Loyalty Programs: Why Brand Allegiance Is More Important Than Ever

Young woman happily online shopping with a loyalty program

Your best customers are your brand’s biggest fans. They don’t just purchase your products or services, they also tell all their friends about how much they love your e-commerce business. They are your cheerleaders and your word-of-mouth marketers. And customers who know and trust your brand are more likely to also trust you with their data. In a world where privacy concerns and regulations mean that third-party cookies are no longer a reliable source for customer insights, your business will require access to zero- and first-party data to drive your decisions around marketing and customer experience. US marketers have already recognized the need to invest in first-party data, and 57% of them plan to incentivize consumers to opt in to the tracking and sharing of personal information. E-Commerce businesses like yours must strengthen the bond with their top customers in order to retain them, and one way to do that is through creating a loyalty program.

Why Should I Consider Offering a Loyalty Program for My E-Commerce Business?

To boost customer retention and customer lifetime value, loyalty programs provide personalized offers and content that encourage ongoing customer engagement with your brand. Your loyalty program is both a method to collect key data to inform your marketing strategy and a distinct channel for direct, targeted communication with your high-value customers.  While effective incentives for allowing access to customer data vary by age and generation, free gifts, loyalty rewards, giveaways, and exclusive content are far less effective incentives for customers than discounts and free trial offers. Customers want to experience your brand at low or no cost, and they are willing to provide access to personal data like their email address to do so. A successful loyalty program is mutually beneficial, providing businesses with customer data that will help direct their strategy and presenting customers with valuable incentives that meaningfully impact their connection with your brand. Your loyalty program should be a smooth, curated experience for the customer that guides them through exclusive offers tailored to their interests. 

By collecting contact data points like email addresses and cell phone numbers, demographic and location information, and brand app and site browsing history, you can determine what products and services appeal to particular customers and connect with them about incentives. This data influences which offers and messaging you share to reach these customers across channels, from app push notifications and text messages to email outreach and social media ads. You can also use what you learn about your customers to build a strategy for reaching new customers with similar profiles. As third-party data disappears, developing loyalty programs and other means to capture first-party data will have a critical impact on your business’s ability to create effective digital marketing campaigns. 

During Google Marketing Live 2022, we learned that shoppers are 77% more likely to chose loyality brands over other businesses. Within the next few months, Google plans to showcase a brand’s loyalty benefits directly on results pages. Existing loyalty members will see what rewards they are eligible to use directly under a product or offer. Performance Max campaigns can use a customer match of existing members to find and target potential new loyality customers.

We foresee that loyalty programs will be especially important for D2C Brands competing against bigger industry players who resell their products. NetElixir’s Trends team has also found that Millenials especially value loyality programs and earning points through their purchases. Relying on key shopper insights and brand differentiators will go a long way to helping a brand succeed.

How Can NetElixir Help?

Two of the biggest barriers to businesses creating loyalty programs are competing priorities and lack of tech support, according to eMarketer. But with the death of third-party cookies, the data that can be collected through a loyalty program is more important to your bottom line than ever before. NetElixir has the experience and the resources to guide you in designing your loyalty program with analytic tools that will produce the customer insights you need to drive sales. 

NetElixir works with you to determine what data analytic options will be most useful for your business. Our proprietary technology, LXRInsights, is a powerful tool for tracking, analyzing, and targeting your high-value customers and engaging more like them. LXRInsights allows you to match unique user IDs to specific datasets about products particular customers are buying, including how often those customers are purchasing from your business. Loyalty program customers can maintain their privacy on your website and app while still allowing you access to useful data around their spending habits. LXRInsights also empowers you to easily retarget customers who are likely to buy from you again. 

NetElixir can lead the web development process for your business to make your site as customer-friendly as possible, and we can use the data you acquire through your loyalty program to develop customer personas and content that enables you to reach your high-value customers across all channels. We can help you partner with technology vendors to gather and use data in a manner that complies with industry standards around privacy such as adhering to customer consent choices and protecting customer information, while using advanced tracking to capture data on conversions. 

Contact NetElixir today to learn more about how we can help your e-commerce business succeed in the cookieless future.

Further Reading

Updated June 1, 2022

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