Wondering how long it takes to start a loyalty program? The answer is minutes! Yes, you read that right, it takes minutes to launch a loyalty program, with the right best in class SaaS partner solution that integrates across your ecommerce platform.
Customer retention is a key factor in growing your ecommerce business. Repeat customers are more profitable than one-time shoppers. The latest report on customer loyalty shows that Loyalty-generated value grew year-over-year (YoY) in all major commerce industries, showing an increase in loyalty and rewards program engagement and business impact.
Loyalty and rewards programs are becoming part of the customer experience, and a well-designed customer loyalty program is expected from customers.
Let’s break down what it takes to start a loyalty program and how long that process takes from beginning to end.
Ask yourself a series of questions to find what truly motivates your customers, what their behaviors are, and how a loyalty and rewards program can benefit them.
While it can take minutes, there are several brands that migrate over, or start from scratch that want to slowly configure their loyalty program to their ecommerce store. Building a loyalty program is on your timeline.
Types of loyalty programs
There are several types of loyalty programs that ecommerce brands utilize across their business, such as a points-based loyalty program, a multi-tier VIP loyalty program, or a simple referral program. Most do a combination of all three, which can speak to every customer’s buying journey.
Points-based loyalty program
A points-based loyalty program is one of the most common types of loyalty programs used across different industries. A points-based program provides points for purchases that can be redeemed for discounts, perks (i.e. free shipping), or free products.
These types of programs build loyalty and increase repeat purchases as customers need to return and make another purchase to redeem their points. Beauty brand Kiyoko Beauty rewards customers with 2 Besties Points for every $1 spent. Customers can redeem their points for free shipping, or a discount.
Customers start by joining the program, often earning points simply for joining the community. You then engage customers by offering other ways to earn points throughout the customer journey, like product reviews, sharing and following on social media, and even celebrating a birthday. Finally, customers can redeem their points for rewards that you choose.
Jonathan Roque
Referral Programs
Word-of-mouth marketing is the best form of marketing, and you can measure this through a referral program. Referral programs reward customers for sharing the brand with their networks through referrals. These are unique codes that existing customers can share with other new potential customers.
In referral programs, both parties, the person referring (referrer) and the one receiving the referral (referee) are rewarded. Shoppers who place an order from a friend’s referral get a reward, and you get new customers–it’s a win-win.
Kiyoko Beauty implements a referral program where both parties can receive $10 off their purchase. The best rewards for referrals are percentage discounts, amount discounts, free products, free shipping, or anything else your customers might value.
VIP Programs
A multi-tier VIP program involves categorizing members into tiers and providing exclusive access and perks to members that get increasingly more exclusive and appealing at each higher tier.
Customers join the loyalty program because they are excited to shop again with the promise of future VIP status and perks. Shoppers stay engaged when brands continuously increase their rewards and unlock new incentives as you shop more with the brand.
Fiesta Tableware achieved up to 30% in incremental lifts with its loyalty and VIP rewards program Plate Pal Perks. Launched just over a year ago with four VIP tiers - Coaster, Salad Plate, Luncheon Plate, and Dinner Plate, Fiesta Tableware has customers move up through the tiers. They’re rewarded with perks ranging from $5 off to a 25% discount.
VIP programs work very well for luxury brands where customers value exclusivity and status. However, in any industry, the element of gamification involved in tiered loyalty programs is motivating as customers monitor their progress towards leveling up.
Choosing a type of program
Once you choose your models, there are additional ways you can build on your rewards foundation to create a rewards program that’s super appealing. Ask yourself: what will motivate my customers? Finding the right type of loyalty and rewards program is the first step in starting a loyalty program.
The beginning stages are where you need to understand what motivates your customers to stay loyal. Great rewards programs aren’t just about points and perks—they’re about reinforcing why people connect with your brand in the first place.
Ask yourself:
- Do your customers value empowerment? Create VIP tiers with exclusive content, mentorship, or community perks.
- Do your customers value convenience? Offer free shipping or early access to new products.
- Do your customers get excited by premium quality? Create higher-value point redemptions for premium-tier products.
Focus your efforts on deepening and reinforcing what your customers already love about your brand and your products. Don’t just hand out discounts.
Gabrielle Policella
“How long does it actually take to start a loyalty program?”
Minutes! —Yes, you read that right, it takes minutes to launch a loyalty program. Smile.io offers the best loyalty program configurations ready to be used. From the amount of points a brand should set, to how to customize the look of your loyalty program, to how to launch it—Smile has the best out-of-the-box configurations and strategies.
We should note that while it can take minutes, there are several brands that migrate over, or start from scratch that want to slowly configure their loyalty program to their ecommerce store. Building a loyalty program should be on your timeline.
Knowing when to start a loyalty program
The final piece of launching a loyalty and rewards program is knowing when to start your program. In order to determine what is best for your store, there are three elements you should consider:
1. Type of products
Every industry has different types of products that can help you determine the types of rewards you can offer, and the types of points you can establish. Regardless of what products you’re selling, you will need adequate time to plan for and start a loyalty program in time for your busiest season. In general, it’s recommended that the average store allow for at least two months of prep and development in order to ensure their program is fully functioning before a busy period, such as Black Friday or the holiday season.
2. Testing period and launch stages
When designing a new product, brands tend to roll it out in stages by introducing new features and improvements over time. This same principle can be applied to loyalty and rewards programs.
We’ve often said that loyalty is not a “set it and forget it” marketing tool, and that it requires attention and maintenance over time in order to generate the best results for your business. That means you need to give yourself enough time to test strategies and give your loyalty program a chance to reach every customer.
Gabrielle Policella
A great way to test your loyalty program is through a soft launch, which means that you make your program available to a select group of customers before anyone else. These customers can then give you feedback that helps you improve your program before your official launch. You can even continue to use this feedback/release model once your loyalty program has been launched! This method makes your new program easier to understand and increases the chance of customers enrolling.
Experiment with different strategies such as bonus points, or different types of rewards customers can redeem for.
3. Size of store
Small brands can also have big wins with a loyalty and rewards program. Ecommerce brands of all sizes can see order values increase. According to loyalty data, merchants with less than 500 orders a month saw the biggest AOV increase, with 20.58% recently. This shows that consumer spending is favoring smaller, up-and-coming brands with a solid customer experience.
Team at Smile
The size of your store is a key factor in determining the type of loyalty and rewards program you need. If you want the best loyalty program possible, you need to give it time to grow and evolve, and this process gets longer the larger your store is.
Larger stores should plan to start and launch a loyalty program five months prior to their busy season, while smaller stores can afford to start anywhere from only two months or two weeks before!
Launch your loyalty program today
No matter how you approach it, you should aim to have your loyalty and rewards program launched in time for your busiest season. Whether your store is big or small, you need to give yourself enough time to start a loyalty program and effectively test it before the demand for your product spikes with seasonal shoppers.
