Glossary
Ecommerce and loyalty glossary
Short, plain definitions of the terms brands meet when they sell online and build loyalty. Each one links to a page that goes deeper.
- Loyalty program
- Loyalty coins
- Cashback
- Loyalty tiers
- Referral program
- Digital wallet card
- Digital stamp card
- Customer lifetime value (CLV)
- Repeat purchase rate
- Customer retention
- Direct ordering
- Delivery app commission
- White-label app
- QR ordering
- Self-service kiosk
- Omnichannel commerce
- Customer segmentation
- Marketing automation
- WhatsApp Business Platform
- Abandoned cart recovery
- Payment gateway
- Multi-vendor marketplace
What is a loyalty program?
A loyalty program is a system that rewards customers for buying again, usually with points, cashback, tiers or free items. Its purpose is to raise how often customers return and how much they spend, and to give the business a direct way to reach them.
What are loyalty coins?
Loyalty coins are points that a brand gives its own customers on each purchase. Customers collect them in the brand's app or wallet card and redeem them for cashback, rewards or gift cards. They are loyalty points, not a cryptocurrency.
What is cashback in a loyalty program?
Cashback is a reward that returns a percentage of what the customer spent as credit for a later purchase. With 10% back, an order of 200 earns 20 in credit to spend next time.
What are loyalty tiers?
Loyalty tiers are levels, such as Silver, Gold and Platinum, that customers reach by spending or visiting more. Higher tiers earn points faster or unlock extra benefits, which gives regular customers a reason to keep buying from the same brand.
What is a referral program?
A referral program rewards existing customers for bringing new ones. The customer shares a personal code or link, and both sides usually receive points or a discount when the new customer places a first order.
What is a digital wallet loyalty card?
A digital wallet card is a loyalty or gift card saved in the phone's wallet, such as Apple Wallet, instead of printed on plastic. It shows the customer's balance, updates automatically and can show notifications on the lock screen.
What is a digital stamp card?
A digital stamp card is the phone version of a paper punch card. The customer earns one stamp for each visit or purchase and receives a reward after a set number, for example the tenth coffee free.
What is customer lifetime value?
Customer lifetime value (CLV) is the total revenue or profit a business expects from one customer over the whole relationship. A simple version is average order value multiplied by orders per year, multiplied by the number of years the customer stays.
Read more: Customer lifetime value and repeat purchase rate: formulas and worked examples
What is repeat purchase rate?
Repeat purchase rate is the share of customers who buy more than once in a period. It is calculated as customers with two or more orders divided by all customers, and it is the simplest measure of whether loyalty is working.
Read more: Customer lifetime value and repeat purchase rate: formulas and worked examples
What is customer retention?
Customer retention is a business's ability to keep its customers buying over time. The retention rate is the percentage of customers at the start of a period who are still active at the end of it.
What is direct ordering?
Direct ordering means customers order from a restaurant or shop through the brand's own website, app, link or QR code instead of a third-party delivery app. The brand keeps the customer data and pays no per-order commission to a marketplace.
What is delivery app commission?
Delivery app commission is the percentage of each order that a delivery marketplace keeps for listing the restaurant and, often, delivering the food. Rates differ by app, country and contract.
What is a white-label app?
A white-label app is a mobile app built on a shared platform but published under the brand's own name, logo and store listing. Customers see only the brand, while the platform provider maintains the technology.
What is QR ordering?
QR ordering lets a guest scan a QR code on the table, counter or flyer to open the menu, order and pay from their own phone, without downloading an app or waiting for staff.
What is a self-service kiosk?
A self-service kiosk is a touchscreen in the store where customers place and pay for their own orders. It shortens queues, and it can recognise loyalty members so they earn and redeem points at the kiosk.
What is omnichannel commerce?
Omnichannel commerce means selling through several channels, such as a website, app, branch, kiosk and social media, with one shared catalog, stock and customer profile. The customer finds the same prices, points and order history everywhere.
What is customer segmentation?
Customer segmentation divides customers into groups with something in common, such as how recently they bought, how much they spend or which branch they visit, so that each group receives offers that fit it.
What is marketing automation?
Marketing automation sends messages automatically when a customer does something or stops doing it: a welcome after sign-up, a reminder after an abandoned cart, or a win-back offer after weeks without an order.
What is the WhatsApp Business Platform?
The WhatsApp Business Platform, also called the WhatsApp Business API, is Meta's interface that lets a company send order updates and approved marketing messages to customers who opted in, from its own software instead of a single phone.
What is abandoned cart recovery?
Abandoned cart recovery is a reminder sent to a shopper who added items to the cart but left before paying. The message brings the shopper back to finish the order, sometimes with a small incentive.
What is a payment gateway?
A payment gateway is the service that securely passes a customer's card or wallet payment from the checkout to the bank and returns an approval or a decline. Online stores connect one or more gateways for each country they sell in.
What is a multi-vendor marketplace?
A multi-vendor marketplace is an online store where many sellers list products under one brand and one checkout. The operator approves vendors and products, takes a commission and pays out the sellers.
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