Loyalty programs have been around for a long time. Look at Macy’s and Sephora. These businesses are thriving, and you can thank—at least in part—their loyalty programs and customer service.
Rewards programs are a money-making machine for online businesses. Loyal customers spend 67% more than new shoppers, and they’re 90% more likely to choose your brand over competitors.
Why waste thousands on ads to attract strangers when you can turn existing buyers into raving fans?
Let’s break down why you should start your own loyalty program and how to do it.
Why Loyalty Programs Are Every Online Business’s Secret Weapon
Turn casual shoppers into superfans who just can’t stop spending at your store. Here’s why it works so well.
The math doesn’t lie:
- It’s 5x cheaper to keep a customer than to find a new one.
- Members of loyalty programs generate 12–18% more revenue yearly for brands.
- 75% of consumers say they’d switch brands for a better rewards program.
Customers are now accustomed to getting a little something extra when they shop. If you’re a stickler about offering 5% for new customers or those coming back for more, then you’ll never see the retention you want.
Real-world magic (steal these ideas):
- Starbucks Rewards turned coffee runs into a game. Customers earn rewards (“stars) for every dollar spent, unlocking free drinks, birthday treats, and even early access to pumpkin spice lattes. Result? Over 30 million active members who drive nearly 60% of Starbucks’ sales.
- Sephora’s Beauty Insider uses a tiered system: spend more, level up. Top-tier “Rouge” members get free makeup classes, exclusive products, and private sales. This program fuels 80% of Sephora’s annual revenue.
But here’s the secret most miss:
Customer loyalty programs aren’t just about discounts. They’re about making customers feel valued. These programs are part of a much wider customer service experience. When you reward customers for choosing you, they’ll:
- Stick around longer (even if prices rise).
- Recommend you to friends (free marketing!).
- Forgive the occasional shipping delay or out-of-stock item.
The bottom line?
In an era where customers can ditch you with one click, a loyalty program is your best defense against competitors. The goal is about building relationships that turn shoppers into your brand’s loudest cheerleaders.
CONNECT WITH A PROCESSOR THAN CAN HANDLE YOUR VOLUME
Step-by-Step: Build Your Loyalty Program
Ready to create a loyalty program that keeps customers coming back? Let’s break it down like a TikTok tutorial—fast, fun, and foolproof.
Option 1: DIY Your Program (No Tech Skills Needed)
- Set Goals That Actually Matter: Don’t just say “make customers happy.” Get specific.
- Example: “Boost repeat purchases by 30% in 6 months” or “Get 500 sign-ups in 30 days.”
- Pro tip: Start small. A local coffee shop might aim for “100 stamp cards redeemed in 3 months.”
- Figure Out What Makes Your Customers Tick
- Poll shoppers: Get some customer feedback by using Instagram Stories or email surveys to ask, “What rewards would make you scream?”
- Spy (nicely) on competitors: Notice gaps. If rivals offer 10% discounts, one-up them with “free shipping after 3 orders.”
- Think beyond discounts: Early access to sales, birthday freebies, or VIP customer status work wonders.
- Keep It Stupid Simple: Complexity kills loyalty. Borrow these brain-dead-easy ideas:
- “Buy 5 coffees → free latte” (stamp cards still work!).
- “Spend $100 → $15 off next purchase” (instant gratification!).
- Golden rule: If a 12-year-old can’t explain it, simplify it.
- Launch & Shout About It
- Email blast: “Psst…join our rewards club & unlock secret perks!”
- Social media: Post a reel showing how points turn into prizes (“This could be YOU!”).
- Website banners: Add a pop-up like, “Wait! Claim your free reward before you go.”
Option 2: Use a Rewards Service (Fast & Easy)
Why wrestle spreadsheets when apps can do the work?
- Smile.io (for beginners):
- Launch a points program in 15 minutes.
- Example: A candle shop gives points for purchases, reviews, and social tags. Customers redeem points for free gifts.
- Stats: Brands using Smile.io see up to **20% higher revenue** from members.
- LoyaltyLion (for data nerds):
- Track customer habits like “90% of VIPs buy every 2 weeks.”
- Send automated rewards: “You’ve earned 500 points—here’s $10 off!”
- Pro move: Offer “double points” weekends to spike sales.
Why using a rewards service rocks:
- Automatic tracking: No manual math.
- Rewards options: Let customers choose between discounts, donations, or exclusive products or services.
- Instant setup: Integrates with Shopify, WooCommerce, and more.
Whether you DIY or use a tool, loyalty programs are like video games for shoppers. They keep hitting “replay” to level up.
5 Ways Loyalty Programs Make You $$$
Let’s dive right into your profit-making future.
1. Customers Spend More → Your Wallet Gets Thicker
Loyal shoppers spend 25% more than newbies. Casual buyers are the new ATMs.
- Example: A coffee shop’s “Buy 5, Get 1 Free” program boosted average order values by $8. Members added more items to hit their reward goal.
2. Cheaper Than Chasing New Customers → Save $$$
Keeping a customer costs 5x less than hunting new ones. Loyalty programs? They’re your financial bodyguard.
- Fact: Brands using rewards programs see 18% lower marketing costs because they’re not wasting cash on ads for strangers.
3. Turn Shoppers Into Hype Squad → Free Marketing
Reward referrals and watch fans do your advertising.
- Pro move: Give 2X points for every friend they refer. A jewelry brand saw 40% of new sales come from member referrals this way.
4. Learn Their Secrets (Legally) → Spy Smarter
Use purchase data to send laser-targeted deals.
- Example: “We noticed you love skincare—here’s 20% off!” texts led to a 35% open rate for a beauty brand.
5. Crush Competitors → Be the Shiny Object
Offer VIP perks rivals don’t have.
- Hot tip: A bookstore’s “Members-Only Early Access” to signed copies made their loyalty program 3x more popular.
Loyalty programs aren’t charity—they’re profit engines. You’re not giving away free stuff; you’re buying customer love (and their credit card details).
BETTER SECURITY FOR YOUR CUSTOMER DATA
Why Start Today?
79% of shoppers admit loyalty programs lock them into brands. Your rivals are weaponizing this fact right now. The sooner you start, the better.
The race you’re already losing:
- 85% of consumers stick with brands that have loyalty programs vs. those that don’t.
- Brands without programs see 3x higher churn rates than those with rewards systems.
- 90% of companies are overhauling their loyalty programs by 2025 to offer hyper-personalized perks (think: AI-driven rewards, eco-friendly tiers).
Real-world FOMO:
- Sephora’s Beauty Insider drives 80% of its revenue from members. Wait too long, and your skincare addicts become their VIPs.
- H&M’s loyalty program grew 71% YoY, hitting 120 million members—stealing market share from slower competitors.
The “snooze, you lose” math:
- 5% higher retention = 25-95% profit spikes.
- Brands launching programs now see 2.5x faster revenue growth than those delaying.
While you’re hesitating, competitors are rolling out TikTok-worthy rewards, gamified tiers, and member-only drops. Start today, or watch your shoppers join their club tomorrow.
Let’s Get Started!
Goals + simple rewards = happy customers.
You’ve got the blueprint, now it’s time to launch your loyalty program like a pro. Don’t overthink it: Starbucks started with paper punch cards, and Sephora built an empire by rewarding makeup lovers.
Your rewards program should be part of your already great customer service. Meet customer expectations and provide the customer experience everyone wants.
Don’t wait for “someday.” Your customers are ready to fall in love with your brand—give them a reason to stick around.
Leave a Reply