eCommerce loyalty programs, also known as rewards programs are a key staple of any successful online retail store, increasing purchase frequency, lifetime customer value, referrals, and retention of existing customers.
An eCommerce loyalty program can make use of a huge variety of rewards to get customers on board including; free gifts, exclusive discounts, early product releases, and points for product redemptions to name a few.
But why bother with customer loyalty in eCommerce I hear you say? Whichever way you look at them, loyal customers are worth their weight in gold.
It doesn’t matter if you’ve provided your customers with a top-notch retail experience, research has shown that even when “60-80% of customers describe themselves as satisfied” they do not return to the company that they brought from, crazy right! Customers want more than a great user experience.
Not only this, but major brands such as Costco have shown that using eCommerce loyalty programs means saving time and money- on average it costs 5x less to retain customers than find new ones, and loyal customers spend up to 68% more than new customers!
Loyalty programs provide the impetuous for customers to create accounts, sign up for newsletters, share with their friends, and ultimately spend more. Think of the best eCommerce loyalty programs as the bridge between a quick fling and a meaningful relationship, a bridge that can keep your customers coming back and again and again, hopefully with their friends.
In this blog, we’ll cover everything you need to know and answer questions such as- who needs a program? To why you need one? What are the (innumerable) benefits? And finally, we’ll provide you with our top eCommerce loyalty program idea.
So let’s get started!
Who Needs An eCommerce Loyalty Program?
Everyone! Ok maybe not everyone, but most online retailers will benefit from a rewards program. Particularly:
- Retailers operating in an area where customers a sensitive to price changes. If you’re in the luxury market this isn’t such a concern, but price-sensitive customers respond far better to rewards than customers in the luxury market.
- Different channels? For example, when on your independent site your unique pieces are the main draw, but on Amazon, it’s your competitive prices- increase your ability to compete by choosing to run different loyalty programs.
- Any retailer with stiff competition. Is the marketplace where you’re trading getting claustrophobic? Rather than a competitor snapping up one of your customers, reduce the risk of losing business with a rewards initiative, and save the day.
Why Should You Have a Loyalty Program?
When you use loyalty programs you’re being smart, why? Because you’re aligning your whole, business with the most profitable section of your customer base. You’re tailoring your business to the people that will bring you the most reward -sowing seeds in rich soil. The best eCommerce loyalty programs have far-reaching benefits.
- Loyal customers often convert and spend more with the brands they like, spending on average 67% more than new customers.
- It costs 5x more to find a new customer. So don’t let them go!
- And 78% of those customers are likely to spread the news about your brand to their friends and family.
- Social proof. Word-of-mouth is a force to reckoned with. 92% of people trust suggestions from friends and family over traditional advertisements.
- Give customers a boost up the ladder. Using a loyalty program will automatically move customers up the buying ladder – keeping your repeat buyer’s spending and switch first-time buyers into repeat customers.
- Offer the Olive branch. Customers lose touch with a brand for a variety of reasons, the best eCommerce loyalty programs identify, target, and return lost customers.
- Recognize your best customers. An eCommerce loyalty program identifies your best customers. By recognizing who they are you can start to gain information about your customers which feeds into actionable insights, for advertising, marketing, and future rewards.
- Boost lifetime value. Improve the frequency with which customers purchase and you’ll immediately increase the lifetime value of your customers.
- Your best customers are your biggest influencers. Once onboard they’ll communicate how much they love your brand to their friends and family. To get them singing your praises use rewards, it’ll show you who your influencers are, and give willing volunteers the motivation to go forth and spread your brand message.
- Reduce marketing expenditure. Knowing who your best customers are means you can target your marketing with greater accuracy – using the profile of your best customer as a guide. This means marketing can be invested in attracting customers who are going to have greater lifetime value to our business, whilst sifting out one-time wonders who are unlikely to add great value.
- Set you apart from your competition. With everyone moving online it’s incredibly difficult to remain visible, loyalty programs illuminate your brand and keep the attention firmly on your product.
Before Setting Up a Loyalty Program
Consider what kinds of rewards you’re going to offer.
From gift vouchers to percentage off and free shipping. Think about what your customers want/ need, there’s no point in throwing cash at people when you’re loyalty rewards program is difficult to use. Easy-to-use loyalty programs will consistently outperform complicated ones. Keep it simple.
Work out how customers will redeem and use their rewards.
Once a customer qualifies for a reward, you’ll need to work out how they can access and use their rewards. Often businesses make it difficult for customers to redeem their rewards, making the customer manually redeem points, or using coupons or gift certificates that are difficult to use. Keep it simple, and easy to get customers using your rewards program and marketing your business.
What actions will be rewarded?
It sounds obvious, successful loyalty rewards programs reward customers making repeated purchases. And as much as this is true there are other reasons why you want to reward your customers.
Consider what actions you want customers to take.
