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05 Ways A Loyalty Program Can Grow Your eCommerce Store

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Guest Post Article: Contributed by Experts from Gameball

In today's world of wide-ranging online shops and businesses, it's important to have something that not only can attract customers but also, and more importantly, retain your customers and keep them coming back to you rather than your competitors.

This 'something' is a loyalty program.

Why Do You Need a Loyalty Program?

A loyalty program is a program that creates a sense of loyalty among your buyers and customers. It offers benefits and rewards that entice them to keep buying from you instead of going to your competitors.

Such programs build trust between the business and the customer, making customers more willing to buy from a certain business, that is your business.

This becomes even more important when you have an e-commerce business, where the entire experience takes place online. There is no longer human-to-human contact, so everything is online.

01. Customer loyalty stats

But what do the statistics about customer loyalty and loyalty programs have to say?

According to the e-commerce marketing platform Yotpo, around 90.2% of consumers believe they were "equally or more brand loyal" in 2019 compared to 2018.

In addition, Yotpo's 2019 annual brand loyalty survey examining American consumers' sentiment towards brands found that 61.08% of consumers were loyal to 1 to 5 brands, whereas 26.19% were loyal to 6 to 10 brands.

For more than 10 brands, Yotpo's data showed that only 5.68% were loyal to 11 to 20 brands.

This means that your brand not only needs to stand out, but its benefits and loyalty programs also need to stand out too. This data shows that customers tend to be loyal to a select number of brands. In other words, they don't try to be loyal to all the brands or companies they buy from.

When asked to define "brand loyalty," Yotpo found that 67.8% of consumers that took part in its survey "overwhelmingly characterized it as repeat purchasing," whereas 39.5% described brand loyalty as "love" for the brand.

Moreover, 37.7% viewed brand loyalty as "preference despite the price."

loyalty program insights

Yotpo's 2019 data also showed that almost 78% of consumers said that a product is what inspired their loyalty towards a brand, whereas nearly 63% said price was a major factor, while 26% said it was customer service and 22.3% said their loyalty came from a loyalty program.

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This, in a way, shows that there isn't a great competition in loyalty programs and that there is great room for creating a loyalty program that works and attracts customers.

"It still takes a lot of purchases to cultivate loyalty," Yotpo noted, indicating that before shoppers would consider themselves loyal to a brand, they needed to buy at least 5 times from the same brand or company (36%).

Around 33% said they needed to buy at least 3 times, while 17% said they needed to buy at least 4 times from the same company before they could decide if they were loyal or not.  

The 2019 data showed "continued strong brand loyalty among consumers [which] supports the idea of a brand renaissance, the same phenomenon fueling the rise of direct-to-consumer and growth of the modern e-commerce industry," Yotpo CEO and co-founder Tomer Tagrin said when the report was released in November 2019.

"But the study also reveals that loyalty is hard-won. Most consumers consider themselves loyal to only a handful of brands, he stressed.

Moreover, a 2018 report by McKinsey and Company, indicated that "consumers who participate in top-quartile loyalty programs are 80% more likely to choose the brand over competitors and twice as likely to recommend the brand to others."

Reasons to Create a Customer Loyalty Program

1. Customer retention

Having a loyalty program isn't new. There have been different types and versions of customer loyalty programs over the years as businesses experiment with the idea of having return customers.

Recent data, by Bain and Company, shows that even a slight increase in the number of retained customers (by around 5%) can boost profits by 25% to as much as 95%.

Who wouldn't want higher revenues and profits from existing customers?

2. Better understanding through data

Having a good loyalty program can help you get more information from your customers (in a good way). Customers are often wary about the amount of information they share online, especially with businesses. But with a loyalty program, you can gather some data in a bid to segment and understand your customers better. 

Then, you can compile this data as buying habits and use it to generate more sales.

So how can you get this data?

Once a customer begins using your loyalty program, you can ask them for certain information as part of building their profile. Another way is to get them to fill a survey, in exchange for loyalty points. This method allows you to ask them for information on their demographics, locations, likes and dislikes, without looking too nosy. 

Understand customer better with loyalty program

3. Creating relationships with your customers

With the entire buy-and-sell process taking place online, building relationships can either be a two-way street or a dead-end. You want the former not the latter.

