7 Examples of Customer Loyalty Programs that Keep People Coming Back to Your Online Store
Imagine you bought a gift for your friend’s birthday from an online store. It arrives in beautiful packaging and looks exactly how you thought it would. You know your friend will love it.
Now imagine that same store sends you a series of emails after your purchase, which mention their customer loyalty program and all the discounts, free shipping offers, and other enticing perks they offer as part of that.
Would you buy your friend another gift from this store in the future—like a Christmas gift, perhaps? Or better yet, would you be tempted to have a look at their website for products you might love?
If you answered yes to either of those questions, then this shows the immense power customer loyalty programs can have on retention and your repeat purchase rate.
If you haven’t created a loyalty program for your customers (yet), I hope the tips and examples below will help you to get started.
But why focus on loyalty programs now?
As I’m sure you’ll agree, competition within the ecommerce industry is fierce—and has been for many years. In fact, at the onset of the pandemic, over 85,000 businesses started selling online.
Standing out among the competition is crucial, and any effort to build a standout customer experience can increase brand loyalty.
Thankfully, there are plenty of things you can do to tempt your customers into coming back to your store—and an irresistible customer loyalty program is a fantastic starting point.
Sound tempting? Read on to discover:
- What’s a customer loyalty program?
- Is a customer loyalty program right for your brand?
- How does customer loyalty vary by country?
- Examples of loyalty programs to boost customer retention
What is a customer loyalty program?
Customer loyalty programs, sometimes also called customer retention programs, involve you sharing rewards, discounts, and other special offers with your customers to tempt them into making additional purchases.
People who’ve already bought from you know your brand and hopefully trust you, so they’re already more receptive to your messaging. And, chances are, you spent a lot of time convincing them to make that first purchase—so make those efforts more worthwhile by continuing to incentivize them with a loyalty program.
You might offer discounts or cashback if a customer spends a certain amount with you or places a set number of orders. Or you can get more granular with it and offer different rewards, perks, and incentives when your customers take a particular action—like placing an order, signing up for an account, referring a friend, or even telling you when their birthday is.
Loyalty programs offer your customers added value. Your customers need to feel like they’re getting something truly beneficial, desirable, or useful to give them an extra incentive to keep shopping with you (beyond offering them your awesome products and customer service, of course).
It also needs to be relatively easy or fun for them to earn and collect rewards—or they may lose interest. Hint: Gamification—i.e. turning your loyalty program into a game—works wonders!
Customer loyalty programs can also help you increase revenue and your customer lifetime value (CLV), which—of course—is great news for you and the long-term health of your business.
Is a customer loyalty program right for your brand?
Loyalty programs aren’t a one-size-fits-all strategy. Whether you choose to create one depends on your business.
Some niches are more prone to one-off purchases or ones that you only make every few years (e.g. cars, household appliances, furniture, etc). While you may still want to investigate a loyalty program, you may need to focus more on acquisition than businesses in other niches.
Brands selling products that customers are more likely to purchase frequently—like food and drink, office supplies or stationery, electronics, beauty, fashion, and essentials—would almost certainly benefit from setting up a loyalty program.
It may take some trial and error to work out the best balance for your business between acquisition and retention, but the important word here is balance. You’ll want to strategize about how to improve your acquisition and retention metrics, but the amount of time and resources you dedicate to each may differ from other businesses.
If you want to create a loyalty program—or improve the one you’ve already set up—read on to discover the different types of programs you may want to consider plus some stellar examples of each from other brands.
How does customer loyalty vary by country?
But before I dive into the insights, you might find it helpful to know how common loyalty programs are across different countries—because how you design or describe a loyalty program to your customers within the US or UK, for example, might differ for your customers in mainland Europe.
This graph suggests loyalty programs are still growing in some European markets like France and Spain, while countries like Germany and the UK have greater adoption.
As you think about investing time and resources in a loyalty program, use this data to inform your plan. If you have customers across all of Europe, for example, you might want to trial a loyalty program in the UK first, since people there are more familiar with the concept.
On the other hand, if your business only operates in France, spend time educating your customers about the benefits they receive with your exceptional customer loyalty program. France might not be a front-runner for loyalty programs yet, but that could mean you have an opportunity to start a movement.
Of course, this data doesn’t represent your exact customers, so keep a close eye on your metrics by country to see whether your program might need localization.
Alternatively, you could always ask your customers whether they’d join a loyalty program if you created one and what kinds of rewards they’d like to see most.
