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Loyalty Schemes: The Gateway To Better Shopping Experiences?

  • Written By Andy
  • Posted June 6, 2016
  • 4 minutes Read Time

Evidence backs up the case that 70% of companies claim it’s cheaper to retain a customer than to acquire a new one. With this in mind, we’re going to discuss some of the main points that will help existing customers come back time and time again through loyalty schemes. While they are not the be-all and end-all of customer retention, they are certainly proven to be a factor. Find out why, here:

First off, we’re going to show you the one key area you need to apply to your loyalty scheme so that you have an initial base to work from.

You should offer small rewards to customers simply signing up to your loyalty scheme. A good example of this would a certain set amount of free points for joining or perhaps a small gift.

Once you have customers signed up, you can then move on to encourage repeat purchases by increasing reward value each time they step up their spend amount.

Some ‘social proof’ pointers you should consider adopting include:

  • Geographic targeting is a good option to offer rewards that are relevant to the customer location, and highlight how the available perks are prevalent with shoppers in certain areas
  • Endorse your loyalty scheme with genuine examples, such as customers’ stories of what they gained by earning loyalty points, saving up for a greater purchase, for instance.
  • Compile games and special competitions in your loyalty schemes, that only those who are members can be a part of and then make sure they can easily be shared on social media platforms, which will give you an extra (free) promotion.

Consider how loss aversion can play a part in your loyalty scheme. Loss aversion refers to people’s tendency to strongly prefer avoiding losses to acquiring gains. Most studies suggest that losses are twice as powerful, psychologically, as gains. How to apply this to your loyalty scheme:

  • Design your loyalty scheme to emphasise what customers have already gained, or what they stand to gain if they were loyalty card holders.
  • Inspire shoppers to claim their points to escape the chance of losing out.


To make something seem like it is exclusive to a customer puts the product in a higher bracket in terms of value and want. If something appears scarce, for example when hotels or airlines advertise ‘only four tickets left at this price’ or ‘last room of this type left’, consumers can be psychologically led to completing a purchase more swiftly than if those notifications were not made. Researchers confirmed that the exclusiveness, or scarcity or something, can have a significant effect on people’s perceptions of items.

Try offering customers in your loyalty scheme exclusive rewards, by giving them the ‘first dibs’ to buy products that will be popular, or additional discounts on products soon to sell out.

Away from your own products as rewards, you can consider working in conjunction with another brand of the company that you can use to appeal to customers, and vice versa.


This is a widely used way of having people base opinions on the initial piece of information they obtain. For example, if you had an item for sale that is £500, a customer might think the price is way too much, but if they see the original retail price is £1500, a bargain is suddenly upon them!

You can relate this to your loyalty scheme by offering a member’s discounts, but remember to highlight just how much they’re in line to save thanks to your loyalty scheme.

Additionally, it’s a nice idea to show a customer the points they already have on their card and display the difference between loyalty prices for items and regular retail website prices.

Finally, it’s worth thinking about the data you can collect through loyalty scheme trends and habits of your members. From the data you gather and collate, it enables you to influence buying behaviour. It also helps you to build a better, more gratifying shopping experience, which is all essential points if you are considering adding a loyalty scheme to your Magento eCommerce website.