Jul 11, 2018 3 Min READ

Why a Rewards Program is the Best Retention Tool

3 Min READ
Why a Rewards Program is the Best Retention Tool


Acquiring a new customer is now 5 to 25 times more expensive than it is to retain an existing one. The ecommerce market expected to nearly double by 2021. Gone are the days of online advertising being a game-changing marketing technique. According to the Harvard Business Review, Acquisition techniques like Google Adwords have skyrocketed in price over the past few years, and with the size of the it’s not going to get cheaper anytime soon.

As a result, many of the world’s top ecommerce sites are turning their focus to customer retention as a way to combat rising acquisition costs. However, while a wide variety of retention tools are available it can be challenging to attempt to manage them all. The trick is to build a “retention hub” that allows you to navigate and centralize your retention efforts all in one place, and the most effective way to do that is with a rewards program.

Whether you’re looking to start a new rewards program or improve an existing one, here are three reasons why it’s the perfect tool to monitor your retention efforts.

Reward Programs Effectively Track Data

When it comes to managing your retention strategy, you want to put an emphasis on your most effective tool.  Not only are reward programs the best way to inspire customer loyalty, but they’re also able to track a wide variety of customer actions and data quickly and easily. From the number of referral purchases to revenue from repeat purchases, a rewards program makes it easy to track many key metrics that give you valuable insight into the success and growth of your business.


By using a rewards program to keep track of your store’s most important data, you can keep everything organized in one centralized place. Solutions like Smile make it incredibly easy to see, understand, and categorize your program’s most important data in seconds. Gone are the days of flipping between apps and windows to get a sense for how different parts of your business are performing. Instead, all the data and retention metrics necessary for your business can be easily tracked in one location.

As an entrepreneur and store owner, this saves you valuable time that allows you to continue running your business instead of worrying about calculating data.

Reward Programs Help You Make Informed Decisions

Not only do reward programs help you keep track of your data, but they also empower you to make informed decisions that improve your business.  Although metrics like purchase frequency, customer lifetime value, and average order value give you a good idea of what your customer engagement looks like, they don’t tell you what to do to improve it. Rewards data, on the other hand, allows you to see the impact of the changes you make in real time, keeping you connected to the inner workings of your customer experience. ,

Take your number of program members, for example. If this number’s low you can run an email campaign to drive more engagement to your program, or increase your onsite marketing in an effort to get more customers excited to join. Day after day, you can track if this number is growing or not and refine your retention strategy accordingly. You can do a similar type of thing with your rewards redemption and referral data. Paying attention to these types of data helps you develop a clear picture of what your customers value, and can then optimize your program to appeal to what your customers are looking for.

This is the type of real-time data an acquisition strategy can’t give you because it goes beyond the surface. By looking past your store’s vanity metrics, you can get to the root cause of specific engagement issues and intelligently implement strategies to course correct them effectively.

Reward Programs Focus on the Customer

Unlike a lot of acquisition techniques, retention marketing is a long term strategy. Instead of simply looking for an increase in customer clicks, retention marketing is based on investing in relationships with your customers. This makes it a significantly more defensible way to build your repeat customer base.

With a rewards program, you have the ability to turn each customer interaction into a positive brand experience. These positive experiences have the power to turn customers into loyal brand advocates that come together to create an unshakeable brand community that’s built on lasting, emotional relationships.

Offering points for purchases, offering exclusive rewards for your best customers, giving rewards for referring their friends, or even offering rewards for celebrating a birthday can all go a long way to helping with this process.


Evy’s Tree is a great example of a brand that personifies this way of thinking. Through their Who’s Hoo Rewards program, they have created an immersive rewards experience that keeps their loyal customers feeling like a valued part of their larger brand. With personalized messages, exclusive rewards, and customer referrals, they have made thousands of customers feel like part of their vibrant community, transitioning them each from loyal customers to brand advocates.

A Rewards Program is the Key to Customer Retention

Rewards programs can be an incredibly transformative piece of your business strategy. By putting your customers first and rewarding them for their loyalty to your brand, you can keep them coming back for more. You can improve your brand image and track a whole bunch of retention metrics all from within your program, making it the most convenient way to build loyal customers. From planning your future strategies to analyzing past performances, a rewards program can act as a hub for all your retention needs.

This is a guest post written by Smile.io. Smile.io is an ecommerce rewards program provider who helps connect you to your customers through emotional and rewarding experiences. Tens of thousands of merchants trust Smile.io to improve their retention rates, and reward their customers for completing profitable actions.

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