Examples of loyalty programs to boost customer retention
Take a look at these seven ideas and examples below and get inspired by brands that are seeing success with their loyalty programs across the globe.
1 | Cashback
Cashback schemes aren’t exactly new—after all, credit card companies have used them for years—but they’re slowly gaining traction with ecommerce businesses, as well.
You could follow in the footsteps of other ecommerce brands and offer your customers credits after they’ve bought from you, which they can then reinvest in future purchases with you. This is a win-win because your customers get added value and an incentive to buy from you again.
Bombinate, curators of quality artisanal goods ranging from clothing to homeware and furniture, offer their customers credits once they’ve bought from the brand.
Customers receive five percent of their purchase total back each time they shop—as credits to use across Bombinate’s website—and they can check how many credits they have by simply logging into their account.
Bombinate also occasionally promotes extra perks and offers related to their cashback loyalty program.
When I was writing this blog, for example, Bombinate’s website had a banner across the bottom of it saying: “Get 20% back in Bombinate credits at checkout ⏳ This week only.”
I later saw this same offer on my Facebook feed, which suggests Bombinate is also using a slick retargeting strategy to entice customers into spending, earning credits, and then spending again. Very cool—and certainly attention-grabbing!
You could offer credits for every purchase made, or you could include a disclaimer where customers only receive credits after they’ve spent a certain amount with you—whatever makes the most sense for your business and profit margins.
Want to learn more about Bombinate’s digital marketing strategies?
2 | Points
Point-based loyalty programs are some of the most commonly used retention programs.
Here, customers receive points for completing certain actions—like placing an order, signing up for an account, referring a friend, having a birthday, leaving reviews, following you on social media, or sharing their experiences on their own social channels—which they can then put towards future purchases with your brand.
Once again, gamification is key! Make it relatively easy and fun for your customers to earn points to keep them interested long-term.
Innermost, a UK-based nutritional supplements brand, has created a relatively straightforward rewards program where customers can earn points when they spend a certain amount, follow the brand on social media, sign up for the brand’s newsletter, refer a friend, and more.
125 points for following the brand on Instagram? Easy. 1,000 points for referring a friend? Exciting—because that’s a full £5 off my next order with them!
REN Clean Skincare, an organic beauty brand, has a similar points-based program. But a standout part for me is how easy it is to see exactly which rewards customers can receive in exchange for their points:
Not only can I quickly see how much I can get in vouchers when cashing in my points, but REN Clean Skincare has also added a handy reference guide to show me what that might look like as an actual product. This really helps to add tangible value to this digital shopping experience.
3 | VIP customer benefits
Your VIP customers are the people who’ve either spent a certain amount of money with you or those who’ve purchased a specific number of products over a set period.
By creating a VIP customer list, you can strategically offer higher value rewards when they will have the greatest impact on customer loyalty. VIP offers provide a feeling of exclusivity to people who already love your brand—plus it might encourage a sporadic shopper to make additional purchases to get into the club.
You could even link your VIP segments to a tiered loyalty program where the more money customers spend with you or the more orders they make, the more valuable their rewards become.
Take the beauty brand, Glow Recipe, for example. They have a tiered rewards program where customers receive different perks—or additional ones—as they accumulate more points with the brand.
I particularly like that not all of their rewards are monetary-based, such as access to a tester panel, early access to sales and promotions, and exclusive invites to events.
Underneath, you can see a bold call to action (CTA) where customers can log into their account to check their “glow rewards status.” This clever use of the word status makes their program sound exclusive or like you’re working towards a particular rank or position, which is perfect for a tiered loyalty program just like this.
Skinnydip London, a popular lifestyle and accessories brand, is another business to take notes from.
Just like Glow Recipe, Skinnydip London has a tiered rewards program where the perks get more and more exciting as customers move up the ranks.
I especially like how Skinnydip London has used mini-stories to describe each tier, so customers can imagine themselves getting closer and closer to “take off,” while enjoying some amazing benefits along the way.
Want to learn more about Skinnydip London’s marketing strategies?
4 | Refer-a-friend
Refer-a-friend schemes—where retention meets acquisition.
With this type of loyalty program, you can reward your loyal customers while gaining new ones at the same time. For all my fellow marketers out there wearing many hats: Hitting two goals at the same time sounds pretty great, right?!
You could offer your customers discounts, credits, or even freebies for referring their friends. The best bit is that you don’t have to shell out a single cent unless their friend actually buys something.
