Ecommerce Growth

5 Keys to Make Your Ecommerce Loyalty Programs Drive More Repeat Buyers

  • Written by Tracy Vides
5 Keys to Make Your Ecommerce Loyalty Programs Drive More Repeat Buyers

Losing customers hurts - and can wreak havoc on your bottom line. Studies have pegged that:

  • The average cost of a lost customer is $243.
  • And the cost of finding new ones is 7x that of keeping your existing ones.

Meaning customer retention is a far more profitable business objective than customer acquisition. One of the best strategies to creating loyal, repeat customers is to offer them rewards for their return. But according to Colloquy’s 2017 Loyalty Census, 54% of members of all ecommerce loyalty programs remain inactive - and 28% leave without redeeming any benefits. Which is why it's key to aim for ultra-relevant loyalty offers that are tailored to your customers’ exact needs. So here are five solid tips to ensure you implement an effective system that keeps people coming back.

SEE ALSO: 7 Retail Loyalty Programs That Maximize Customer Retention (With Examples)

  1. Keep it simple

If your rewards system requires customers to jump through hoops or has unrealistic requirements, then you might as well not have a loyalty program at all. The best part about a loyalty program is the perks it offers. So make sure those rewards are not only exciting, but actually attainable too. If customers have to buy large amounts of product and then only receive a small discount coupon, it’s fairly unlikely they'll bother taking advantage of your program. Instead, offer something reasonable. Like:

  • 50% off after three purchases.
  • Or a buy two and get one free.

These types of deals are easy to understand and motivate your customers to spend more or buy more frequently. Make your system incrementally rewarding, but unambiguously plain. Like online clothing store Gilt does with their points system. Shoppers earn points based on their total purchase amounts. The more they buy, the more perks they get - such as birthday rewards or early access to sales:

  1. Offer members-only perks

Offering a paid membership with exclusive benefits is a great incentive for customers to join - as long as the bonuses pay off in the long run for both parties. The key is to find a balance between:

  1. The membership costs your customers pay.
  2. The cost to your business of providing the benefits.

Getting members signed up then allows you to collect certain data from them. Data that can be used to add personalisation to the mix - like this:

One of the biggest money makers for Amazon is its Prime service because of the many bonuses it offers. Members pay an annual fee and receive free and fast shipping on Prime items for the entire year - incentivising them to buy more and shop exclusively with Amazon. In fact: Prime customers spend over twice as much as non-members. Take a hint from the undisputed leader of ecommerce and offer your customers some members' only perks, like free shipping upgrades or exclusive discounts.

SEE ALSO: Amazon Seller Fulfilled Prime: Everything You Need to Know

  1. Create focused incentives

Remember when you were a kid and you searched through the keychains, fobs and mugs at every gift shop looking for your name? Having something personalised makes it special because it was made just for you. The same goes for loyalty programs. The more tailored it is to a customer, the more likely they are to use it. In fact: Sending a personalised promotion incentivises 65% of customers to make another purchase. That number is likely to go up even more as retailers get better at understanding their own customers' behaviour for personalising promotions. And if you’re an online retailer, it’s definitely getting easier to do just that. No need to push customers to sign in before they buy. The most innovative ecommerce platforms allow you to keep track of your customers' purchases, shipping information and preferences by creating customer segments or profiles. For example, Shopify allows their retailers to:

  1. Find the items their customers frequently purchase.
  2. Ascertain their individual preferences.
  3. Tailor special deals around these specific interests.
  4. And then subtly invite them to join the party with an email:

You can then also use specific software and apps to take personalised emails to the next level. Tools like SmartrMail are great at doing this for online retailers.

  1. Use social media connections

Social media doesn’t need to be solely focused on finding new customers (or banging your branding drum). It can be leveraged to increase the number of repeat buyers by offering special discounts through your platforms. According to a Nielsen study: A whopping 95% of people under the age of 34 would share a product to their social followers if offered a reward - such as a discount or loyalty points.

So designing a referral system exclusively for your social media followers is a great way to jump on this trend and expand your social selling reach. You can offer incentives when people like your page or follow your account, like Themefuse did on their website: Or, use your social media pages to share exclusive promo codes and offers that only your followers will see. Athletic apparel brand Outdoor Voices does this on their Facebook page:

This can subtly encourage your followers to regularly check up on your social media channels. And even share the links with their followers too.

  1. Measure and track ROI

You will need to track the results of your ecommerce loyalty programs regularly to be sure that they're actually providing profitable returns for your business. Most importantly: You'll need to measure how well your loyalty program is bringing back repeat customers. After all, just a 5% growth in retention can lead up to 100% growth in profits, as Frederick Reichheld described in his seminal book The Loyalty Effect. Make your metrics easier to track by building them right into your rewards programs. Tools like Belly Card can help you create analytical reports based on your campaigns so you can check:

  • Click rates on email offers.
  • Repeat visits.
  • Sales from pre-identified sources.
  • Social media reach and sentiment.
  • Churn reduction.

Keep in mind: Loyalty programs are designed to build long-term customer relationships. So if you don’t see amazing results immediately, give it some time before you try something else. Loyalty Lion have a great ebook on working out when the right time is to set up a loyalty program and whether it will bring ROI for your business. Download it here.

Parting words

Everybody loves recognition and rewards, including your customers. Make them feel special and appreciated by offering rewards just for them through personalised or members-only ecommerce loyalty programs. But you can also extend this to social media by releasing exclusive specials to build a loyal following there too. Then measure, track, and analyse the results - and be willing to tweak your marketing campaigns. The ideal ecommerce loyalty programs that work for both you and your customers won’t remain hidden for long.

About the author

Written by Tracy Vides

Tracy is a brand strategist and market researcher who advises ecommerce startups and SMEs on content and social media. She's also a prolific blogger – you can read her insights on business and tech publications like Digitalist Mag, She Owns It and Usability Geek. Connect with her on Twitter for a chat anytime!

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