February 17, 2025
Glossary
- Loyalty Program: A structured system where customers earn rewards for repeat purchases or brand engagement.
- AOV (Average Order Value): The average dollar amount spent each time a customer places an order.
- CAC (Customer Acquisition Cost): The cost of gaining a new customer.
- Churn Rate: The percentage of customers who stop buying from your brand over time.
- CLV (Customer Lifetime Value): The total revenue a brand expects from a customer throughout their lifecycle.
- Tiered Program: A loyalty system where customers unlock benefits based on cumulative engagement or spend.
- Referral Capability: A feature that allows customers to refer others for rewards.
- Hybrid Program: Combines features from multiple loyalty models (e.g., points + tiers).
Table of contents
Introduction
The ecommerce space is brutal. CAC is surging. Margins are shrinking. Customer attention spans are shorter than ever.
Loyalty programs offer one of the most strategic, long-term solutions to these challenges. Done right, they can increase repeat purchases, turn your best customers into advocates, and help you ride out seasonal sales dips.
This guide breaks down why your brand needs a loyalty program, what type is right for you, how to build one that works, and how to measure its ROI.
Why Loyalty Programs Are Critical for Ecommerce Brands
1. Reduce Dependence on Paid Acquisition
Loyal customers buy more often and cost less to retain. With acquisition costs up over 220% since 2013, the math is clear: keep the customers you already have.
2. Increase AOV and Order Frequency
Rewards motivate customers to add more to their cart and shop more frequently. Loyalty tiers and targeted bonuses can increase urgency and purchase velocity.
3. Mitigate Seasonal Sales Drops
Incentivize purchases with bonus point campaigns during off-peak seasons. Clear out excess inventory while keeping customers engaged year-round.
4. Lower Churn
Engagement reduces attrition. Customers enrolled in a loyalty program are more likely to stick around longer.
5. Brand Differentiation Without Discounts
Price wars are unsustainable. Loyalty gives you a way to compete on value and experience instead of race-to-the-bottom pricing.
What Customers Expect from a Loyalty Program
| Feature | Why It Matters |
|---|---|
| Simplicity | Clear rules and quick onboarding boost adoption |
| Relevant Rewards | Customers want perks they’ll actually use |
| Transparency | Reduces confusion and abandonment |
| Personalization | Makes customers feel recognized and valued |
| VIP Perks | Drives engagement from high-spending segments |
| Flexible Earning | Reviews, referrals, purchases, social follows |
6 Loyalty Program Types (And Which One Works for You)
1. Points-Based Programs
Classic model. Earn points for purchases; redeem for discounts or rewards. Great for high-frequency, low-ticket DTC brands.
2. Value-Based Programs
Let customers donate their rewards to causes they care about. Ideal for mission-driven brands.
3. Tiered Programs
Gamify engagement. Offer increasingly better perks as customers spend more or engage more.
4. Subscription Loyalty
Pay-to-join or auto-renewing programs with added value: free shipping, early access, or exclusive discounts.
5. Hybrid Programs
Combine points + tiers or points + subscriptions for added engagement and personalization.
6. Coalition Programs
Multiple brands share one reward system. Works for marketplaces or lifestyle brands targeting similar audiences.
Building a Loyalty Program That Drives Revenue
Step 1: Set Specific Goals
What are you optimizing for?
- Increased purchase frequency
- Lower churn
- Higher AOV
- Greater CLV
Step 2: Choose the Right Model
Use your product type, price point, and purchase cycle to determine which loyalty structure fits best.
Step 3: Define Earning and Redemption Rules
| Rule Type | Example |
|---|---|
| Earning | 1 point per $1 spent; 200 points = $10 reward |
| Bonus Points | 2x points on first order, birthdays, or reviews |
| Redemption | Free shipping, exclusive items, or early access |
Step 4: Select Strategic Rewards
Match rewards to business objectives:
- Push new SKUs? Offer them as rewards.
- Drive margin? Prioritize low-cost, high-perceived-value perks.
Step 5: Integrate With Key Tools
Ensure your program syncs with:
- Shopify
- Klaviyo or ESP
- Subscription apps
- Reviews platforms
Step 6: Promote the Program Everywhere
Homepage banners, account dashboards, checkout, emails, popups, social posts—every channel should drive awareness.
