How to Drive E-commerce Growth Using Loyalty Programs?

90% of businesses Belives in loyalty program

E-commerce is a highly competitive Industry, where every brand fights to get customers’ attention, getting in front of them and building engagement.

However, those who have loyal customers for their brand always win the battle.

According to statistics, 75% of customers prefer those companies which offer loyalty programs and rewards.

So, if you want to stand out from the competition and take your brand to the top, then you need to build loyal customers.

This is where Ecommerce Loyalty Program can work wonders for your business. It helps you connect with your customers at a personalized level, attract customers, make them loyal to your brand and boost sales.

In this guide, we will explore everything about ecommerce loyalty programs, types of loyalty programs, how businesses are taking advantage of these programs and metrics to determine the value of loyal customers.

So let’s dive in!

What Are Ecommerce Loyalty Programs?

Ecommerce loyalty program is a marketing strategy used by eCommerce brands to attract new customers, nurture existing customers and give them rewards. It’s like a premium membership for special customers to get special deals, discounts, rewards, cashback, etc.

The reason behind offering loyalty programs is that it brings more new customers, encourages them to shop more, increases revenue and builds loyal customers faster; overall, it helps businesses to grow.


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In loyalty programs, brands offer special deals, coupons, free shipping, discounts, rewards, extra cashback and much more that encourages customers to buy more products, repeat purchases and build loyalty towards the brand.

The loyalty program for e-commerce brands used to:

  • Attract new customers
  • Increase repeat purchases
  • Increase word-of-mouth advertisement
  • Build loyal customers
  • Improve customer retention
  • Increase the customer lifetime value

Building a good loyalty program can drive desired results for e-commerce brands.

Why Ecommerce Brands Require Loyalty Programs?

Loyalty programs play a crucial role in the e-commerce industry, and now almost all e-commerce businesses are adopting this strategy to grow their business.

  • 90% of businesses have some loyalty program.
  • 75% of companies prefer those brands which offer rewards.
  • 77% of customers say loyalty programs encourage them to continue buying from a brand.
  • The loyalty program market is worth $4.43 billion.

Why Ecommerce Brands Require Loyalty Programs

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These stats clearly show the role of loyalty programs and how brands leverage the power of loyalty programs to grow their business. However, you need to make your ecommerce store attractive and user-friendly so that they can make their buying decisions faster and for this you can consider ecommerce development services to build a modern ecommerce store for your brand.

What Are the Benefits Of Ecommerce Loyalty Programs?

Here are some amazing benefits of using loyalty programs in your e-commerce business:

1. Faster Customers Acquisition 

The first benefit of running a loyalty program, i.e., getting new customers in your business. By promoting the new loyalty program everywhere, you can attract potential customers to your brand and give them exciting offers to nurture them. Getting new customers becomes so easy with the help of loyalty programs. Moreover, by integrating loyalty program data with inventory management software, businesses can identify loyal customers, personalize their shopping experience, and offer exclusive rewards or discounts based on their purchase history.

2. Strong Brand Value

Customers love to repeat purchases from the brand, which regularly offers amazing discounts and special offers. By running loyalty programs, you can get lots of customers’ attention, which helps you grow your brand visibility and value in the market. If you have a large base of customers, then it automatically increases sales, promotions, value, and scalability.

3. Boost Sales and Repeat Purchases

Ultimately every ecommerce brand is promoting itself to make sales and revenue. By implementing the

loyalty program, you can target new and old customers and encourage them to make sales and get rewards. Overall, it boosts profits and makes loyal customers for your brand that keep making purchases from it. 

4. Increase Customer Lifetime Value (LTV)

In an e-commerce business, the customer lifetime value is a key factor that defines any business’s success. Every brand wants to keep its LTV as high as possible and keep its loyal customers forever. One of the easiest ways to increase the lifetime value of your customer is by implementing a loyalty program and encouraging customers to get exciting rewards after purchasing products.

