Whether you’re launching a brand latest business or you’ve been running a successful online shop for years, retaining customers is a part of the gig.
Without loyal customers, brands will fail to thrive and survive online. Fortunately, there are quite a few ways to entice customers into becoming loyal brand ambassadors, considered one of them is fairly straightforward — loyalty programs.
Learn find out how to design a loyalty program that works for your online business and keeps customers coming back for more.
Importance of Loyalty Programs
Interested in the advantages of loyalty and rewards programs? You’re in the right place! But first, let’s break down exactly what a loyalty program is.
At its core, a loyalty program is implemented by a business to entice customers to proceed shopping with them. Simply put, it’s a program that rewards customers for their loyalty.
Loyalty programs offer customers special discounts, coupon codes, freebies, and other perks that encourage them to keep purchasing.
Increase Customer Lifetime Value
Customer lifetime value (CLV) is defined as the amount of revenue a customer brings to a brand over time. When brands arrange a solid loyalty program, they boost CLV by getting customers to keep coming back and forming lasting relationships with them.
When customers feel appreciated and valued through exclusive discounts and rewards, they usually tend to proceed purchasing from that brand as an alternative of in search of out competitors.
Stand Out from the Competition
So, how does a loyalty program make a brand stand out against the competition? We’re glad you asked.
When a shopper makes a purchase and has a positive experience, they’re more more likely to return to buy again. Nonetheless, if they purchase and receive a discount code or a special offer, they’re much more more likely to make one other purchase!
That’s how loyalty programs improve a brand’s retention rate and set them other than the competition.
Meet Customer Expectations
One other critical factor is that customers expect brands to offer a loyalty program. Loyalty cards, point systems, and other rewards have change into the norm in many industries.
In line with this survey, loyalty programs influenced purchasing decisions for an average of almost 8 out of 10 US consumers.
Shoppers have certain expectations from loyalty programs, too. Six in 10 US consumers sought discounts for joining loyalty programs. This feature ranked as the top feature, with earning points and rewards following closely at 58%. A couple of third of US consumers valued exclusive product access.
Understanding the Fundamentals of Designing an Effective Loyalty Program
Before you start making a customer loyalty program, there are a few things it’s essential to prioritize as you strategize what’s necessary.
Take a Customer-Centric Approach
Without understanding the true wants and needs of your customer base, you may’t create an effective loyalty program. You could think offering standard discounts or coupon codes shall be enough, but there’s way more opportunity for personalization.
By offering unique discounts and freebies based on their shopping behaviors, you may hone in on the specifics of what your customers need to prove your value as a business and show how well you understand their needs.
For instance, if a customer incessantly purchases skincare products, you may offer them a free sample of a latest product or exclusive access to a limited edition line.
Farfetch’s Private Client loyalty tier provides exclusive advantages like a fashion concierge and personal stylist to
Set Clear Objectives
To launch and maintain an effective loyalty program, having clear objectives is critical. Some common objectives or goals of a loyalty program may include increased revenue, increased repeat purchases, higher average order value, customer satisfaction, and customer lifetime value.
By setting clear goals early on, you may properly measure the effectiveness of your program and make any needed adjustments.
For instance, if your goal is to increase repeat purchases, you may track the variety of times a customer returns to make a purchase and see if it has increased since implementing the loyalty program.
Establish a Strong Value Proposition
Why should customers select your loyalty program and your online business over a competitor’s?
The worth proposition sets the stage for attracting customers and keeping them for the long haul. This message should clearly explain why shoppers should persist with your brand, what the program offers, and the way you’re different from the other fish in the sea.
For instance, you could possibly arrange a tiered loyalty program that provides more advantages as customers move up the ranks. Say, for every $1 spent, they earn one point and can redeem those points for rewards or discounts. As they reach higher tiers, they might gain access to exclusive perks akin to free shipping, early access to sales, or personalized offers.
The Lululemon membership’s value proposition lies in its emphasis on experiential benefits, akin to events and
Common Sorts of Customer Loyalty Programs
Customer loyalty programs aren’t a
That’s why it is smart to examine some common loyalty program examples and types before deciding which one most accurately fits your online business.
Businesses use a few several types of customer loyalty plans to attract, engage, and retain shoppers. Let’s discuss a few of the best rewards programs here.
Points-Based Programs
Certainly one of the famous loyalty program examples is Starbucks Rewards, a
Starbucks Rewards is easy to understand and versatile in its offerings, making it a popular alternative for coffee lovers across the world. This system is straightforward to use via the Starbucks mobile app for additional consumer
Starbucks customers can unlock additional rewards by using specific payment methods
Tiered Programs
Tiered programs are one other way that brands may give rewards to loyal shoppers and keep them engaged for longer.
