Creating an eCommerce Loyalty Program That Converts

Posted by Eman Abulmagd on

In every single business, whether it's corporate, startups or even non-profits. You'll find only three kinds of people who care the most about getting actual sales to the company. The sales department, the marketing department and basically the CEO. Of course every single employee or partner is generating revenue for the company in someway or another (or they won't still be employed in most cases). But these three positions have the weekly, monthly, quarterly sales number in the back of their minds every day.

Source: Pixabay.com

You'll find the marketing department brainstorming their revenue boosting ideas all over their laptops, office boards (and practically any where they find something they can write on. It gets crazy!). You'll find the sales team establishing and executing their sophisticated sales funnels and closing some "major deals" (that qualifies them for some big, fat -and sometimes unfair- bonuses) . And lastly the CEO, the one whose job description can include virtually anything, always thinking of new ways to make business.

Your non-employed employees

For a moment, imagine this. Instead of 3 jobs in your company working to get you more sales. How about getting hundreds of people (or sometimes even hundreds of thousands) to not only buy your products, but actually "care" about getting you more sales. Sounds strange? probably.

In fact, it's not strange at all. You can achieve this by adding a well-crafted loyalty program to your marketing strategy. It will take some effort upfront and might need some financing too. But the return on investment is so worth it. It can turn your normal customers directly into advocates. Choosing to buy from you over competitors, convincing other people to buy it and talking their friends and family into joining their "group orders".

The trick here is this. They're not doing this just because they love your brand. well, they have to love it to a certain extent, but that's not the main motive. In fact, the following statistics about "satisfied customers" are very counter-intuitive.

"According to a recent Bain & Company study, “60-80% of customers who describe themselves as satisfied do not go back to do more business with the company that initially satisfied them.”"

It turns out the exact opposite is true. Customers won't bring you more business just because they're satisfied. We know, it's sad. That's where the loyalty program kicks in. Giving the customers more benefits and incentives to buy again from your business.

Is it worth the effort?

The creating and launching of a loyalty program takes some effort and sometimes (but not always) needs a good budget. And being a more of a long-term marketing strategy it might take some time. According to Shopify:

"By every imaginable metric, loyal customers are the lifeblood of business." So, focusing on fostering and scaling loyalty for your brand is really important. Who said that? well, the numbers did. Let's go through some examples:

Here are some example's from Shopify Plus' article on loyalty programs:

- Pura Vida Bracelets increased referral sales by 300%.

- TheCHIVE’s gamified program drives $135,000 per month.

- Evy’s Tree generated 83X ROI and lifted return customers 58% with a 65% overall redemption rate for their perks with their WHO'S WHOO loyalty program.

- Dr. Axe’s members spent $2.35M more than non-members in 90 days.

- 100% Pure has generated over $244,000 in 18 months from referrals.

What's the secret sauce?

As we said before, customers won't do this kind of intense referrals just because they love your company. When you love a brand, you'll say good things about it when the topic comes up. But that doesn't mean you'll make it your no. 1 choice on the long term or actively talk people into buying from it.

The thing is make it worth their while, to make their referrals and advocacy really rewarding, either on monetarily or psychologically. Craft your loyalty program so that people are well rewarded for referring your company, making repeat purchases and being loyal customers.

How to craft the right Loyalty Program for your brand?

when it comes to crafting your business's loyalty program, there are hundreds of ideas that you can work on that it can even get a bit overwhelming. That's why there are two things that will come in handy during creating your brand's loyalty program. A set of principles and some creative ideas.

We will list what we know about the principles you need to integrate in your program here and we'll give you some ideas that we really liked too.

Principles

* Make it worth their while: When crafting your loyalty program, put yourself in your customers shoes. Are the perks you're offering relevant to them? is it something they're actually interested in? would it direct them to the desired action?
there's no point in creating a loyalty program that gives lame rewards or lousy discounts on products that don't sell (which means your customers aren't really interested in them in the first place).

According to a survey by 2017 COLLOQUY Loyalty Census, the reasons why a loyalty program won't work are:

  1. Took too long to earn points or rewards: 57%
  2. Did not provide rewards I was interested in: 53%
  3. Program sent too many communications: 38%
  4. Communications were irrelevant: 36%

All the previous reasons are directly related to the company's not thinking from their customers' perspective. So make sure that you understand your customers and offer them perks they actually love.

Focus on making them"feeling special": It's really easy to think that Loyalty programs are about better"Sales and offers" for the members. When in reality, loyalty program is more about making your customers feel special. When you choose the perks, make "feeling special and appreciated" your number one focus. Like sending them an unexpected free gifts (or product samples) with their orders, emailing them free vouchers or sending free products (Some brands even go as far as sending their loyal customers flowers) on their birthdays. instead of only offering them monetary discounts, make them love your brand.

"transition the focus from percentage off, points earned, and sign-up bonuses to more experiential rewards like: interest-aligned gifts, surprise upgrades, or exclusivity-based milestones."

Communicate the benefits clearly: As you read in the COLLOQUAY survey mentioned above, when brands communicate the wrong way about their loyalty programs it can easily drive people away. The wrong quantity and quality of communication collectively comprises around 70% percent of why people don't stick to loyalty programs.

Leverage the word of mouth effect: Being social and tribal beings, we tend to trust recommendations from people we trust in our social circles. That's why if you're not integrating a strong referral offer in your loyalty program, you're leaving TONS of money on the table. You can also add a status boost to your program members by giving them personalized promo codes and encouraging group offers, where they get free products or extra points when they make big group orders with their friends. Making them actively convince their friends and family to buy from your business (talking about free marketing here).

Create win-win discounts: where the referrer and the referred both win. For instance you can make it so that the referrer gets points for referring new clients and the referred gets a discount or an extra freebie for buying through the referrer.

Integrate some simple gamification techniques: like making different member statuses where every member gets to the next level (or "Status") through spending more on your store, referring more people or whatever other action you want them to take. You can read more on gamification principles and try applying them to your program.

One of the best examples on this is theCHIVE's gamified loyalty program. It drives the company $135,ooo per month.

Source: https://www.shopify.com/enterprise/loyalty-programs
https://www.shopify.com/enterprise/loyalty-programs

Make it simple to redeem points: Like reaaaaally simple! according to 2017 COLLOQUY Loyalty Census one of the top reasons why people use their loyalty programs is that it's easy to use and understand (this collectively comprised around 90% of why people stick to loyalty programs). There are many ways in which you can implement it in your store (like creating store loyalty cards) or implement it online through your website.

Set metrics and iterate: Before designing the program, set clear objectives and KPIs. Decide clearly on what you want to get out of it, is it more leads? more sales? more traffic? more word of mouth? all of them?

After launching the program focus on which part of the loyalty program brings you the most benefits and expand it, while reducing budget spend and the effort put in channels that don't bring you a good ROI. Your loyalty program's success depends on seeing what works with your audience, what doesn't and constantly optimizing.

Brand it well: Like any other part of your marketing work, you need to brand your program in a proper way. Make it seem down to earth, friendly, inclusive and portrays your customers as more of partners or ambassadors than just mere customers.

Start simple

While there's an overwhelming number of principles, tips and tricks for building a solid loyalty program, it doesn't have to overwhelming to start one. It can be really simple. Just start by choosing one or two features and perks and launch your program with them. Then overtime and with the feedback and insights you get from your customers reaction, you can start expanding and honing your loyalty program in the right direction. As for the implementation, you can implement it in anyway you want, whether it's manual with actual loyalty cards, virtual by store accounts or whatever is more suitable with your brand the behavior of your customers.

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