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3 Reasons Why Loyalty Programs Are Important In WooCommerce

Why Loyalty Programs Are Important In WooCommerce

In the world of e-commerce today, lots of store owners are jumping on the bandwagon and using plug-and-play loyalty program strategies. But have you ever paused and wondered why loyalty programs are important in WooCommerce?

Well, think about it. In this day and age, we’re all bombarded with endless choices and slick marketing messages. So, simply offering good products or services isn’t enough to keep your business afloat. To really stand out, you need something more – a program that genuinely connects with your customers.

Sure, setting up a loyalty program in WooCommerce might seem like a piece of cake. But if you don’t grasp its true significance, you might end up with a program that falls flat with your audience. Fortunately, this article will cover just that. So, let’s dive right in!

What Is A WooCommerce Loyalty Program?

Let’s say a customer, Jennie, purchases a set of skincare products from an online cosmetics store using WooCommerce. For every dollar spent, Jennie earns 5 reward points.

After a few shopping sprees, Jennie finds herself with a generous stack of points, enough to unlock a fantastic $50 discount on her next moisturizer.

Now, put yourself in Jennie’s shoes – wouldn’t you feel motivated to keep shopping at this store? It’s like being appreciated and valued for your loyalty. And the best part is that every purchase feels more worthwhile because you’re gaining tempting incentives from it, right?

Loyalty Program Example
Loyalty Program Example (click to zoom)

This is exactly how loyalty programs work. While there are various ways to encourage customer loyalty, the heart of these programs lies in retaining customers through enticing rewards, discounts, or special perks for their continued engagement with the store.

In essence, therefore, a WooCommerce loyalty program is a marketing strategy that cleverly employs incentives to:

  • foster customer loyalty,
  • encourage repeat purchases,
  • and ultimately, increase customer lifetime value.

Loyalty Program Examples

There are lots of creative approaches to designing a loyalty program.

One great way to do this is by setting up tiered loyalty points. As customers engage more and spend more with us, they unlock exciting rewards at higher levels. It’s like leveling up in a game, but here, the rewards are real and redeemable:

Tiered Loyalty Program Example
Tiered Loyalty Program Example (click to zoom)

You can also provide points for referrals. For example, when your customers bring in new shoppers through their recommendations, both the referrer and the new customer get rewarded:

Loyalty Program: Referral Incentives
Loyalty Program: Referral Incentives (click to zoom)

And because this strategy is quite common, you can also add a personal touch to your loyalty program by celebrating significant moments with your customers.

For example, you can reward them on their first-year anniversary since their first purchase. Or maybe even surprise them with birthday bonuses:

Sephora's Birthday Loyalty Incentive
Sephora’s Birthday Loyalty Incentive (click to zoom)

Again, the heart of our loyalty program is to make our customers feel appreciated and eager to come back for more. So, feel free to get creative and tailor the rewards to what resonates most with your audience, as long as it motivates them to return to your store.

3 Reasons Why Loyalty Programs Are Important In WooCommerce

Now, let’s dive into the exciting part: why are loyalty programs so crucial?

Sure, we already know they work wonders for customer retention and boosting sales, but that’s not all they do. Loyalty programs offer a whole lot of other benefits in enhancing your business:

1. Word-of-Mouth (WOM) marketing

Loyalty programs play a crucial role in igniting Word-of-Mouth (WOM) marketing.

Just picture yourself being part of an incredible loyalty program offered by your favorite online store. Every purchase you make earns you reward points, which can be redeemed for exciting perks and discounts on future buys.

What’s more, they also encourage you to share your love for the brand with your friends and family through referral incentives. This makes you feel valued and appreciated, right?

The Sill's Loyalty Program
The Sill’s Loyalty Program (click to zoom)

And before you know it, you find yourself discussing this store with your coworkers during lunch breaks, casually chatting about it with your neighbors while eagerly awaiting your packages, and even recommending it to other shoppers you come across.

That’s exactly how loyalty programs become the catalyst for Word-of-Mouth marketing!

When done right, they can effortlessly transform loyal customers into enthusiastic brand advocates.

2. Increased customer lifetime value

Obviously, the more you show your appreciation and reward customers for their loyalty, the more they’ll be inclined to stick with you. Not only does this enhance their overall experience, but it also boosts their lifetime value as loyal customers.

  • According to a recent survey, customers who are part of a loyalty program tend to stay with it for a whopping 10 times longer compared to those who make one-time purchases.
  • Likewise, the same study reveals that customers enrolled in a loyalty program have a Customer Lifetime Value (CLV) that ranges from 5 to 10 times higher than those who are not part of such.
Target's Loyalty Program
Target’s Loyalty Program (click to zoom)

But that’s not all there is to it. Apart from extending the customer lifespan, you also succeed in lowering customer acquisition expenses. As highlighted by Harvard Business Review, acquiring a new customer can cost 5 to 25 times more than retaining an existing one.

This means that investing in loyalty programs and keeping your current customers engaged can save you substantial resources in the long run.

3. Reduced churn

Churn, in simple terms, is when customers stop doing business with a company or cancel their subscriptions. Just by this alone, we can actually visualize how we can curb this churn rate.

Loyalty programs do more than just offer rewards; they create emotional connections with customers.

When people receive personalized rewards and special offers, it makes them feel valued and appreciated. And that’s a powerful marketing strategy because it decreases the chances of them jumping ship to a competitor.

Starbucks' Loyalty Program
Starbucks’ Loyalty Program (click to zoom)

Another thing is that loyalty programs work wonders for your cash flow too.

Once customers get into the groove of repeat purchases, it becomes a beautiful cycle of ongoing business. Plus, the engaging perks like unique experiences and early access to sales keep them hooked and genuinely interested in your brand.

At the end of the day, loyalty programs are all about building those heartfelt connections and giving customers reasons to stick around. The result? Less churn, happy customers, and a thriving business!


These are just a few reasons why loyalty programs are essential in your WooCommerce store. By implementing an effective loyalty strategy, you can build lasting relationships with your customers, foster brand loyalty, and create a thriving and sustainable business.

But that’s not all. In this article, we covered 3 more reasons why loyalty programs are important in your WooCommerce store:

  1. Word-of-Mouth marketing
  2. Increased customer lifespan value
  3. Reduced churn

Do you have any questions about this article? Let us know in the comments below!

author avatar
Belle Berber Writer, Content Manager

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