieve this is by designing and implementing a thoughtful loyalty program. When you execute strategies that ensure your buyers are appreciated, they feel more connected to your brand. This connection fostered by your loyalty programs encourages them to become repeat buyers.

Because, in reality, true loyalty cannot be purchased. Loyalty stems from your customer's emotional attachment to your brand. Understand this, and you'll be fine.

Loyalty Programs Impact Business Sales

Yes, loyalty programs do play a role in increasing sales.

However, we must emphasize that a loyalty program will only improve sales if it is aligned with the expectations of your customers. The first thing you should do as an eCommerce business is to establish a long-term relationship.

Remember that they are real people, not bots, and that you must communicate with them in their language. You must comprehend their requirements and consistently meet those requirements.

When you understand your buyers' needs, you can tailor your loyalty programs to specifically appeal to them. The appeal entices them to participate in the program, which leads to increased sales.

Because word of mouth is one of the most effective forms of advertising, satisfied customers will recommend your company to others in their social circle. This new lead generation will also help your company's sales and revenue.

Loyalty Programs Improve the Customer Experience

Recognition is one of the many factors that influence human behavior. People enjoy being recognized and appreciated. An innovative loyalty program will help you stand out in a world full of boring, underwhelming customer experiences.

Let's face it, because these people can buy similar products from your competitors, good loyalty programs are excellent differentiators. What sets you apart from the competition is a well-thought-out loyalty program that enhances the customer experience. Customers will stay where they are most satisfied.

Loyalty Programs Help Businesses Understand Customer Behavior and Insights

Loyalty programs provide mechanisms for better understanding your customers and generating insights that can be used to improve service.

The most effective loyalty programs focus on assisting businesses in understanding and analyzing customer behavior. And the majority of ecommerce website builders, such as Shoplazza and Shopify, can analyze their behavior. The findings are then used to make educated decisions that improve the customer experience.


If your loyalty programs effectively appreciate your customers, you have a lot to gain as an eCommerce business.

Before you begin incorporating loyalty programs into your business strategy, you should first understand your customers’ requirements. Analyze their behaviors, and make some efforts to build a trusting relationship.

You now have all of this information. You’ll be in a better position to make the most of your customer loyalty programs.

(Contributed by Ayotomiwa Omotosho; Co-author: Clair Feng & Ethan Tang)

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