An example of a tiered program is Sephora Beauty Insider, where customers proceed to move up the tiers based on how much money they spend. The more they spend, the closer they get to unlocking exclusive advantages and freebies based on their shopping behavior.
Sephora Beauty Insider is a genius customer retention strategy since it encourages more spending and
Sephora’s Beauty Insider loyalty program consists of three tiers
Paid Loyalty Programs
When a brand has enough customer loyalty in its customer base, paid loyalty programs are an effective solution to keep their shoppers interested and loyal.
Amazon Prime is the perfect example of paid loyalty, where customers pay a membership fee for exclusive perks like free
From a business perspective, paid loyalty programs offer fast revenue for a business and keep highly engaged customers concerned about what you may have to offer.
Fast, free, and convenient shipping options are considered one of the essential perks of Amazon Prime
Of course, this loyalty program list is not exhaustive. You need to use other loyalty programs depending on your online business type and goal. Take a look at the detailed list of effective loyalty programs in this text:
Making a Loyalty Program That Suits Your Business Needs
Now that you just understand the various customer loyalty programs you should utilize, you will have an idea of what type you’d wish to leverage together with your brand. When deciding on a customer loyalty program, be sure to consider the following.
Program Goals
What do you must achieve with a loyalty program? Are you hoping to increase repeat purchases or improve engagement? While a tiered program may improve repeat purchases, a
Budget & Resources
Consider the cost of the program and how much time and energy it will take to get off the ground. For instance, offering customers loyalty points for each purchase could also be easier if you’re just getting began as a brand and have minimal resources to launch a fully
Customer Base
By understanding what your customers want, you may determine the kind of loyalty program that may best resonate with them. If they’re searching for fast gratification, a
Walmart’s loyalty program resonates with its customers’ core value of saving money and aligns with its brand positioning as a
Considering all those facets, you may create the best loyalty programs tailored to fit your online business needs.
Strategies for Sustaining Customer Engagement
Once you understand what program you’ll be pursuing, it’s time to start hammering out the details! Keep the following in mind as you strategize an effective customer loyalty program for your online business.
Engagement Tactics
Keep customers enthusiastic about your loyalty program by engaging with them in easy ways. Post on social media, send monthly newsletters and promote the program in your ecommerce shop. Entice customers to enroll and gain access to the rewards you’re offering.
Personalization
There isn’t a more necessary strategy in marketing than personalization in this digital world. Consumers expect shopping experiences that leverage their behaviors to offer products and services that may profit them in meaningful ways.
That applies to loyalty programs, too. 43% of consumers found loyalty programs with flexible rewards necessary for a personalized experience from a company or brand.
Adidas offers free shoe personalization options to its Level 3 loyalty program members
Ensure your customers feel like a part of your brand by providing tailored rewards, no matter where they’re in the buyer’s journey.
For instance, you may provide specific product recommendations to particular customers based on their buying habits.
Say a customer bought a specific mix of coffee beans from you 4 times. You would possibly consider providing them with a discount on their next purchase of that specific mix or recommending a discount on latest blends that align with their preferences.
Tailoring your loyalty program to each customer could seem inconceivable, but with
Hearken to our podcast to delve deeper into using
Regular Communication
Keep your loyalty program top of mind with customers by providing consistent communication. Send emails reminding them of their point status, latest rewards opportunities, or special promotions which might be launching.
Gamification
Encourage customers to take part in your loyalty program through gamification strategies to make it a fun,
For instance, you may create social media contests throughout the program where customers can collect additional loyalty points by completing certain tasks, like posting on social media or engaging together with your brand.
If you sell online with Ecwid and are searching for customer loyalty software, the Gratisfaction app can show you how to gamify your loyalty program.
The Gratisfaction app helps gamify your loyalty program
An alternative choice for Ecwid stores is the Kangaroo Loyalty Rewards. Beyond offering gamification features, this app allows you to arrange ambassador and tier programs.
Exclusive Access
Offer exclusive deals and access to VIP customers and program members to construct brand loyalty and entice others to join.
With early access to latest products or attending
IKEA Family loyalty program doesn’t reward customers based on spending; as an alternative, it offers exclusive experiences like free furnishing workshops together with other perks
Wrap Up
When done right, a loyalty program can foster brand loyalty, improve engagement, increase revenue, and construct a loyal,