6 Case Studies: Real Loyalty Programs That Work
| Brand | Loyalty Model | Results |
|---|---|---|
| Edgard & Cooper | Points + Value-Based | 22% AOV lift, 38% retention boost |
| Waterdrop | Tiered | 90% more spend, 70% higher repurchase |
| Clevr Blends | Subscription Hybrid | Monthly point system + early access to new SKUs |
| MAC Cosmetics | Points-Based | Redeemable for core product SKUs |
| Never Fully Dressed | Tiered | “Loyalty Love Rewards” drove 59% higher member spend |
| One Good Thing | Subscription Focused | Bonus points for subscribers vs. one-time buyers |
Tech Stack: Choosing the Right Loyalty Platform
| Platform | Best For | Key Features |
|---|---|---|
| LoyaltyLion | Shopify brands | Points, tiers, referrals, Klaviyo sync |
| Yotpo Loyalty | Medium to large ecommerce brands | Visual loyalty dashboards, advanced analytics |
| Smile.io | Starter-friendly brands | Simple UI, integrates with Shopify & ESP |
| Rise.ai | Credit-based programs | Store credit rewards, great for gift cards |
Measuring Success: Loyalty Metrics That Matter
| Metric | Purpose |
|---|---|
| Enrollment Rate | How many customers opt in |
| Redemption Rate | Tracks reward utilization |
| Repeat Purchase Rate | Core retention metric |
| AOV Uplift | See if rewards are increasing cart size |
| CLV Growth | Long-term financial impact |
| Referral Rate | Word-of-mouth performance |
Frequently Asked Questions
1. What makes a good loyalty program in ecommerce?
Simplicity, personalization, valuable rewards, and seamless integration with your tech stack.
2. How much does it cost to run a loyalty program?
Anywhere from $50/month (starter tools) to $1,000+/month for advanced platforms. Costs vary based on features and scale.
3. What’s the ROI of a loyalty program?
Strong programs see 2x–3x increases in CLV, with reductions in CAC and churn.
4. Should I use points or discounts?
Points give more flexibility and perceived value. Discounts can work but reduce margin. Hybrid models often work best.
5. How do I encourage sign-ups?
Promote through popups, email banners, post-checkout pages, and personalized CTAs based on behavior.
6. How soon will I see results?
Programs often show measurable impact within 30–90 days if promoted effectively and integrated with other retention channels.
Final Thoughts
Loyalty programs aren’t optional anymore—they’re essential. When customers feel seen, rewarded, and motivated to return, your business thrives.
Build your program around real customer data, make rewards matter, and use smart tech integrations to drive scale. The result? Lower CAC, higher CLV, and a brand customers actually want to stick with.
Need help implementing a loyalty program that drives retention and revenue? Partner with Blossom Ecom and let us build the system that keeps your best customers coming back.
Need help implementing this?
Let us take the hassle of managing your email marketing channel off your hands. Book a strategy call with our team today and see how we can scale your revenue, customer retention, and lifetime value with tailored strategies. Click here to get started.
