Here’s Why a Robust Rewards Programme is Absolutely Critical for an Ecommerce Business

Here’s Why a Robust Rewards Programme is Absolutely Critical for an Ecommerce Business

Here’s Why a Robust Rewards Programme is Absolutely Critical for an Ecommerce Business

As early as 1990, Harvard Business School, in partnership with Bain & Company, conducted a study on customer loyalty in the e-commerce industry and found that a 5% increase in customer retention increases the profits by 25% to 95%.

This is not shocking considering that customer acquisition is 5 to 25 times more expensive than customer retention, depending on who you ask.

The writing on the wall is crystal clear. E-commerce businesses spend a fortune on customer acquisition and have a considerable incentive to retain the customers. This is especially true for B2B e-commerce businesses, wherein high customer retention rates are critical to the success of the business.

With hundreds of brands vying for customer attention and numerous tools available for price comparison, the e-commerce industry is far from a sticky business. But, that’s not because the B2B customers don’t care about whom they purchase from. These customers do have to strike the right balance between quality, price, service, and many other aspects, but they also prefer to work with vendors who understand their unique needs and fulfil them. Frequently changing the vendors is a long and tedious process that involves gathering information, comparing the various products or services, and then arriving at a decision. Therefore, they are always looking for reasons to stay, and a good rewards programme can become a compelling one.

A robust rewards programme can help businesses retain nearly half of their new customers, and that could mean an increase in profits by manifold.

Sadly, e-commerce businesses have so far failed to tap into the full potential of the loyalty programmes. The reason is simple. Most of the rewards programmes in the market are designed for B2C segments, which spectacularly fail to meet the needs of the business customers.

So, what makes an e-commerce loyalty programme compelling enough to maximise customer retention in B2B segments? Here are some important pointers in this direction.

1. Understand What They Care About

Sure, financial incentives continue to be the key driver of loyalty programme signups. However, once the customers have signed up for a loyalty programme, experiential benefits gain significance. Features like priority services, dedicated support services, and other such benefits play a critical role in their continued loyalty to the e-commerce business.

2. Let Them Design Their Loyalty Programme

A one-size-fits-all approach to loyalty programme does not work in any industry. Let alone in a non-sticky business like e-commerce. A points-based loyalty programme that allows the businesses to accumulate points based on their purchases and then redeem them as per their discretion is a great way to give your customers the ability to choose their rewards. It shows that the e-commerce business truly cares about providing the customers with what they want.

3. Multi-Tiered Services

E-commerce businesses can standardise the service benefits to their loyal business customers by creating a multi-tiered loyalty programme. Such a programme can list the various benefits that the customer can avail as they graduate from one level to the next. Access to each level should be governed by size, consistency, and value of the purchases. This is something that credit card companies have been doing for decades with their corporate clients, and it has proven its worth time and again.


E-commerce businesses cannot afford to have a high customer turnover rate. It is imperative that they invest in a robust rewards programme, boost their customer retention rates, and thereby, maximise their profits.


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