A customer loyalty program, often called a rewards program, is telegram database a customer retention strategy that focuses on repeat purchases.
Customer loyalty programs are designed to incentivize customer actions. Programs can offer many types of benefits such as rewards, points, cash back, gifts, free shipping and more.
Next we will see the benefits of customer loyalty, including improved add to cart rates, conversions, and AOV.
Why is customer loyalty important in eCommerce?
Returning visitors dramatically increase profitability.
In our study on New vs Returning customers, we found that retained visitors
Converted 73.72% more than first time visitors
Spent 16.15% more per transaction
Further studies confirmed these benefits of customer loyalty.
One study by Harvard Business School found that "Loyalty leaders - companies at the top of their industries in NEt Promoter Scores or satisfaction rankings for three or more years - grow revenues roughly 2.5 times as fast as their industry peers and deliver two to five times the shareholder returns over the next 10 years."
And another study by ZenDesk found that 75% of customers are willing to spend more from companies that give them a good customer experience, while 50% will switch to a competitor after one bad experience.
50% will switch to a competitor after one bad experience
Image Credit: Zendesk's 2021 Customer Experience Trends Report
How to build customer loyalty?
There are two major types of customer loyalty. The first is transactional loyalty, and the second is emotional loyalty.
How to build transactional customer loyalty
The first is transactional loyalty. This type of loyalty is rational in nature. Customers perceive it is in their best interest to stay with this company based on repeated past experiences.