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<p>Glossary Term Definition Abandoned Cart When a shopper adds items to their cart but leaves without completing the purchase. Abandoned Cart Flow A series of emails or SMS sent after cart abandonment to recover the sale. UGC (User-Generated Content) Photos, reviews, or videos created by customers that brands use in marketing. Dynamic Discount Code A […]</p>
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13 Simple Design Hacks Using Klaviyo Email Marketing & Shopify
<p>Glossary of Key Terms Term Definition Klaviyo Campaigns One-time promotional emails sent to a list or segment in Klaviyo. CTA (Call to Action) A prompt that directs the reader to take an action, such as clicking a button or link. Dynamic Coupon A unique discount code generated for each subscriber via Klaviyo. Personalization Token Dynamic […]</p>
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5 Simple Tactics to Grow Your Klaviyo SMS List Without Overcomplicating Things
<p>Glossary of SMS Marketing Terms Term Definition Klaviyo SMS A built-in SMS marketing feature within Klaviyo that allows brands to send targeted text messages and integrate them with email campaigns. SMS Consent Legal opt-in confirmation from a user allowing the brand to send promotional text messages. Landing Page A dedicated standalone web page created for […]</p>
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Why Klaviyo SMS Crushes Other SMS Providers (And How Ignoring It Costs You Revenue)
<p>Glossary of SMS & Klaviyo Terms Term Definition Klaviyo SMS A built-in SMS marketing feature in Klaviyo that allows direct messaging, tracking, and automation using first-party data. Third-Party SMS Providers External platforms (e.g., Postscript, SMSBump) that send texts but don’t integrate deeply with Klaviyo data. Cookie Tracking When a user clicks an email or SMS, […]</p>
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10 Klaviyo Strategies That Drove Over $50 Million for Our Clients
<p>Glossary of Terms Term Definition Klaviyo An email and SMS marketing platform designed for eCommerce brands to automate, personalize, and analyze customer communication. Automation Flow A sequence of pre-set messages triggered by specific user actions like purchases, form fills, or cart abandons. Segmentation The act of dividing your email/SMS list into groups based on behavior, […]</p>
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Email Marketing Management for eCommerce: A Real Guide
<p>Glossary of Key Email Marketing Terms Term Definition Email Marketing Management The process of planning, executing, analyzing, and optimizing email campaigns and automations to meet business objectives. Campaign A one-time email blast sent to a list or segment, typically tied to a specific event or offer. Automation (Flow) A pre-configured series of emails triggered by […]</p>
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Email Marketing 101: How to Create Emails That Convert
<p>Glossary of Key Email Marketing Terms Term Definition CTA (Call-to-Action) A button or link prompting users to take a specific action like “Buy Now” or “Read More.” Click-Through Rate (CTR) The percentage of email recipients who clicked on one or more links in your email. Open Rate The percentage of recipients who opened your email. […]</p>
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Shopify Email Marketing: Campaigns + Automations That Actually Grow Sales
<p>Glossary of Key Email Marketing Terms for Shopify Merchants Why Shopify Email Marketing is a Non-Negotiable in 2025 Email isn’t dead—it’s your most profitable channel. It’s not just for pushing out promos; it’s your always-on sales engine. Here’s why email is mandatory: Metric Performance ROI $36 for every $1 spent Open Rates (Transactional) 50–80% Cart […]</p>
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7 eCommerce Trends to Watch in 2025
<p>Glossary Term Definition M-commerce Mobile commerce, or shopping via smartphones and tablets. AI (Artificial Intelligence) Technology enabling automated learning and decision-making. Social Commerce Shopping directly on social media platforms like Instagram or TikTok. Personalization Tailoring content or offers based on individual user data or behavior. Visual Commerce Using interactive visuals, AR, or UGC to improve […]</p>
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The Complete Guide to Winning at B2B eCommerce in 2025
<p>Glossary Term Definition AOV (Average Order Value) The average dollar amount spent per order. CLV (Customer Lifetime Value) The projected revenue from a customer over the entire relationship. ERP (Enterprise Resource Planning) Software for managing daily business operations. CRM (Customer Relationship Management) Software used to manage customer data and relationships. Net Terms Payment terms that […]</p>
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Answering YOUR Email Marketing Questions
<p>Glossary Term Definition GDPR A regulation protecting personal data and privacy in the EU. CAN-SPAM A US law governing commercial email and ensuring recipients can opt out. Open Rate Percentage of recipients who open your email. CTR (Click-Through Rate) Percentage of people who click a link inside the email. A/B Testing Sending two versions of […]</p>
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What Is Email Marketing and Why Does It Work So Well?
