Loyalty program
A loyalty program is a system in which a store rewards shoppers for repeat purchases: points, cashback, personal discounts, private sales, early access. The goal is for people to come back more often and buy more. Simply joining a program doesn't make a shopper loyal.
In plain words
A loyalty program gives a person a reason to come back to you specifically. It works when the reward is clear and fast, and weakens when points take long to collect or are hard to spend. It also costs money: every discount reduces gross margin, so a program should be judged by the growth in repeat purchases, not by the number of members.
What the research says
The data is mostly from the USA and the UK; there is no fresh data on Ukraine.
- Influence on the decision. LoyaltyLion (Censuswide survey, 7–12 May 2025, 4,005 e-commerce loyalty program members in the UK and USA): 85% say a program influences their decision to buy from a brand again; 46% wouldn't pay to join, 34% would (LoyaltyLion, 2025). LoyaltyLion sells loyalty programs, and the respondents are already members, so the answers are optimistic.
- Speed of reward. Digitas and Fetch (August 2025, over 1,000 active members in the USA): 40% leave a program if the reward is too far off; 87% consider convenience critical; 56% would share more data for personalization if privacy protection is clearly explained (Digitas, 2025). Merkle (2,000 consumers, survey date not stated): 33% of those who left a program within a year left because points took too long to accumulate (Merkle, 2025).
- Membership is not loyalty. Upside (a survey of 1,900 consumers and transactions of 7.7 million customers, March 2022 – February 2025, mostly US groceries, fuel and restaurants): half of those who join a program drop off within 12 months; almost 80% of shoppers are "unattached" and compare offers (Upside). The report itself sells solutions to retailers, and the industry differs from an online store.
How different sources see it
"What influenced my decision" surveys (LoyaltyLion) show high influence, while behavioral data (Upside) shows weak attachment. The gap is natural: people tend to overestimate the influence of bonuses. Takeaway for an owner: measure real behavior (the share of repeat purchases among members versus non-members), not answers on questionnaires.
Types of programs
Type | How it works | Risk |
|---|---|---|
Points / cashback | A % of the order goes to the account | Margin falls, accounting is complex |
Tiers | The more you spend, the better the terms | Hard to explain |
Paid subscription | Free shipping etc. for a fee | Needs frequent repeat sales |
Private access | Early sales, new products | Works only with a strong assortment |
How to calculate whether it works
An illustrative example (the numbers are made up). The store has 10,000 customers a year. Of them, 2,000 are in the program. Members place on average 2.4 orders, the rest 1.5. Average order 1,200 UAH, gross margin 30%, cashback 3% of the order. - Revenue from members: 2,000 × 2.4 × 1,200 = 5,760,000 UAH. - Cost of cashback: 3% of that amount = 172,800 UAH. - The difference in members' behavior can't be fully attributed to the program: they may have been more loyal before. So compare before and after, or against a control group; see incrementality.
Common mistakes
- A program with no margin calculation.
- Points that take long to collect.
- Complicated rules.
- Collecting data without explaining why and how it is stored (Personal data in Ukraine).
- Treating the number of members as the result.
FAQ
Does a small store need a loyalty program? Not necessarily. First check the repeat purchase rate: if the product is bought once every few years, points will change little.
How much does a loyalty program cost? It is a percentage of the order (cashback or discount) plus an accounting system. The specific figures depend on your margin.
Which is better: points or a discount? There is no reliable comparison for Ukraine. According to the Digitas 2025 and Merkle 2025 surveys, it matters that the reward comes quickly.
Related terms
- LTV (customer lifetime value)
- Repeat purchase rate
- Customer churn
- RFM analysis
- Discounts and promotions without losing margin
- Email marketing
Sources
- LoyaltyLion, What consumers (really) want (Censuswide, 7–12.05.2025) — loyaltylion.com/resources/consumer-loyalty-research
- Digitas and Fetch, Modern Loyalty Mindset (August 2025) — digitas.com/node/27226
- Merkle, Loyalty Barometer Report 2025 — merkle.com/en/merkle-now/ebooks/2025/loyalty-barometer-report.html
- Upside, Going Beyond Loyalty, Part I — upside.com/reports/going-beyond-loyalty-part-i-for-retailers
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