A car decorated with bumper stickers shows the importance of a customer loyalty program.

Soaring rates of inflation are forcing consumers to re-evaluate their spending habits, and you might have noticed that customers are harder to win over than ever before. In fact, nearly 40% of customers cancel their online subscriptions because other top-performing brands attract them. As subscription ecommerce continues to boom, shoppers are presented with more choices, lower prices, and tempting introductory offers—so what can you do to stand out from the competition? 

Your reflex response might be to engage in a price war, enticing consumers with bargains that are almost too good to be true. But these offerings are too good to be true, for you at least. As prices get lower, so do your profit margins, and fickle customers will cancel again when the next offer presents itself. This method is as unsustainable as it is unfulfilling, and will only get in the way of the growth you’re eager to achieve. 

Here’s the secret. Are you ready? You need to stop pouring time and money into attracting new customers, and start paying attention to existing ones! 

Instead of chasing the next subscriber, prioritize creating an experience that is so amazing for your current customers that they wouldn’t dream of leaving. The importance of rewarding loyalty can’t be underestimated. In fact, 45% of customers have said they’re likely to keep their subscription for at least a year if the service offers them perks and rewards in return. The numbers speak for themselves, and it’s really as simple as this—by making sure you give back to your most loyal customers, you’ll discover just how much they give back to you. 

Hopefully we’re painting a clear picture of how important loyalty is to your business, but if we haven’t quite convinced you yet, here are just some of the ways you can benefit from a loyalty program…

The biggest benefits of customer loyalty

1. No more price wars with competitors

As we just mentioned, one of the biggest benefits of customer loyalty programs is that they stop you from competing on price alone. By connecting with your customers’ emotions, you unlock more ways to set your store and your brand apart.

Let’s elaborate a little further. Studies show that when a customer makes a purchase, the decision is highly emotional. And each time you reward a customer, you’ll appeal to their emotional side. By doing this you start building a bond, and as the bond develops, they start to see you as more than a range of products with price tags attached. Before you know it, it doesn’t matter if they can get a bargain elsewhere, because they’d much rather stay with you.

2. Increased customer lifetime value

Customer lifetime value (LTV) is the net profit attributed to the overall relationship you maintain with a customer. It tracks how valuable a customer is to you now—and how much this ongoing bond is worth in the future.

Thanks to repeated payments, subscribed customers have a higher customer lifetime value and are a more reliable revenue stream for your business. The benefit of a customer loyalty program here is that you have valuable data on a person’s unique habits, which you can use to surprise and delight them at the right time. 

This will motivate shoppers to become subscribers and encourage subscribers to stick around for longer and keep spending with you. As you start to turn existing customers into loyal ones, you’ll see the importance of customer loyalty shine through as LTV increases.

3. Create brand advocates 

Your most valuable customers aren’t only the ones who spend money, they’re also the customers who generate it. We call them “brand advocates.” And they’re the ones who’ll refer your store to their friends, family, or—for those on social media—their followers.

Another benefit of a loyalty program is that you can build a network of advocates. Past research shows at least 92% of people trust word-of-mouth (WOM) recommendations from friends or family more than any other form of marketing. WOM is also the main factor for up to half of all purchasing decisions, according to McKinsey.

In addition, 86% of consumers engage with brands they’re loyal to by spreading the word. It’s the power of advocacy in action! By using your loyalty program to reward your most engaged customers for their advocacy, you’re encouraging them to share their positive experiences far and wide.

Grow your subscriber community with a loyalty program

We’ve discussed the benefits of loyalty programs in a general sense, but they’re also a brilliant way to drive growth in your subscriber community. There are two easy ways to keep your recurring customers on board. Firstly, take every opportunity to collect more data from the customers who are already opted in. And secondly, make sure you’re using that data responsibly to deliver VIP, personalized experiences that they can’t get elsewhere. 

You can deliver these VIP experiences by offering subscriber rewards that everyday shoppers can’t access. For example, Amora Coffee gives subscribers access to a wide range of benefits once they unlock the points required to redeem them. 90 points will allow a member to unlock a travel mug, 100 points will win a subscriber 20% off their next order, and 450 points would be enough to redeem an entire coffee maker! Exciting, right? This successfully keeps subscribers engaged for longer, as they have a clear goal to aim for, and they can see the benefits of remaining signed up. See more on Amora’s subscriber benefits in the LoyaltyLion Hall of Fame. 

Amore Coffee offers a free mug with a purchase.
Amora Coffee makes it easy for customers to see their rewards—encouraging them to spend more money while shopping.

You could also incentivize shoppers to subscribe by introducing a unique tier that only those who purchase on a recurring basis can access. By advertising your subscriber tiers and corresponding rewards, you can tempt new one-time shoppers into a subscription with the exclusive benefits that mean the world to them, but cost little for you. Consider experiential perks such as early access to sales, discounted shipping rates, or special content, to name a few. 

Seventh Sense operates a subscription service tier that gives members access to special events that other tiers can’t access, as well as free shipping on all subscription orders. Simple, yet effective!

Another benefit we spoke about earlier is brand advocacy. Many brands use loyalty programs to encourage subscribers to refer their store to a friend or family member, promising rewards in return for advocacy. Referred customers have a 16% higher lifetime value than non-referred customers, so incentivizing subscribers with points for every referral is an incredibly effective way to drive growth. 

Your customer loyalty program

Introducing a loyalty program to your subscription service can give your brand the edge it needs to finally set itself apart from the ever-growing competition. There are so many great benefits for you to capitalize on, and we’d hate to see you miss out. 

If you’d like to learn how to make the most of your ecommerce subscription model and loyalty program, join the LoyaltyLion Academy. There you’ll gain the knowledge, experience, and insight you need to create a successful subscription model that will keep your customers coming back time and time again.