<p>Glossary Term Definition CTR (Click-Through Rate) Percentage of recipients who clicked a link in your email. ESP (Email Service Provider) A platform for creating, sending, and managing email campaigns. Segmentation Dividing your email list into groups based on behavior or demographics. Personalization Tailoring content to individual subscribers using their data. Automation Triggered emails sent based […]</p>
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5 Steps Toward a Successful Email Marketing Campaign
<p>Glossary Term Definition CTR (Click-Through Rate) The percentage of email recipients who clicked on a link in the email. A/B Testing Comparing two versions of an email to see which performs better. ESP (Email Service Provider) A platform like Klaviyo or Mailchimp that helps manage email campaigns. Responsive Design An email layout that adapts to […]</p>
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8 Proven Strategies to Build Your Email Marketing Lists in 2025
<p>Glossary Term Definition ESP (Email Service Provider) A platform used to manage, send, and track email marketing campaigns. Gated Content Valuable digital content made accessible only after providing an email address. UGC (User-Generated Content) Content created and shared by users that promotes a brand organically. CTA (Call-to-Action) A prompt in marketing encouraging a specific action, […]</p>
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How to Supercharge Your Social Media with Email Marketing
<p>Glossary Term Definition Email Campaign A structured email message sent to a list with a specific goal. CTA (Call-to-Action) A prompt encouraging recipients to take an action (e.g., click, follow). UGC (User-Generated Content) Content created by customers and shared on social media. Referral Program A system offering rewards for customers who refer others to a […]</p>
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The No-B.S. Guide to Ecommerce Email Marketing
<p>Glossary Term Definition ROI (Return on Investment) The profit gained from email campaigns relative to cost. CTA (Call-to-Action) A prompt in an email encouraging users to take a specific action. Segmentation Dividing your email list into groups based on behaviors or attributes. Flows Automated emails triggered by customer actions or milestones. Campaigns One-off email blasts […]</p>
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How Email Can Power Your Customer Loyalty
<p>Glossary Term Definition First-Party Data Data collected directly from customer interactions with your brand. Zero-Party Data Information that customers willingly share, such as quiz results or preferences. Dynamic Content Personalized content that adapts based on user behavior or profile. Milestone Campaign Automated emails triggered by key customer events or achievements. Email Flow A series of […]</p>
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How Much Does Email Marketing Cost in 2025?
<p>Glossary Introduction Email marketing isn’t just an optional add-on to your digital strategy—it’s foundational. But the question every eCommerce operator has: How much does it really cost to run effective email campaigns? The answer? It depends. In this guide, we’ll unpack every factor influencing your email marketing costs, from platform fees to creative execution. We’ll […]</p>
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Email Marketing 101: How to Create Emails That Convert
<p>Glossary of Key Email Marketing Terms Term Definition CTA (Call-to-Action) A button or link prompting users to take a specific action like “Buy Now” or “Read More.” Click-Through Rate (CTR) The percentage of email recipients who clicked on one or more links in your email. Open Rate The percentage of recipients who opened your email. […]</p>
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Create a Winning Welcome Email Strategy
<p>Your Welcome Email Cheat Sheet ✅️ Welcome Email Strategy: A series of automated emails sent to new subscribers post-signup. ✅️ Open Rate: The percentage of recipients who opened your email. ✅️ CTR (Click-Through Rate): The percentage of recipients who clicked a link inside your email. ✅️ CTA (Call to Action): A direct instruction (button or […]</p>
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How to Revitalize Your eCommerce Sales in the New Year
<p>Glossary Introduction January isn’t just about resolutions—it’s a strategic window for ecommerce growth. Customers are energized by a fresh start and looking for brands that align with their goals. By leveraging New Year momentum, brands can attract, engage, and retain more customers. This guide breaks down five high-impact strategies (plus a bonus optimization tip) to […]</p>
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Customer Survey Emails: Finding the REAL Reason People Aren’t Buying
<p>📃 Glossary of Terms Term Definition Customer Survey Email A message sent to customers requesting feedback via a questionnaire, often linked to a form. Response Rate The percentage of recipients who complete the survey out of the total who received the email. Buyer Persona A fictional representation of your ideal customer based on data and […]</p>
