Growing Your Business Online With Loyalty Programs

Growing Your Business Online With Loyalty Programs
This is​ the​ first in​ a​ series of​ articles we will be publishing relaying thoughts and ideas from the​ Internet Retailer Conference in​ Chicago,​ which occurred June 5th through June 7th .​
Mark Goldstein,​ CEO of​ Loyalty Lab (a company that implements loyalty programs for merchants),​ and Gary Korotzer,​ CMO of​ Red Envelope (a company that specializes in​ selling gift items),​ delivered a​ presentation about loyalty programs .​
Red Envelope currently has a​ loyalty program managed by Loyalty Lab.
Loyalty programs are taking off .​
If you​ have a​ retail web site and you​ don't have some kind of​ loyalty program...chances are that by the​ end of​ next year you​ will .​
Jupiter Research expects that by the​ end of​ 2018,​ 78% of​ retailers doing business online will have a​ loyalty program,​ compared to​ 24% now .​
So what's the​ big deal?
It costs a​ lot more to​ generate a​ new customer than to​ sell to​ a​ repeat customer .​
Loyalty programs allow you​ to​ build a​ customer base that is​ loyal to​ your products,​ and will continue to​ purchase from you,​ rather than your competitors .​
a​ loyalty program is​ some kind of​ program that allows your customers to​ build up credit to​ apply to​ further purchases,​ or​ to​ redeem for cash .​
For example,​ a​ retail web site could grant a​ customer points for every purchase he makes .​
When he has enough points,​ he can redeem them for a​ discount on​ more merchandise,​ or​ possibly redeem them for cash.
To implement a​ loyalty program,​ you​ need some way to​ keep up with your customers' accrued points (or whatever kind of​ measurement you​ use) .​
This should be done by keeping records of​ a​ customers' transactions in​ a​ database .​
Goldstein and Korotzer recommended tying the​ information to​ a​ customer's credit card number .​
Every time a​ customer makes purchases with a​ particular credit card,​ a​ record of​ the​ purchase is​ recorded along with the​ credit card number .​
In this scenario,​ if​ a​ customer used a​ different card than in​ previous purchases,​ her existing loyalty account would not receive additional credits.
You should try to​ make it​ easy for a​ customer to​ know how many points they have .​
Out of​ sight,​ out of​ mind,​ as​ the​ old saying goes,​ so make sure your customers are aware of​ how many points they have and how many more they need to​ redeem their rewards.
When you​ begin the​ process of​ deciding on​ the​ details of​ your loyalty program (exactly what participants will receive,​ and how much they have to​ purchase for redemption),​ Goldstein and Korotzer argue that you​ should explore your company's economics as​ deeply as​ possible .​
Two important statistics to​ examine are the​ lifetime value and acquisition cost of​ your customers .​
This will better help you​ determine how much you​ can afford to​ give to​ your customers .​
Another critical consideration is​ exactly who gets to​ participate in​ the​ program .​
You may choose to​ only extend an​ invitation into the​ program to​ the​ top 20% (or whatever percentage generates the​ majority of​ your revenue) of​ your customers .​
If there is​ a​ segment of​ your customer base that represents the​ majority of​ your income,​ then it​ makes sense to​ concentrate your marketing dollars on​ that group.
Another point that Goldstein and Korotzer emphasized is​ that your loyalty program should be cross-channel .​
In other words,​ if​ you​ operate a​ physical retail location and take orders by phone in​ addition to​ your web site,​ the​ loyalty program should extend to​ all of​ the​ channels .​
Avoid confusing your customers .​
Make it​ easy for them to​ gain credits and cash in​ on​ their loyalty regardless of​ what channel they use to​ make purchases.
Loyalty programs have been around for years in​ certain industries (i.e.,​ airline frequent flyer miles) but are just starting to​ gain traction with a​ lot of​ retailers .​
If you​ sell retail,​ you​ should begin the​ process of​ researching the​ implementation of​ a​ loyalty program now - before your competition does .​
Feel free to​ contact Work Media for information on​ implementing a​ loyalty program for your web site.
Growing Your Business Online With Loyalty Programs Growing Your Business Online With Loyalty Programs Reviewed by Henda Yesti on July 21, 2018 Rating: 5

No comments:

Powered by Blogger.