Remember customers are your marketers, reward them for store registrations, social shares, newsletter sign-ups, maybe its’ user-created content, think customers taking pictures of themselves in your latest designs shared to social media. Whatever action you wish to elicit from your loyal customers, reward it.
20 ideas to make sure your loyalty rewards program wins…..
Build a Community
People want to feel like they belong. In increasingly distanced times, people are missing the chance of being part of a physical group, to feel connectedness and a sense of belonging. This is really powerful stuff, providing a community for your customers to feel included satisfies social urges that go back to when we lived in caves. How to do this? Make your rewards program feel transactional, but make sure there are other ways to earn rewards- sharing, liking social media posts, leaving a review, anything that helps spread your message, and get people involved.
Here Evy Tree excel. With a clear, easily accessible rewards program customers can see exactly what they get for being part of the team and liking and sharing.
Brand Your Program
Continuity is key. Providing a complete brand experience is a necessity if your brand image and message are to reach customers and stay with them. Make sure that your loyalty rewards program has the same consistency as the rest of your marketing, after all your brand message takes effect. According to techipedia brands with consistent marketing, messages are worth 20% more than those with inconsistencies.
Just as when you set out on planning a marketing campaign consider what the program name is, does it match the feel of your brand? Does the program connect with the look of the rest of your branding? And make sure your rewards program stands out- after all you want customers to use it!
Know the Keys to Loyalty Success
There’s a lot of research out there on the cornerstones of successful rewards programs, it would make sense to use this information. So what are the keys to securing loyalty from your customers?
It’s quite clear what people need in order for them to become loyal customers. Make sure that you acknowledge their loyalty and then reward them by sharing small gifts. But specifically, what is it about a loyalty program that makes it successful? According to research by COLLOQY which shows US consumers hold a staggering 3.8 billion memberships the keys to a successful reward program are:
- Easy to use 53%
- Gives great discounts 39%
- Easy to understand 37%
NO WHAT DOESN’T WORK! With 3.8 billion memberships there are a huge number of inactive memberships out there, around half do not get used. So what mistakes do you want to avoid? First make sure rewards aren’t too hard to earn, if they are customers will go elsewhere. Second, make sure rewards are relevant and wanted- there’s no point in providing rewards nobody wants. Thirdly, stop bombarding nice people with reminders about the program, it’s a big turn-off! Lastly, make sure what you’re saying to your members is relevant.
Avoid these pitfalls to increase your chances of creating a successful program.
Don’t Be Afraid of Memberships
Most loyalty programs are free, however there is an option for customers to pay you for a membership to your loyalty program. Why would a customer do such a thing? Where free programs are there to increase retention, engagement, and purchasing, a paid membership creates a sense of exclusivity, something that consumers are valuing more and more.
Amazon Prime is a classic example of such a program. For a flat annual fee, Prime members gain access to unlimited two-day shipping, Amazon’s streaming service, and Prime Day Sales.
All the items you find on Amazon you can find elsewhere, so it’s the service provided through Prime which differentiates it from the rest and really elevates Amazon above the competition. And it’s successful, on average Prime members spend 4 times more than other customers.
With so much competition out there exclusivity and access to options, others can’t have really helps to add a point of difference between you and your competitors.
Where is it? There’s no point in having a loyalty program with well-thought-out rewards if customers can’t see the program. It sounds so simple, however choosing when and where you’ll advertise your program is of high importance. The more visible your program the better it will perform. You can use the site’s homepage banner, emails, thank you page, and any other onsite areas to increase visibility. Clear, bold, uncluttered, and obvious, don’t hide your program, put it on show!
Clearly communicate the benefits
There are hundreds of different options when it comes to loyalty rewards; tiers, rewards, points, the list goes on. It’s all irrelevant if the benefits are unclear, there’s a complicated system of acquiring points, and/or nobody knows how the program works. Start out with clear goals, put yourself in the shoes the shoes of the customer and ask:
- What’s in it for the customer. What exactly is the reward for each action?
- What is it you wish to achieve through providing the reward, what action- referral, repeat purchase etc?
- Calculate what actions will receive what rewards. If a customer re-shares your post twice do they get double the reward? You don’t want to turn off customers when they feel they’re not getting the reward they deserve for the action you requested!
- Explain it. Have a dedicated page easy to read information, and clear unambiguous graphics.
- Integrate reward redemption post-checkout. You already have the attention of the audience, it’s a perfect time to talk about your message.
Offer easy ways to redeem points
One sure sign your program is working is seeing customers redeeming and using their points. Do your best to make both earning and redeeming points as seamless as possible. Supply points often enough so that loyal, high-value customers receive rewards within three months and others outside that bracket within six months.
Enable customers to receive rewards not just for making purchases, but also for other actions. Decide upon what reward will match what action, and make it easy for your customers to understand what they’ll be getting and how to use it.
