Whether or not rewarding loyal customers is worth your while was once a hotly debated issue in the wide world of retail. Between the 70’s and 90’s, pundits would argue until they were blue in the face about the profitability of handing out coupons and offers, and whether any of it was worth it in the bigger picture.

The thing is, in order for customer rewards to work, they need to be tailored (and exclusive) to customers who actually deserve to be rewarded. You needed customers to know that if they scratched your back, you’d scratch theirs. This helps them work as an incentive to use your service, and remain loyal – accumulating more and more rewards over time – and sets a rewards program apart from a free coupon to clip out of the newspaper.

But back then, it was near impossible to tell if a customer was coming back. There were no online accounts or profiles, so how to tell if they were they telling their friends? Or buying more frequently? Without any real data tracking, telling who your loyal customers actually were (unless, of course, you ran a physical store with regular staff who could recognise the regulars and slip them a little extra deli meat ‘on the house’) was damn near impossible for larger businesses.

Yet even all the way back in 1995, Harvard Business Review was spruiking the benefits of customer loyalty programs, claiming: “A rewards program can accelerate the loyalty life cycle, encouraging first-or second-year customers to behave like a company’s most profitable tenth-year customers—but only if it is planned and implemented as part of a larger loyalty-management strategy.

Back then, properly ‘planning and implementing a larger loyalty-management strategy’ was an enormous task. Rewards programs were in the territory of massive industries like Banking, Insurance and Air Travel. AMEX had Membership Miles. Delta Airlines had SkyMiles.

The thing was, despite the profits of such programs, the technology required to create and keep track of a ledger of thousands upon thousands of unique customer IDs and their available points required an enormous budget to get off the ground. Not everyone could afford to implement such a system. Despite how well they worked.

Even today, Delta Airlines is cashing big on it’s rewards system bet. Delta expects its rewards system to “yield $4 billion in revenue per year by 2021, rising by more than $300 million annually until then.”

Nowadays, all this ‘reward customers and prosper’ wisdom seems obvious. But that’s only because we’re spoiled with technology. Decades on, the cost of entry for a system like this has dropped drastically. Now any online store can create their very own personalised rewards system. And there are even quite a few apps that plug directly in between your online store and email marketing platforms to automate the whole process – immediately rewarding each of your customers for shopping and boosting their loyalty – without needing any code of your own. Creating your very own ‘FlyBuys’ system is comically simple.

This bolsters every promotion that you send out with the added benefit of additional discount points for future purchases. Your customers will purchase more. It’s a tried and true tactic some of the largest industries on earth have been using since the seventies. And it’s easily accessible to us all.

Plus, things get even smarter. With Smile.io, for example, you are able to provide customers with rewards for other profitable actions; referring a friend, or following your brand on social media.

These days, you can even set up VIP tiers of customers – creating ‘platinum member’ clubs of your own. These allow your best spenders to receive exclusive deals or new seasons of products in advance. Consider the implications this might have for an online fashion label that regularly markets new seasons of outfits, or a lifestyle brand that runs the occasional sale on limited edition products.

While ‘rewards programs’ might not seem like an online marketer’s first point of call, they can be hugely beneficial in boosting customer loyalty, referrals, and ROI. It’s time ecommerce embraced their power to keep customers, even in such crowded markets.

Make it work for your online store.  

Jackson Hills

About Jackson Hills

Hi, I’m Jackson; Andzen's Digital Content Producer. I write copy for our client businesses - whether it be email campaigns, blog posts, social media posts or something new. It's my job to write stuff that converts, boosts engagement and pushes brands to new heights. In my spare time, I enjoy piano, reading books, and writing short stories.