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How Loyalty Marketing Helps E-commerce Customers To Generate Better Sales ?


One of the archaic yet effective marketing concepts suggests that in order to have more customers, a brand needs to build strong relationship with the existing customers. The more loyal customers an enterprise has, the more revenue it can generate. The e-commerce industry too believes in this concept and has implemented methods to achieve it.

As an e-commerce site owner, there is no denying the fact that you too want to make profits for your business. The easiest way to this is through Loyalty and Trust-based Marketing.

What is Loyalty Marketing?

An e-commerce website has innumerable visits on a single day, among which few are potential customers; some are just browsing customers while others are actual buyers. Each different person visiting the site is a customer. By making these people return to the website repeatedly, a business can generate more sales.

Loyalty marketing is a strategic management approach that allows the company to retain their existing customers and attract new customers through interesting deals and incentives. Despite being an old marketing theory, loyalty marketing have made itself omnipresent in consumer marketing for the mid of 1990s.

Today this form of marketing has expanded into several branches; however, the reward point remains the most commonly used one.

Understanding Reward Points

Every alternative day you may come across shopping websites that offer reward points on every purchase. So what are these reward points and how do they work? The reward points are a form of credit that is added to the customer’s shopping account. After the accumulation of certain number of credits, the customer is allowed to redeem those points in their purchase, get discounts or do more. Sometimes even referrals earn them these credit points.

One of the key players in the theory of trust based marketing; reward points give customers incentives and rewards when they make purchase from a site. The concept is an easy and of course attractive to everyone. After all, more and more reward points for customers, means more and more sale for the company.

reward points

Objectives of Loyalty Programs

A loyalty program in any e-commerce site has three basic objectives:

  • Increasing the chance of a first time buyer to make another purchase
  • Passively prod an existing customer to a higher paying slab.
  • Gather buyer behavior data to improve business and marketing efforts.

How Loyalty Marketing Helped Sports365 Generate Better Sales

Sport365.in, is an online retail store based in Bangalore. The online shop offers a range of sport and fitness goodies for people who love to keep themselves fit. Along with sport goods, the store also offers accessories, footwear and apparel at great prices. The company is passionate about sports and believes in infusing the same passion among buyers. The brand name Sport365 itself suggest the its commitment towards sport.

Sport365.in uses Magento platform for their website, which offers them flexibility and high functionality. As an initiative to retain old customers and an attempt to bring in new customers to their website, Sports365 has implemented a loyalty-marketing program. According to this program, customers earn credit for their purchase. Each 1 credit stands for Re 1 that a customer can start using once the balance reaches to Rs 25. So when you accumulate 25 credits, you get a discount of 25 rupees.

This loyalty program by Sports365 invokes brand evangelism among customers. Sports equipments are expensive, through reward points customers get a chance to add on some discounts while they make their next purchase. Reports suggest, presently, the company is doing well in revenue generation, it is expected that by the end of this year they will generate Rs 35 crores in revenue.

As a Seller What Benefits Should You Expect?

Loyalty marketing has huge marketing potentials, not only does it advocates a brand but also encourages repeat business. Some additional benefits trust-based marketing offers are as follows:

  • As discounts, incentives and prizes are given that suits the requirements of the customer, viral based sharing happens and new customers are introduced to the site.
  • By analyzing the purchases and searches performed by customers, a brand can offer amazing deals and discounts on items even before customers plan to make their next purchase, hence retaining their loyalty.
  • Creates engagement and interactivity with customer’s, thus increasing loyalty. The rewards increase the lifetime value and lowers all acquisition cost among customers.

Loyalty extensions and Loyalty programs- A Magento Initiation

The Magento Enterprise Edition comes with a Loyalty program. In the program, Magento offers powerful tools that reward customers with virtual currency that can be used as discounts for future purchases in their store. This edition also offers additional features like:

  • customer registration,
  • review submission,
  • gift voucher code application and upgradation,
  • generating coupon code for buyer emails,
  • newsletter sign-up,
  • send invites to more customers for conversions, and
  • transactional email support.

Implementing Magento Enterprise Edition to your e-commerce site will assist you in the process of earning more customers that are loyal. Magento also offers reward point extensions that can be included to any existing Magento website for delivering unparalleled user experience. As a site owner, you can choose between extensions or Enterprise edition, as they add multi-value to your marketing strategy.

What did we learn?

Good customer service is essential for any brand to make its mark in the field of commerce. Whether you are a B2B company or a B2C, as a merchant it is your primary responsibility to keep customers happy. To do this, loyalty marketing is an effective strategy for a brand. Keeping customers engaged and active through these various marketing tactics will assure that your customers remain receptive to future offers.

A good e-commerce program designed to build trust and loyalty will provide customers with value. In addition, it will also provide sufficient reward for customer’s commitment to the brand. If you have such a program, then your customers will come back to you for more.

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How Loyalty Marketing Helps E-commerce Customers To Generate Better Sales ?