5 Customer Loyalty Tactics For Your Dropshipping Business

Think of your favourite brands. Why are you loyal to them? Sometimes, it’s because of the products they sell, but just as often, it’s because of the brand identity they’ve created. It’s the core values, customer experience, brand community, and the other intangible aspects of a brand that customers truly remember.

If you want to succeed as a dropshipping e-commerce brand, you’ll need to stand out from the crowd through something other than your products. With the global dropshipping industry expected to reach $557.9 billion by 2025, it’s clear that there is a lot of potential for success here. However, more than 90% of dropshipping brands fail because they’re not setting their brand up for success. 

With the volume of competition in the dropshipping industry, creating the best possible customer experience is more important than ever. So how exactly do you do this? One of the best ways is through a loyalty program. 

Let’s explore 5 customer loyalty tactics to help your dropshipping e-commerce brand succeed! 

1. Use referral programs to lower customer acquisition costs

A referral program encourages your previous customers to recommend your products to their friends and family through some sort of incentive. 

So why exactly do referrals work so well? Three main reasons:

• They provide social proof.
• They build trust.
• Reciprocity creates a two-way exchange of value. 

When customers see a brand being shared time and time again, they are more likely to try the brand themselves due to the popularity of it. That’s social proof. 

When the referrals come from someone who is in their inner circle, the phenomenon becomes even stronger. This is because the trust they already have in that person extends to their opinions. It’s estimated that “92% of consumers worldwide say they trust recommendations from friends and family, above all other forms of advertising.” 

Finally, by providing desirable rewards to both the sender and receiver, you’re creating a win-win scenario! For example, you can offer $10 off a future purchase to both referring and referred customers. Both parties win because they get a financial discount and you win because you’re existing customers are doing your acquisition marketing for you by bringing in a new customer! 

2. Increase retention rates with points and VIP programs

Two other effective types of rewards programs for generating repeat customers are points and tiered-VIP programs. Smile.io data reveals that on average, the top 10% of customers spend 2 times more per order than the lower 90%, and the top 1% of customers spend 2.5 times more than the lower 99%.

Points programs are the most common type of loyalty program since they’re easy to implement and maintain. Customers continuously earn some type of currency, known as points, over time through different points-earning actions to redeem for various rewards.

VIP programs build off the basic principles of a point program by incorporating elements of exclusivity, status, and gamification. In a VIP program, you create different tiers that reward your top customers with better rewards and incentives. 

Both of these types of programs are great customer retention tools for dropshipping brands because they keep customers engaged for a longer period by requiring them to make repeat purchases to redeem their points. 

Based on Smile.io’s data, customers are 27% more likely to make another purchase after their first purchase. This increases to 49% and 62% after their second and third purchases, respectively. As a dropshipping business, encouraging repeat purchases is key to being profitable. 

3. Brand your loyalty program

Now that we’ve covered the different types of loyalty programs, it’s time to go over how to ensure they’re effective. One of the best ways to enhance your customer loyalty experience is by making your program a natural extension of your overall brand. The key here is loyalty program branding. 

Dropshipping brands need to develop a distinct brand identity to succeed because it builds customer trust, differentiates from competitors, and therefore increases revenue. Your loyalty program is no different. 

There are several elements of your loyalty program branding to consider:

• Program name—the best names are memorable and related to your brand. No one’s going to remember a program called “loyalty program”. 
• Points currency name—It’s also important to give your points a unique name that ties to your program name and brand. The name can be a play-on word or something that conveys value.

• Colors, fonts, and images—wherever you include your loyalty program on your website, ensure the colours, fonts, and imagery used align with that of your overall brand. This will create a stronger impression in customers’ minds no matter if they enter your website via your loyalty program or homepage.  

• Explainer pages—This is a dedicated page to your loyalty program that excites customers about the program’s benefits, explains how to participate, and convinces new members to join.