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E-commerce Email Marketing: Dos, Don’ts, and Essential Tips for CBD Brands
<p>E-commerce Email Marketing has become a crucial tool for businesses looking to engage customers, drive conversions, and build lasting relationships with their audience. Quick Reference Guide ✅ Email FlowA series of automated emails triggered by specific user actions (e.g., signing up, purchasing, abandoning cart). ✅ CTR (Click-Through Rate)The percentage of recipients who clicked on at […]</p>
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The Ultimate Crash Course Email Marketing for E-commerce Store
<p>Email Marketing for E-commerce stores is one of the best ways to grow your business these days. 🔍 Quick Reference Guide ✅ Email FlowAn automated sequence of emails triggered by customer actions (e.g., signup, purchase, cart abandonment). ✅ Trigger-Based EmailAn email sent based on a specific event, like a user abandoning a cart or signing […]</p>
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3 Retention Metrics You’re Measuring Incorrectly + Strategies to Fix Them
<p>Tracking these 3 retention metrics will provide valuable insights into customer loyalty and help you refine strategies to boost long-term business growth. Glossary of Terms Term Definition RPR (Repeat Purchase Rate) The percentage of customers who make a second purchase after their first. CLV / LTV (Customer Lifetime Value) The total gross margin (not revenue) […]</p>
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How to Measure the Success of Your Email Marketing Strategy
<p>An effective email marketing strategy is essential for growing your brand, increasing engagement, and driving conversions through personalized and targeted campaigns. Glossary of Terms Term Definition CRM Customer Relationship Management – the system and strategy for managing customer interactions and data. CLV Customer Lifetime Value – the total revenue a customer generates over their relationship […]</p>
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How to Run A/B Tests in Email Marketing
<p>A/B tests in email marketing allow you to experiment with different elements to refine your campaigns and achieve higher engagement and better results. Glossary of Terms (Quick Reference) Term Definition A/B Testing Comparing two email versions to measure performance of a single variable Conversion Rate (CVR) % of users who take a desired action (e.g. […]</p>
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9 Pillars of Email Marketing Success
<p>Mastering the 9 pillars of email marketing is crucial to running successful campaigns that drive engagement, conversions, and lasting customer relationships. Glossary of Email Marketing Term Term Definition ESP Email Service Provider (like Klaviyo, Mailchimp, or ActiveCampaign) Flows Automated email sequences triggered by behavior (e.g., sign-up, purchase) AOV Average Order Value CLV Customer Lifetime Value […]</p>
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Rethink Customer Loyalty: 7 game-changing strategies to retain customers
<p>Implementing 7 game-changing strategies to retain customers can foster loyalty and build long-term relationships that benefit your business. 🔍 Glossary of Terms Term Simple Definition Customer Retention Keeping customers coming back to buy again instead of losing them. LTV (Lifetime Value) How much money a customer is expected to spend with your brand over time. […]</p>
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Good Email Marketer vs Bad Email Marketer
<p>Understanding the key differences between a good email marketer and a bad one can help refine your strategies and achieve higher engagement and conversions. 🔍 Glossary of Terms Term Definition CAC Customer Acquisition Cost: What it costs to acquire one paying customer CLV / LTV Customer Lifetime Value: Revenue expected from one customer over their […]</p>
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What is MMS and Why You Should Start Now
<p>Glossary: Key MMS Marketing Terms Term Definition MMS (Multimedia Messaging Service) A messaging protocol that supports the delivery of images, videos, audio, and rich text via mobile SMS (Short Message Service) Traditional text messages limited to 160 characters and no media support CTIA The U.S. wireless industry’s trade group, regulating best practices for SMS/MMS marketing […]</p>
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Why SMS is the Marketing Channel of the Future
<p>SMS marketing is quickly becoming the go-to channel for businesses due to its high engagement rates, instant delivery, and direct connection with customers. Quick Glossary: SMS Marketing Terms You Need to Know Term Definition SMS Short Message Service – 160-character text-based messages sent to mobile phones MMS Multimedia Messaging Service – allows sending images, videos, […]</p>
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EDM Marketing vs Email Marketing: What’s the Difference?
