If you’re an online business owner, you’re probably aware of how important it is to engage potential customers. Keep your customer loyalty levels high, and you will know the importance of a customer retention plan.

If you’re not aware of why this is important, here’s the short version – an engaged, loyal, and growing customer base equates to more enormous profits and steadier revenue.

But, let’s break it down even further.

Customer loyalty is the willingness of a customer to perform certain activities (sales, referrals, etc.) for a brand repeatedly. So, how do you generate customer loyalty? 

How does an e-commerce company make the right choices and put forth their best foot forward to successfully organize and execute a customer loyalty program?

Let’s break it down with the overall goals of providing fantastic customer service, generating high levels of customer satisfaction, a positive customer experience, and leaving the end-user with a feeling of value from the offered products and services they’ve purchased. 

Goal 1: Make Customers Happy to Increase Your Revenue

How can the customer loyalty program increases revenue? It’s a fair question, and for some, the answer isn’t apparent. 

Knowing that the primary purpose behind starting this type of program is to engage customers, they feel valued and happy to purchase more and entice others to buy. Experienced e-commerce marketers and retail business owners know, understand, and embrace this simple fact. 

Summing up, remember these points:

• Loyal customers convert or spend their money with brands they like more than other brands
• They usually spend more in the long run and tend to make larger single purchases when compared to other one-off customers
• Loyal customers are frequently happy to highlight their positive experiences and give referrals to your product/services to their friends and family members (i.e., become a brand ambassador)

Goal 2: Grow Your Customer Base

As stated above, a Customer Loyalty Program has immense benefits that help drive word-of-mouth advertising for your product or service. Word-of-mouth referrals and publicity are highly effective in creating new customers. 

People will tend to trust a friend or family member vs. advertisements. Think about the last time you visited a restaurant or saw a movie just because someone you know recommended it!

How does that translate for eCommerce or online retail business owners? Well, a couple of quick points and then some exciting statistics. 

Referred customers, because they already have a level of trust that referred them, tend to convert higher. They also tend to be more loyal once they have coverts from a lead to a customer. It simply means they are more likely to become repeat customers.

According to a Business Insider Intelligence report, 48% of US eCommerce in the fourth quarter of 2015 comprised repeat customers. That translated to over 2.7 Billion dollars and was on the incline from there. 

An interesting fact that if you consider just how vast the online market is for nearly any service or product, it indicates the trust of customers towards a specific brand. The value they receive outweighing the potential benefit related to low price or unique product and brand. 

As you can probably see by now, there’s a tremendous expanding circle developing here. Generate new customers, engage them to make them feel special, refer others, engage new customers to make them feel special, refer others, and so on.

To put it another way, a Loyalty Program creates Brand Ambassadors and generates other “soft revenue.”

What is “soft revenue”?

Soft revenue is revenue that happens to be in the form of lowering expenses. Acquiring new customers via advertising can be one of the highest costs a company has both online and offline. 

Therefore, if eCommerce owners have the chance to engage and mobilize their current customers, it helps to recruit new customers. 

Their loyal customer base can have a chance to become brand ambassadors. Even with incentives for generating referrals considered, the overall cost is still lower because the actual word-of-mouth part is free. 

The cost of a loyalty program tends to lower expenses and increase income or generate more soft revenue. There’s a right mix of options, and each depends upon the individual business.  

How NextBee adds value to brands for their loyalty campaigns?

Here at NextBee, we focus on creating successful customer loyalty programs tool and one of the most robust analytical systems ever made. Eventually, it helps brands to measure almost every metric for loyalty campaigns. 

It means that not only can we suggest what to start with for loyalty rewards, but we can analyze current rewards as well. Using Machine Learning, brands can predict the next best incentives to offer to clients.

It will certainly keep them engaged to refer more customers with the help of attractive rewards and incentives. They can eventually become loyal customers who can further assist in referring to more customers. 

If you want to learn more ways to grow your business through an eCommerce or Retail Customer Loyalty Program, contact NextBee’s marketing specialists for all your business requirements.