5. Enhance Customers Experience

Loyalty programs are such eye-catching offers that enhance the customer experience while buying the products. Try to enhance the customer buying experience by offering heavy discounts on your products, extra coupons, sales and future rewards to make customers feel happy and motivate them to make more purchases.The more customers are satisfied, the faster your brand grows. So you should hire ecommerce developers and build an ecommerce store which gives a seamless experience to your customers during the loyalty program.These are five major benefits that every ecommerce business wants to grow exponentially.

What Are the Types of Ecommerce Loyalty Programs?

There are so many types of loyalty programs run by ecommerce brands. Some of the most results-driven programs are:

Points Programs

Points Programs are so common, but most results-driven programs in e-commerce business. Customers earn points based on purchases or referrals in this

loyalty program. These points can be redeemed as discount coupons, free products, and other incentives. It encourages customers to make repeat purchases to earn more points.

Paid Programs mean when your e-commerce brand offers any subscription-based program requiring customers to pay for a membership and get exclusive benefits and rewards inside the program. These subscriptions include free shipping, early access to sales, premium support, special discounts, and much more. It makes the customer feel premium and motivated to keep with the brand for the long term. These premium customers can easily spend many purchases once they become your loyal customers. 

Tiered Loyalty Programs

Tiered-based loyalty programs are specially designed and divided for customers based on their spending and customer loyalty. This program has different levels/tiers with unique rewards and offers. It makes the customer feel more premium if they’re a regular brand customer by giving top access, big rewards, free tickets, and much more. On the other hand, it also encourages some customers to spend more to get such exciting benefits. By implementing tiered-based loyalty programs, businesses get numerous benefits in getting more customers, repeat purchases, increased LTV, and high revenue. 

Universal Loyalty Programs

It’s a new type of loyalty program gaining popularity rapidly. Now e-commerce brands offer unique perks and benefits that attract every customer to become loyal to your brand. Such as,

  • Two-day shipping
  • Early access to premium membership
  • Discounts on every product

These are some universal benefits that every customer wants and encourages them to shop and add to the list of loyal customers. If your e-commerce brand can offer these unique benefits and perks, you can stand out your brand and attract various customers.

What are the Metrics to Determine the Value of Loyal Customers?

Here are some key metrics that every e-commerce brand can use to determine the value of loyal customers:

  • Retention Rates: How long a customer remains active for your business. So that you can identify whether it’s loyal customers by comparing based on your most loyal customers’ retention rates.
  • Price Sensitivity: When it comes to loyal customers then, price is not an issue for them. They look for a product and its value to make the buying decisions.
  • Annual Spend: Analyze how much amount your loyal customers spend annually.
  • Lower Marketing Cost: Loyal customers require less marketing or promotional efforts. When you engage with these customers, you’ll immediately get a response at a higher rate.
  • Referrals: Loyal customers are the best advertisers with word-of-mouth. They drive various new customers for your business. So keeping your loyal customers happy and giving exciting rewards is essential.

To check the lifetime value of your customer, here’s the formula:

[LTV = AOV x Transactions x Time]


  • AOV = Average Order Value
  • Transactions = Average no. of transactions per period (month or quarter)
  • Time = Average no. of periods (month or quarter) a customer buys from your brand

That’s how you can identify the lifetime value of your loyal customer.

Some Real-world Examples of Loyalty Programs

Amazon Prime

It’s the most successful loyalty program and contributes to Amazon’s success. Amazon Prime is a subscription-based model which allows its loyal customers to get exciting rewards, early access to sales, free shipping, entertainment and much more.

Starbucks Rewards

Starbucks’ loyalty program allows customers to earn more rewards and get a free drink, food and membership card. It builds strong customer engagement and leads to becoming loyal customers.

Sephora Beauty Insider

Sephora Beauty Insider runs a special loyalty program that offers premium members free beauty classes, product samples, and much more based on loyalty and spending.


Implementing an exclusive loyalty program can drive amazing results for e-commerce brands. Whether it’s increasing customer base, repeat purchases, building loyal customers or reducing marketing costs. If you want to grow your e-commerce brand, implementing a loyalty program can do wonders for your business.

We hope this guide helps you know the role of loyalty programs and why you should implement them in your e-commerce business. Still, looking for personalized loyalty programs? Our experienced industry experts are here to help, with vast knowledge, we can customize your loyalty program as per your needs and brand. 

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