With your data ready, you can create personalized moments for your customers, which in turn will show the customer that you care and that you are giving them 'special treatment,' which makes them feel appreciated and more interested in what your brand or business has to offer.

According to Steve Olenski, a senior creative content strategist at Oracle Responsys, having a loyalty program enables you to "not only improve customer appreciation of your business, but you also increase the chances that existing clients will share this joy with those close to them."

4. Increase Sales & reduce long-term costs

Using a customer loyalty program allows you to build trust with existing customers and upsell them. They are already familiar with you so they are more likely to buy from you again and again.

"Customer loyalty also fosters a strong sense of trust between your brand and customers — when customers choose to frequently return to your company, the value they're getting out of the relationship outweighs the potential benefits they'd get from one of your competitors," says HubSpot.

Good loyalty program can increase sales

Yoav Vilner, an advisor and external CMO confirms this in a statement to Forbes. He says that after managing and operating his startup marketing agency, he "discovered that retaining and nurturing existing clients had much better ROI than on-boarding new ones because you already have existing manpower dedicating time on these operations, and don't need to initiate a new process."

These customers, who are already working with you and paying you monthly are already familiar with you, which means "you can offer more services because of the trust you’ve built [with them], Vilner explains, noting that "Getting the first dollar from a new client is much more time-consuming.”

5. Attract new customers

Even though attracting new customers can be costly, this can be mitigated to an extent when you have a good loyalty program for your e-commerce business.

It's true, and I've already mentioned that retained customers can mean from 25% to 95% in higher sales. However, having an e-commerce-based loyalty program can attract new customers. How? Some of your competitors might not have a loyalty program at all or they have an old obsolete version.

By creating an interactive program with several tiers and advantages for your customers, new ones are likely to opt-in for what you have to offer.

Successful customer loyalty program example

One of the world's most successful customer loyalty programs is the one done by Sephora. According to CoreSight, Sephora's Beauty Insider rewards program has over 17 million loyal members, who in turn represent roughly 80% of the personal care and beauty stores' chain's annual sales.

Loyalty Program examples

"One of the biggest barriers for a large swath of Sephora customers is price—Sephora products aren’t cheap. Beauty Insider members can redeem their rewards points for things like gift cards and discounts, helping to offset purchase prices without devaluing the products," according to a Shopify article.

In addition, Sephora's loyalty members reportedly can redeem points for exclusive items such as limited edition products or in-store beauty tutorials." 

Couple Your Efforts with a Referral Program

An additional means that can support both your loyalty program and your business is having a referral program. You can give rewards to your customers who refer you to others, making it a win-win situation.

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So how do you build a successful loyalty program?

  • Bear in mind that customers are people (not wallets)
  • Offer incentives and benefits so that customers would want to join your loyalty program
  • Create a tiered program that allows customers to level up when they accumulate points
  • Remember that a loyalty program is about giving and taking. You can't take from the customer 24/7, you have to be willing to give a bit.
  • Create a referral program  so that when customers refer you to friends and family, they get rewards, freebies, and discounts


There are many benefits to having customer loyalty programs. And as time passes, companies and e-commerce businesses need to keep up with their customers' needs.

"To win, brands need to stay at the top of their game by offering amazing products at a fair price and creating valuable experiences worth coming back to. The survey shows that even loyalty programs need to be exciting to drive engagement," says Yotpo CEO and co-founder Tomer Tagrin.

If there's anything we have learned at Gameball about customer loyalty programs, it's that it's not a take, take, take relationship. Those never thrive.

Loyalty Program example

Loyalty programs are a give-and-take process or mechanism. As an e-commerce business, you need to give a bit to your customers so they can give back by being loyal to you and your products and services.

You can create this sense of loyalty amongst your current customers and attract new ones when you install the Gameball app on Shopify.

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Further Reading: 

  • eCommerce Best Practices For A Shopify Store That Converts: Read More 
  • Shopify Pricing - What's Your Investment: Read More
  • Shopify Basic Pages and How They Can Help You Build An Online Store Business: Read More

About the author:

Nada Sobhi is the head of content at Gameball. She's a copywriter, digital marketer, book blogger, and avid reader. When she's not working, you can find her buried in a book or 3!

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