Are you looking for a way to always have a steady influx of new shoppers? Ready to improve your relationship with your current customers to keep them coming back for more?
Affiliate marketing and loyalty programs are two of the most powerful ways eCommerce brands can grow. One helps bring in new shoppers, while the other keeps customers coming back for more. When done right, both strategies can work together to build trust, boost retention, and create a steady flow of sales.
To help you decide which fits your goals, we’ll break down what each program does, how they differ, and how they can potentially work together to make your marketing mix a little sweeter.
What is Affiliate Marketing?
Affiliate marketing is a performance-based program where affiliates earn a commission for promoting a brand’s products and driving purchases through unique tracking links. In eCommerce, this is essentially someone who is working on your behalf to increase sales.
If you think about it for a moment, this is almost like having a commissioned sales team available to help you push certain products. Their incentive is the commission, which can range based on your average order value or product cost (usually in the 7%-30% range – the lower the cost of the product, the higher percent commission).
Affiliates can be anything from a coupon site, cashback site, personal blog, news outlet, or even an influencer, as long as they are part of the program. Popular programs in the space are Rakuten Rewards, ShareASale, Commission Junction, and more.
According to Hostinger, as of October 2025, the global affiliate marketing industry is valued at over $18.5 billion, and is projected to reach $31.7 billion by 2031. That means there’s plenty of growth happening with willing affiliates looking to push products just like yours.
What Are The Benefits of Affiliate Marketing?
Affiliate marketing can be an incredibly effective and cost-efficient way to scale your online store.
For starters, you’re creating deals with leading influencers on Instagram and top coupon sites that seal the deal with first-time purchasers. As a brand, this equates to big profits with minimal cost. All you’re responsible for is giving a small percentage of each sale linked to the promoter, which can really increase sales in a big hurry.
When these affiliates know they’re getting a commission off each purchase, they’re much more likely to try to promote to their audience, resulting in:
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Expanded Reach with Built-In Trust: Affiliates introduce your products to new audiences through trusted recommendations.
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Performance-Based, Rather than Up-Front Costs: You only pay when a sale occurs, keeping ROI predictable.
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Higher Conversion Rates: Influencers and deal sites can boost first-time purchases by adding credibility and urgency.
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Scalable Growth: You can increase your affiliate network at any time without adding internal overhead.
What Are Loyalty Programs?
Loyalty programs reward your existing customers for shopping with you again and again, giving repeat customers an incentive to come back. The strengthen customer relationships and increase long term value.
These loyalty rewards can come in the form of points, discounts, free products, exclusive perks, etc. This is often the type of structure you see major retailers using to keep shoppers engaged and coming back for more, both online and in-store. With the right setup, smaller eCommerce brands can achieve the same success.
There are different kinds of loyalty programs available, the most common being point-based, tiered, paid, value-based, and coalition.
Point-Based
This is one of the simplest and most popular loyalty programs. The customer earns points on every purchase and can redeem them later for rewards like discounts or freebies. This works best on brands that promote frequent and short-term buys like coffee, skincare, or supplements.
Tiered
With tiered loyalty program, rewards increase over time based on customer loyalty. Typically, the customer is given a small reward when they first sign up and better rewards as they continue to make repeat purchases over time. This usually works better for high-value and high-ticket items like jewelry, electronics, or premium apparel.
Paid
Paid loyalty programs are where the customer pays a membership fee (typically an annual fee) for access to ongoing perks. This can be a year of free shipping or even a discount on every purchase and works well for products like subscription boxes or delivery services. Amazon Prime is a great example of a paid loyalty program, offering members free shipping, among other perks..
Value-Based
These programs connect rewards to what matters most to your customers, such as exclusive events or charitable donations, and really require you to know your target audience. An example of a value-based loyalty program might be getting access to a special drawing for a high ticket item or a donation to charity with every purchase. These tend to work well for lifestyle or mission-driven brands.
Coalition
Coalition loyalty programs involve multiple brands collaborating to offer shared rewards, giving customers more value and broadening each brand’s reach. The great benefit here is the ability to cross promote different audiences to grow the customer bases of all included companies. Coalition Loyalty Programs work best for travel and hospitality brands.
Benefits of Loyalty Programs
Loyalty programs are great because they encourage customers to keep coming back and making purchases. In addition, they build trust between the consumer and the brand over time.
According to statistics, returning customers are 50% more likely to try a new product, and they spend 31% more on average than new customers. It also costs 5X more to acquire new customers than to retain the ones you already have, so giving your customers a reason to keep coming back is crucial.
Affiliate Marketing vs. Loyalty Programs
As you can tell, there’s a pretty significant difference between affiliate marketing and having a loyalty program, and they serve two very different purposes within your eCommerce marketing strategy.
Affiliate marketing focuses on customer acquisition, bringing in new shoppers through trusted partners like influencers, publishers, or coupon sites. These affiliates help your brand reach audiences you might not otherwise connect with and earn a commission for every sale they help drive.
Loyalty programs, on the other hand, are all about customer retention. They reward your existing customers for shopping with you again and again, whether through points, discounts, exclusive perks, or other incentives. Instead of reaching new audiences, loyalty programs deepen your connection with the customers you already have and encourage them to return and spend more over time.
From a cost perspective, both strategies are fairly comparable. Affiliate marketing requires paying a percentage-based commission, while loyalty programs often involve offering discounts or rewards. The difference lies in where they deliver value: affiliates help fill the top of your funnel by driving new conversions, while loyalty programs strengthen the bottom of your funnel by increasing lifetime value and customer engagement.
Should You Have Both Affiliate and Loyalty Programs?
It might seem like a lot to manage, but running both affiliate and loyalty programs together can be one of the smartest strategies for your eCommerce brand. Each serves a different purpose, and when combined, they can complement one another perfectly.
Affiliates help bring new customers into your store through trusted recommendations and unique referral links. Once those shoppers make their first purchase, your loyalty program takes over to keep them coming back.
The result is a full-funnel growth strategy that covers both acquisition and retention. Affiliates fill the top of your funnel by driving conversions, and your loyalty program strengthens the bottom by increasing repeat purchases and customer lifetime value. When both work in harmony, you create a steady cycle of traffic, sales, and brand advocacy that keeps your business growing long after that first click.
Growing Your eCommerce Brand With the Right Mix
As you can see, both affiliate marketing and loyalty programs are designed to give customers a reason to shop with you over the competition. By offering one or both, you can help spur sales and give shoppers a reason to make a purchase.
Looking for more info on how to start a loyalty program or affiliate program on Shopify? Our CAKE team of experts know how to design sweet strategies that drive traffic, boost sales, and keep customers coming back for more. Please contact us today for details!
