When it comes to gaining repeat customers online, independent research commissioned by Rakuten revealed that 39% of shoppers surveyed see loyalty programs as the biggest incentive to making a second purchase online.

Retailers and marketers should look to put loyalty schemes in place to garner repeat purchases, encouraging yours to become the “go to” brand. 

The modern loyalty program

Loyalty programs are nothing new.

In 1979, Texas International Airlines launched the first frequent flyer program, and in 1981 American Airlines followed suit with the AAdvantage frequent flyer program, seen by many as the first full-scale loyalty marketing program of the modern era.

Department stores have long offered store cards, while other retailers offer products instead of points, like the My Starbucks Rewards, which offers you a free coffee after you’ve bought a certain number of drinks or when it’s your birthday. 

Today retailers are realizing that rewards and loyalty programs don’t just mean money off.

Partnerships with complimentary brands, such as spas, salons, and restaurants, are becoming increasingly popular. Consumers are open to receiving incentives and rewards based on their interests and shopping behaviors.

This might mean early access to sales or new lines or being able to buy treats — such as tickets to the movies or a Broadway play — with loyalty points.

In 2006, Coca-Cola began its own customer loyalty marketing program, My Coke Rewards. The program allows customers to enter codes found on specially marked packages of Coca-Cola products on the company’s website, where customers can redeem points for prizes, sweepstakes entries, gifts, and more. Coca-Cola also works with a number of partners including Nike, FTD, Live Nation, Olive Garden, and Disney Parks.

The program has been such a success that it’s been extended every year since its start. It’s currently scheduled to run through December 31, 2013. 

Personalizing your rewards

In ecommerce, online loyalty programs are now highly sophisticated. Cookies, other tracking technologies, and services such as affiliate networks mean that retailers, brands, and marketers have a vast wealth of data on when, where, how and why their customers shop online.

They also have data on what shoppers have bought, how much they spend, and what else interests them based on their purchase history and web-browsing behavior. This allows brands to offer incentives targeted at an individual customer.

This is great news for brands trying to reach younger generations; Rakuten’s research recently found that younger online shoppers prefer the personal touch, with 24 percent stating that personalized offers were most likely to encourage another sale.

It’s also worth noting that consumers don’t differentiate between channels. As PriceWaterhouseCoopers explains in “Understanding how US online shoppers are reshaping the retail experience,” retailers need to understand that even digital channels don’t change the face of a business. It’s all the same for the customer.

Retailers need to focus on providing services for customers across all channels, integrating all channels to provide the best customer experience.

Treats for everyone

Loyalty programs present benefits both for retailers and consumers. The data that retailers gather on consumers who opt into a loyalty program is invaluable, allowing them to better target offers and products to a consumer based on purchasing history. This personalized targeting continues the virtuous circle of buying, rewards, and therefore more buying.

Make sure to offer your customers something that will encourage them to pick your brand over another brand, whether it’s points, discounts, or other treats.

A modern, digital loyalty program can either be specific to one retailer or, even better, encompass multiple brands and retailers. Ideally, online shoppers should be able to shop, earn, save, and spend with every purchase made, whether they shop online or in-store with the participating brands.

This drives customer loyalty and return rates to multiple brands, rather than restricting customers to one loyalty system per retailer.