How to drive more sales

Customer loyalty programs – An Advantage or a Disadvantage?

A customer loyalty program can be an advantage for the website owner’s if done well. If up & running correctly, loyalty programs can keep your customers turning back for repeated purchases. The ongoing rewards, Cashbacks & sales can convert casual browsers into potential recurring buyers.

But if done wrong, it can be a curse for the website owners. If the running customer loyalty program is below the line, it can lead to a loss of customer’s interest in the offered products & services. Moreover, it will be a waste of time, resources, and money.

A potential customer, once lost, is hard to retain back. But keeping some critical factors in mind, we can, for sure, use these loyalty programs as customer retention tools.

What is the Customer Loyalty Program?

A customer loyalty program is a rewards program offered by a company/website to customers who frequently make purchases. A loyalty program may give a customer free merchandise, rewards, coupons, or even advance released products.

Using this technique, we can target both new & existing customers.

Loyalty programs can also be called ‘incentives’ offered to the buyers against the purchase of any product or service. The incentives are directly proportional to the order amount, i.e., the higher the order amount, the higher will be the incentive received by the buyer. The incentivization can be in terms of discounts, freebies, cashback points, or any other form.

What offerings can churn maximum outputs for you?

From a wide range of offerings, customer loyalty programs can vary on the basis of Product/Services or on the business’s working strategy/planning.

  1. Offer Cashbacks on purchases.

The cashback offering program allows customers to earn money back from previous purchases and redeem them after a certain interval of time, amount, or purchases. The cashback, if often a pre-defined ‘x percentage’ of the order value & is credited back to the user’s online wallet after a certain interval of time. This cashback can then be spent on future purchases, effectively discounting the future purchase.

  1. Offer Discounts

The discount program offers a certain percentage discount or flat amount discount on an order. Discounts can be applied either to a specific product or to the entire order.

These discounts can also be referred to as ‘sales.’ The discount amount is offered on the MRP of the product, thus reducing the sales prices of it.

This program usually applies instant benefits to customers during checkout.

  1. Offer Reward/Royalty points in an online wallet.

With the royalty points program, the customer is offered royalty points in his account based on the behavior of his previous purchases. The accumulated points can be redeemed as virtual cash in their online wallet, which can be redeemed in the next purchases.

With his reward or royalty point program, users are motivated as they earn points upon their actions performed on the website.

  1. Refer & earn

With the refer and earn program, users are rewarded with virtual money in their online wallets for referring their family & friend to make a purchase of any product or from any specific website. Using this program, both the referrer & the referee earn a certain amount in their online wallet, which can be redeemed in their next purchase.

This program motivates a user to refer a product/service/website to his family and friends to earn some extra amount in his wallet, which in turn is beneficial for the website to increase their visibility and to generate more orders out of the referrals.

  1. Offer membership subscriptions

The membership subscription program entitles the user to subscribe as a premium member on the website. With this premium member subscription, the user gets an advantage of many premium facilities like 1st access to pre-launch products, flash sales, and introductory products, free shipping for his orders, access to exclusive shopping events & products, etc. For e.g., Amazon Prime.

  1. Offer freebies

With the freebies program, the website owner gives away some freebies with every order placed on the website. These freebies can be product dependent & independent. For e.g., while selling a shoe, the buyer can be offered a pair of socks as a freebie, and while ordering a mobile, the buyer can be offered a screen guard as a freebie.

Offering freebies enhance the user’s buying experience.

  1. Free Shipping

With the free shipping module, the website’s owner offers the buyer free shipping of his goods over and above a fixed order amount. If the order amount exceeds that threshold limit, no shipping charges are incurred by the buyer.

This program encourages the buyer to purchase the products of a minimum amount of that threshold limit so as to avail free shipping.

  1. Gift cards

Gift cards are the prepaid cards that can be purchased from the respective website by a user. The user, when purchasing a gift card, is given a unique gift card number, which can be used to make purchases by him. No cash transaction is required while redeeming a gift card.

The rules regarding a gift card are set by the admin.

When can these rewards be offered to the buyers?

The above-mentioned rewards can be offered to the buyers based on their actions/tasks. The actions might include:

  • On User registration
  • Buying a specific product
  • Festive season discounts
  • On referring a friend
  • Custom offers based on Birthdays’, anniversary, etc.
  • On the basis of order amount (the higher the order amounts, the higher is the cashback/loyalty points)
  • User’s activity on the social media page- promotions by a user.

Benefits of enabling these customer loyalty programs on your website:


  1. Boosts up your sale.
  2. Brand promotions
  3. Existing customer retention
  4. Increased traffic on the website
  5. Increased CLV (Customer’s lifetime value)
  6. Recurring orders from customers
  7. More orders mean more revenue generation
  8. Customers mouth to mouth publicity of your brand


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