• Rewards program panels and launchers—Sometimes, brands also include a pop-up rewards program launcher on every page that leads to a panel explaining the program. These especially need to be branded and stand out so that customers can easily access your rewards program, no matter where they are. 

• Language and communication style—Whether you’re explaining the program benefits or sending an email to let customers know they’ve earned points, it’s important to customize the language and communication style you use. If the rest of your brand uses a playful tone, ensure these messages match! 

Dropshipping brands benefit from having a strong brand identity, and one of the best ways to create this is through a branded loyalty program. Consider all of the elements above to give customers a memorable aspect of their customer journey. 

4. Make your customer loyalty program exciting

You can have a beautifully branded loyalty program that perfectly aligns with your ecommerce store, but it won’t matter if nobody wants to join the program in the first place. This is why it’s crucial to make your loyalty program exciting. 

Dropshipping ecommerce brands have to create an engaging customer experience to keep customers coming back. There are a few key ways to do this with your loyalty program—custom earning actions, event-based marketing campaigns, and experiential rewards are some of our favorites. 

Most loyalty programs offer some variation of the basic earning actions—points per dollar spent, sign-up bonuses, social media interactions, and leaving reviews to name a few. These are all great ways and serve a unique purpose but the one-of-a-kind experiences come from unique, custom-earning actions.

For example, dropshipping brands could offer points for filling out customer satisfaction surveys. Since dropshipping brands don’t physically handle their products, this is a great way to incentivize feedback and control the customer experience.

Event-based marketing campaigns are another great tool for creating excitement. These include bonus point events for earning and redemption, as well as unique loyalty program competitions. Bonus points events create a sense of urgency, exclusivity, and help boost sales during slower seasons.

As a dropshipping brand, using your loyalty program to generate sales protects your profit margins while creating repeat shoppers. 

Experiential rewards are those that create memorable experiences for customers as opposed to transactional financial incentives. Think of things like early access to product drops, virtual or in-person meet-ups, or the chance to influence future products.

With the ability to change and adapt product catalogues quickly, dropshipping brands are the perfect candidate for experiential rewards related to product drops.

By rewarding your customers with the chance to see new products first or give their input on future products, you’re creating an emotional connection with them that they won’t forget.  

5. Build a brand community with email marketing

There are several reasons you may choose to go with the dropshipping business model when launching your e-commerce store. One of them is to save money. 

Once you have all the tools in place, AppScenic recommends setting aside $1500-$2000 for advertising. While there are plenty of paid marketing tools that will help you acquire new customers, like digital advertising, there is a low-cost tool that will help you retain customers—email marketing. 

In fact, studies have shown that e-commerce brands can expect a $45 return on investment for every dollar spent on email marketing. When you think about how cheap email marketing is, with the only reason costs being the CMS or software you choose, that’s a pretty hard deal to turn down.

The advantage of email marketing is that it’s delivered right to your audience’s inbox. Unlike social media or even websites, you don’t have to compete with other brands for your customers’ attention. This is why email marketing is so effective in building a brand community. 

Here are a few of the best ways to use email marketing as a dropshipping brand:

• Personalize your emails with customer segments. 
• Humanize your brand by sharing your inspiration or founding story. 
• Add interactive elements like video,  links, GIFs, or user-generated content. 
• Share your milestones and business wins. 
• Always include at least one clear call-to-action (CTA). 
• Automate your email flows to integrate with your loyalty program. 

The power of loyalty for dropshipping brands

So there you have it—no matter what stage your dropshipping business is in, a loyalty program can go a long way. Whether you opt for a referral, points, or VIP program (or all three), it’s important to brand your program, make it exciting, and take it off your website into your customers’ inboxes with email marketing. 

Ready to put the power of a loyalty program to the test? Get started with Smile.io. 

Author Bio: Gabrielle is the Digital Marketing Specialist at Smile.io. She is passionate about all things content marketing and helping small and medium-sized e-commerce businesses grow and succeed.