<p>EDM Marketing Vs Email Marketing are often used interchangeably, but they have distinct differences that can impact your marketing strategy. Quick Reference: Key Terms & Definitions Term Definition EDM Marketing Electronic Direct Mail – a campaign-based strategy built around personalized, segmented, and behavior-driven email content Email Marketing A broader communication strategy using email to deliver […]</p>
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Case Study: How Smart Klaviyo Email Segmentation Boosted Conversions by 323%
<p>Klaviyo email segmentation helps you send tailored campaigns that resonate with customers and significantly boost engagement and conversions. Key Concepts to Know Term What It Means Segmentation Breaking your list into smaller groups based on behavior, lifecycle, or demographics Deliverability Your ability to land in the inbox—not spam Modular Email Design Template system using reusable, […]</p>
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6 Marketing Strategies to Future-Proof Your Marketing
<p>These 6 marketing strategies will help you boost business growth, enhance visibility, and drive customer engagement. Foundational Terms Term Definition Zero-Party Data Data explicitly shared by customers (e.g. quiz answers, preferences) RFM Modeling Scoring model based on Recency, Frequency, and Monetary value of purchases First-Party Data Behavioral data collected directly (e.g. site visits, email opens) […]</p>
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Mastering Klaviyo Email Design: 11 Tips That Actually Work
<p>Klaviyo email design allows you to create visually stunning campaigns that boost engagement and improve conversion rates. 🔍 Understanding the Terms ✅ KlaviyoA leading email and SMS marketing platform built for eCommerce businesses (especially Shopify, WooCommerce, and BigCommerce). ✅ CTA (Call-to-Action)A button or link that directs a user to take an action (e.g., “Buy Now,” […]</p>
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How to Customize Shopify Email Templates Quickly and Efficiently
<p>Glossary of Email Design & Shopify Terms Term Definition Liquid Shopify’s open-source template language used to pull dynamic data into emails (e.g., {{ customer.first_name }}). MJML (Mailjet Markup Language) A framework that simplifies the creation of responsive, cross-client HTML emails. React Email A modern way to code dynamic, component-based emails using React syntax. Email Client […]</p>
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The Next Frontier of E-Commerce: What’s Coming and How to Prepare
<p>The frontier of e-commerce is marked by innovative technologies and trends that are revolutionizing the future of online retail. Glossary of Terms Term Definition AI (Artificial Intelligence) Computer systems that mimic human intelligence to automate decision-making and improve personalization. Machine Learning A subset of AI where systems learn from data patterns to improve future performance—used […]</p>
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Three Steps to Increasing Your Marketing Email Open Rates
<p>Glossary of Email Marketing Terms Term Definition Open Rate The percentage of recipients who open your email. Calculated by (unique opens ÷ total delivered emails) × 100. Sender Reputation A score assigned by inbox providers (like Gmail) based on your sending habits, list health, and engagement. Segmentation Breaking your email list into sub-groups based on […]</p>
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Best Practices for Optimizing Email Flows with Klaviyo
<p>Optimizing email flows with Klaviyo helps streamline automation, increase engagement, and improve conversions through tailored email strategies. Glossary of Terms Term Definition Email Flow A series of automated emails triggered by customer behavior (e.g. abandoned cart, post-purchase, signup). Segmentation Grouping your subscribers based on shared traits or actions to send more targeted messages. Dynamic Content […]</p>
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Email Marketing ROI: The Most Reliable Revenue Engine You’re Not Fully Using
<p>Quick Reference Guide Email Marketing ROI ✅ Email FlowAn automated sequence triggered by a customer action (e.g., signup, purchase, abandonment). ✅ CTR (Click-Through Rate)The percentage of recipients who click a link in your email. ✅ Open RatePercentage of recipients who opened your email. ✅ SegmentationDividing your list into smaller groups based on behavior, demographics, or […]</p>
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Conquering the Gmail Inbox: How to Keep Your Emails Out of the Junk Folder
<p>Conquering the Gmail Inbox is key to boosting productivity with effective email organization, sorting, and management techniques. Understanding the Terms ✅ Email DeliverabilityThe ability of an email to land in a subscriber’s inbox instead of the spam folder. ✅ SPF (Sender Policy Framework)A DNS record that verifies which servers are allowed to send email on […]</p>
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Refreshed Blog: “SMS Marketing for E-commerce: A Straightforward Guide”
<p>SMS Marketing for e-commerce is a powerful tool to engage customers instantly, increase conversions, and create personalized experiences that drive sales. 🔍 Glossary of Terms Term Definition SMS (Short Message Service) Text-only messages up to 160 characters sent to a user’s phone. MMS (Multimedia Messaging Service) Text messages that include images, videos, GIFs, or audio. […]</p>
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