How Personalized E-commerce Loyalty Programs Can Be a Business Game Changer

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Last Updated: April 2024

The world of e-commerce is a competitive one. Today, customers have the liberty to choose from a range of brands and businesses offering their unique products and services.

While e-commerce has been around for a while, online shopping has seen a significant increase due to the pandemic. As businesses aim to increase growth by acquiring new customers, they could be making one critical mistake – ignoring retention efforts for existing customers.

Customer retention can help companies build a bigger brand. One of the best strategies for this purpose is to personalize the brand’s loyalty program.

Importance of a Personalized Loyalty Program

Customer loyalty programs have been a key feature of the marketing outreach for several businesses. Companies have realized that a rewards program can help reap the true benefit of having a loyal customer base. However, the loyalty programs that perform best are the ones that offer its user a unique and personalized experience.

Businesses have access to valuable customer data and this data can be used to take loyalty programs to the next level. Whether it is the types of rewards offered, how these rewards are earned, and where and how they are redeemed, businesses can give their customers a myriad of choices. As customer demands increase, companies must look at new ways to meet customers’ expectations and provide a superior customer service experience.

Offering customers a personalized loyalty program is especially important for e-commerce merchants as their customers can shop in multiple stores simultaneously. Customer engagement is critical for every business and a powerful personalized loyalty program can help a business succeed.

Benefits of a Personalized Loyalty Program

For Customer Retention


Making a sale can be tough, especially in a highly competitive e-commerce marketplace. However, the chances of selling products or services to an existing customer have a significantly higher success rate.

According to research, existing customers are 50% more likely to try a new product from the same company. They are also likely to spend 31% more than new customers. This shows how critical and valuable customer retention is for every company.

Access to Customer Data

Customer data is a valuable resource to learn and understand the customers’ likes and dislikes. It can also give a deep insight into their spending preferences, and what kind of products or offers influence their purchasing decisions, etc. By using this data, companies can create personalized offers and rewards to make customers happier.

A brand must be perceptive to the customers’ needs and preferences. If a customer does not feel a sense of involvement from the brand, they wouldn’t hesitate to switch over to a competitor.

Better Revenue

Customers who have enrolled in a loyalty program are more likely to come back for more purchases. This leads to a steady inflow of revenue.

Loyal customers also help create a trusted, reliable brand image. Customer loyalty fosters a bond between the brand and the customer. This can help a brand stand out from the rest of the competition.

Lowers Acquisition Cost

Customer acquisition is expensive. According to a study, companies spend more money acquiring a customer than retaining an existing one. Thus, after making this investment a company would want to make sure the customer stays with them as long as possible. This helps to increase revenue and lower acquisition costs. Research also shows that once credibility is established, a returning customer spends more money than a new customer.

Boosts Customer Lifetime Value (CLV)

Customer lifetime value is a metric that shows the total amount a customer is worth to a brand over a period of time. For example, a customer decides to purchase from a brand for two years. In this case, the CLV would be the money the brand expects the customer to spend during the two years.

But how can you calculate customer lifetime value(CLV)?

Start with calculating the lifetime value by multiplying the average value of a sale, the average number of transactions in a lifespan, and the average customer retention period.

Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period

The lifetime value of a customer is a measure in gross revenue terms that does not account for the operating expenses. The profit margin of each product gives a fairly good idea of the cost of manufacturing, advertising, and managing operations. So profit margin is taken into account when calculating customer lifetime value.

Customer Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period × Profit Margin

Or simply:

Customer Lifetime Value = Lifetime Value × Profit Margin

The longer a customer stays with the brand, the more money they would spend, and the more profit the brand would make. In addition to an increase in revenue, a higher CLV also shows that customers enjoy and value a brand’s products enough to continue buying from the brand. A loyalty program can increase CLV and play a huge role in the business’ success.

Creates Brand Ambassadors

Every brand wants to create an image of trust in the mind of its customers. One of the strategies to build brand credibility is by building a customer base and focusing on retaining satisfied customers. These customers in turn can work as brand ambassadors.

When customers are satisfied with a brand’s offerings, they will share their positive experience and make your brand visible to potential customers. This word-of-mouth advertising can drive referral traffic and work wonders as it is considered more reliable than other advertising strategies.

How to Implement a Personalized Loyalty Program?


Here are some key points to remember when implementing a personalized customer loyalty program:

1. Easy to Understand

Loyalty programs must be simple to understand and use so your customers are encouraged to make the most of it. If a loyalty program is created according to the specific needs of a customer segment, it can improve participation rates.

It’s important to remember that with a personalized rewards program a business can significantly improve its customer satisfaction experience.

2. Offers Flexibility

When customers have the flexibility to redeem rewards across a wide range of services, they are likely to use them often. This can increase business sales and it impacts the business positively.

Customers are also looking for loyalty programs that offer flexibility and more ways to redeem loyalty points. When customers have the freedom to choose where to earn and where to use their rewards, it increases the loyalty program’s adoption and engagement rate.

3. Consider Partnerships With Other Brands

E-commerce brands can consider getting into a strategic partnership with another brand. This helps brands cross-market their offerings and gain access to a wider audience. When a brand provides value to a customer that goes beyond what their company can offer, a customer feels valued. It shows customers that the brand understands their goals and challenges. Partnerships also help both collaborating brands to retain customers and grow their networks and companies.

Though several companies offer reward programs, offering a unique and personalized loyalty program can be a game-changer for a business. It can make a customer feel valued and differentiate a business from its competitors.

How a customer feels about a brand has a massive influence on their purchasing decisions. If customer delight and customer retention are your goals, we at Helplama are here to help you achieve all that and more.

With a customer service provider like Helplama, your customers are assured of a delightful, professional customer service experience. Our flexible plans can be customized to meet your business’ specific needs. To know more about Helplama’s effective, affordable, and reliable customer support services, contact us today.



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