4 Tips for Building Effective D2C Customer Loyalty Programs

As the name implies, direct-to-consumer (D2C) brands sell to customers directly, usually online, without any intermediaries or distribution partners such as a supermarket. D2C brands benefit from a direct relationship with consumers and increased control over the customer experience. This relationship offers a host of benefits that D2C brands can use to build highly effective customer loyalty programs. Here are some steps for creating a D2C customer loyalty program that helps your brand succeed.

Nail the basics

Direct-to-consumer brands have more control than others over the customer experience. This gives your brand the power to nail the basics: a great shopping experience, forgiving and timely customer service, and personalized marketing. D2C brands can make each and every interaction a customer has with the brand positive and seamless.

“Building loyalty can start with simply providing the best customer experience possible,” Smile.io CEO, Mike Rossi, told Wix, citing options like giving timely shipping updates or important product news. "Make it a pleasant experience if a return or exchange is needed. You don’t have to break the bank, and the smallest gestures can turn single sales into devoted customers," Rossi said.

Once you are able to build a foundation of customer trust, your company can start to channel that trust into a more formal loyalty program.

Start with discounts or points

When you’re just starting to build your loyalty program, transactional loyalty can help get customers to sign up. Incentives such as 25% off their first purchase can give customers a little extra push to buy from you. Essentially, the goal at this stage is to get as many customers as possible to sign up for your loyalty program or support your brand.

“Customers are price-conscious and enjoy getting a good deal: 71% say they want to be rewarded with discounts for their loyalty,” wrote Yotpo. “This will pay off later on, once your customers have had the opportunity to grow attached to your products. 39.4% of consumers are willing to spend more on a product for brands they love (even if there are cheaper options elsewhere).”

D2C brands can borrow ideas from B2C loyalty programs, which incentivize certain types of behavior such as frequent purchasing, bundle buying, or referral marketing with different types of rewards.

[Read more: B2C Customer Loyalty Program Ideas]

Build a community

Points and discounts are good incentives to draw people into your program, but long-term loyalty takes more than bribes. Work on building a community for your brand that creates an authentic and meaningful connection. D2C brands can rally shoppers by creating Facebook groups, exclusive newsletters for top-tier customers, early access to sales, and beta testing during product development.

Another way to foster a sense of community is to tie your rewards to a cause that your brand and your customers can rally behind. Thrive Causemetics and TOMS shoes are two prime examples. Thrive donates a luxury cosmetics product to a woman in need (e.g., cancer patients and survivors of domestic abuse) for each item purchased. TOMS’ loyalty program is similar: Loyalty program members can exchange points for TOMS stuff or give back to one of the brand’s grassroots partners. It’s a win-win for everyone.

[Read more: How the Pandemic Has Changed Customer Loyalty]

Capitalize on customer data

D2C brands have unparalleled access to their customer data. Because D2C sales aren’t filtered through a third-party middleman, brands can get a clear picture of who their customers are and make informed decisions about product development, marketing strategy, and the customer experience.

In practice, this means your loyalty program can be used to test your data insights. While B2C brands use their loyalty programs to collect data, D2C brands can actually collect feedback on key business decisions. Ask your loyalty program members which packaging redesign they prefer, which new products they want to see next, or how changes to your service model have impacted their experience. You can stress-test changes to your business before releasing them to the wider market.

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