You could even include a few caveats that they have to spend over a certain amount for the referral to qualify.
Take a look at Ekster, the innovative smart wallet brand taking the world by storm. Their referral program allows their customers to send a $15 store credit to their friends and they’ll get the same reward if their friend makes a purchase.
Ekster’s customers can only redeem their referral credits on orders over $100, which the brand has clearly highlighted in their terms and conditions at the bottom of their referral page. This is transparency at its best and also helps to protect Ekster’s profit margins and average order value (AOV).
Ekster also created a brief explainer video, so they can also promote their loyalty program across their marketing channels.
5 | Subscription model
If your products support it—like if you sell consumer packaged goods (CPG), for example—consider offering your customers a subscription service.
This will enable them to receive their favorite products from you regularly without having to check out each time, which could also help you increase your repeat purchase rate.
Grind, a coffee subscription business, initially started out as a range of espresso bars, cafes, and coffee shops across London, England.
But when the pandemic hit and their business faced a loss in revenue following lockdown restrictions and stay-at-home orders, they started offering their customers the chance to enjoy Grind’s unique coffee blend at home. Customers can buy Grind’s coffee pods as a one-off or as a subscription.
This change in strategy and business model meant Grind could still achieve an incredible 675 percent increase in year-over-year revenue growth while 71 percent of their revenue is now from repeat business.
Want to know what other strategies contributed to this incredible growth?
While subscription models work perfectly for CPG brands, other businesses have proven the success of them in industries like fashion and homewares.
PURELEI, a Hawaiian-inspired jewelry brand from Germany, sells their jewelry as one-off pieces, but also offers a subscription service called the “Mahina Club” where their jewelry-loving customers can receive a beautiful surprise piece every month.
Alongside these exclusive pieces of jewelry, PURELEI’s Mahina Club members can also look forward to exclusive pre-sale access, discounts, and competitions.
Want more insights from this innovative jewelry brand?
6 | Paid memberships
Similar to subscription models, you may also want to consider paid memberships where your most loyal customers can pay to receive exclusive benefits from you.
The world-renowned lingerie brand, Shapermint offers a low-cost monthly membership (it’s less than $5 per month) to their customers. Members receive exclusive benefits like a personal stylist, free shipping, a 90-day money-back guarantee on their orders, and access to Shapermint’s online VIP community.
Mens’ cosmetics brand, Beardbrand, has also set up a paid membership option for their customers—but with a unique spin to offer their customers the chance to receive additional exclusive benefits without having to pay extra.
Customers can pay $90 upfront to join their community, which includes benefits like free domestic shipping and members’ only forums, or they can gain lifetime access for free once they’ve either purchased directly from Beardbrand three times or spent over $150 on a single order.
This is a great interim option if you’re worried your customers might not pay for this type of membership, but you still want to try it out to gauge interest among your customer base.
7 | Give-back and charity programs
Another type of loyalty program that might provide an additional incentive for customers to return to your brand is a give-back or charity program. These programs—sometimes called cause marketing—also have the added benefit of contributing to your corporate social responsibilities.
You could offer to donate money or products for each order you receive from your customers, or you could set targets and give back to the local community or a charity you care about once you’ve reached your goals.
You can even get your customers more involved with your give-back program by prompting them to choose a charity you’ll donate to when they place their order.
This is how the lingerie brand, Playful Promises run their give-back program. Their customers can choose between three charities that the brand will donate to once their order has gone through. At the time of writing, you could choose between a mental health charity, plant-a-tree scheme, or cancer charity.
This type of program could be something you offer as additional value for shopping with you, or you could even base your entire business around the idea of giving back—like the cosmetics brand Soapbox does.
Soapbox partners with underprivileged communities to provide them with a bar of soap for every purchase a customer makes with them.
Once again, customers can get a more “hands-on” approach by scanning a code on each product to enter their email and see exactly which initiative their purchase helped Soapbox to support, as well as more information about it.
Loyalty perks don’t always have to be a hit to your bottom line
A loyalty program is one of the best avenues you can take to help you encourage repeat business and long-term loyal customers.
The perks you offer don’t have to be a direct hit to your bottom line.
In fact, a recent study by Yotpo found that over 60 percent of respondents wanted early access to sales, over 50 percent wanted early access to new products, and nearly 39 percent wanted offers and recommendations to be tailored to them.
As long as the perks and rewards you choose will be a valuable addition to your customers’ experiences with your brand, you’ll likely be on to a winning customer loyalty program.
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