Here Ghost does an excellent job of integrating their whole program with their entire product line, making it incredibly easy for customers to redeem their points for any product on the website. With 25,000 ,
Use all your channels
Multi-channel or omni-channel retailing is where we’re atFacebookeCommerce world. A harmonious transition between different channels, website, Facebook, marketplaces is what consumers now expect, with consumers moving between multiple channels before making a purchase. A loyalty rewards program needs to be savvy towards this, so use each channel as a platform to promote your rewards program.
Understand how to help customers sell for you. We’re not just talking about referrals and sign-ups, oh no there are many ways you can let customers sell for you. Take the brand Pura Vida, using a clever multi-channel program utilizing Instagram, a tiered referral program, and an email marketing campaign to amas a roup of “micro-influencers” to spread the word.
How did Pura Vida bracelets do this? By using social media to actively market their goods, even providing photos to use. They then incentivized their influencers with a tiered reward system.
Tier 1: After a rep’s sale, Pura Vida send them five bracelets, a sticker, and marketing cards
Tier 2: After a rep’s third sale, they’ll receive the Pura Vida charm bracelet.
Tier 3: After a rep’s fifth sale, the company sends each rep a special Pura Vida Staff Logo t-shirt.
The result of this engagement with their customers, now reps? Sales reps have increased year-over-year sales by 300%, the average order value is 11% higher than normal sales, and cost per acquisition is 7x higher outside the influencer program.
In the same way, Pura Vida enlists the help of customers to become reps, eCommerce retailers can use customers to create user-generated content (UGC). Why is UGC useful?
- According to the Nielsen Consumer Trust Index, 92% of consumers trust user-generated content above more traditional advertising.
- Marketers consistently cite insufficient resources as their biggest challenge, alleviate the stress and save time by letting your customers do it for you.
- 25% of search results of the Worlds Top 20 biggest brands are links to UGC.
UGC and social media go hand in hand, but how to get your customer on board and creating? Top ideas for igniting user’s creativity include; creating a custom hashtag and asking for users to post pictures of themselves, ask a question or create a challenge on Twitter or Facebook, launch a video contest.
eJuices engage with their fan base, by asking for users “vape story”, offering rewards based on the user’s positive experience of the brand, and allowing customers to earn points by promoting the brand on social media.
Multiple entry points to your program
When you set up your loyalty program you might want to consider diversifying your entry points. What do we mean? Smart companies present customers with different ways to become a member of their program.
Sand Cloud Towels sells boutique towels and a chance to help save the oceans. Its mission and ethos resonate with many, to become a brand ambassador you can sign up for free. By joining their VIP club you’ll gain access to a host of exclusive features including free shipping, merchandise giveaways, and exclusive offers, to name a few.
Sand cloud donates 10% to non-profits, and ambassadors only need to be 13 years of age or older. Young people want to have their say on environmental issues, enabling young people to become ambassadors not only market your brand to a younger audience but allows them to support a great cause.
Match tiers to spending levels
Similar to Sand Cloud Towels’ use of different entry points, paid vs free that 100% Pure uses to motivate customers. Depending on the amount you spend you’ll receive different discounts/ rewards. By clearly seeing the different tiers, and setting out the difference in rewards between each level leaves no guesswork for the customer. Not only this but having distinct goals shows a clear path to progression (and greater rewards). From free redeemable rewards through the lowest tier named “pure enthusiast”, to exclusive free upgraded shipping on all orders for the “pure revolutionist” top tier. 100% Pure must be doing something right as a mind-bending 92% of customers go on to purchase an additional five times after their fourth purchase.
We’ve tried to cover a broad selection of different eCommerce loyalty reward program ideas, the ones we’ve seen businesses use that really help customer loyalty in eCommerce. Of course, this doesn’t cover all the options out there- there are just too many! What we have tried to do is give you high-impact, low-fuss ideas which don’t cost the bank to implement.
There are many reasons why businesses should provide a program for their customers, whether it’s for the short term or long, rewards programs (if done right) increase turnover by:
- Generating user engagement and increasing trust in your brand, social proof = attracting new customers.
- Repeat purchases- remember members of loyalty programs will spend more and more often.
- Retaining customers- it’s an expensive business finding new customers, just keep the ones you have by using innovative program ideas that match the needs of your customers.
- Reducing expenditure on marketing by using your customers to become valued members of the team, by creating UGC, and even becoming reps for your brand.
Whether your in a crowded marketplace and need a plan to set you apart from the competition, or a retailer in a price-sensitive market, loyalty rewards programs are there to give you a boost. We’d love to hear from you, so if you’ve tried some of the above ideas, or have found other routes to success get in touch. If you’re unsure where to start we’re here to help, with an expert team of eCommerce experts we have the knowledge and skills to make all and any loyalty reward program work for you.