While a lot of businesses leverage their loyalty program platforms to reward and retain their customers, some use it to reward their partners and sellers apart from their customers. The concept is known as marketplace loyalty programs.
As per a recent study, many successful companies are giving more focus to their marketplace loyalty programs. Another research found that businesses with robust marketplace loyalty programs enhance their revenues two and a half times quicker than their competitors.
Now the question comes “If regular loyalty programs have worked well for so many years what’s the need for a new type of program?”
The answer to that is in a constantly evolving marketplace, innovation is the key to success. With the boom of e-commerce, many businesses are looking for ways to retain their third-party sellers. That’s why some have designed separate rewards for their partners and sellers in addition to their customers.
At LoyaltyXpert, we know the potential of marketplace loyalty programs and how their adoption can benefit all parties. In this blog post, we have discussed seven advantages of marketplace loyalty programs.
Advantages of marketplace loyalty programs
Marketplace loyalty programs are gaining traction in the corporate world for their several benefits. Here are some of them.
Incentivize partners and sellers to stay loyal
For many businesses, a majority of sales come from third-party sellers. Let’s take the example of the world’s largest online e-tailer Amazon. Third-party sellers account for over half of its total sales. In such a case, it’s crucial to find innovative ways to incentivize partners and sellers to stay loyal. Enhancing loyalty programs is the smartest and the most natural way to incentivize sellers. In the case of Amazon, the e-commerce behemoth has devised a special loyalty program for its sellers, known as Seller Rewards Program. It provides its sellers with the opportunity to win rewards for their efforts and loyalty.
Allow sellers to provide their loyalty programs without any additional investments
Even though creating a loyalty program is not expensive, there are some setup costs involved. Some third-party sellers prefer not to invest money and time on loyalty programs and they don’t offer any loyalty points and rewards to their customers. Marketplace loyalty programs allow them to provide their loyalty programs and rewards without any additional investments. They can provide incentives and rewards without worrying about creating and managing complicated programs. Other resellers with existing loyalty programs can also benefit from marketplace loyalty programs. It enables sellers to control the way they engage with customers.
Provide partners and sellers a tool to attract customers
As per a recent stat, three out of four customers say they prefer businesses that provide incentives and rewards. The data makes it more obvious that loyalty programs attract more customers. Resellers and third-party vendors that don’t have their programs struggle to attract new customers. But marketplace loyalty programs give them a chance to do that. In case the third-party sellers have their loyalty programs, they can add on the marketplace loyalty program with their programs to attract new customers and provide them with better offers and deals.
Encourage customers to use favored payment methods
After the fintech revolution and pandemic, online payment and contactless money transfer became the most preferred payment methods for many businesses. Some large e-commerce players like Amazon and Alibaba have their mobile wallets. But many customers have still not started using digital payments. With marketplace loyalty programs, they can encourage their partners and customers to use their preferred payment methods. The businesses that have integrated their mobile wallets with their loyalty programs provide various rewards to customers who make the payment by using digital wallets.
Gain valuable customer insights
Businesses that collect key customer insights and use the data effectively are better able to serve their customers, provide them with a superior experience, and get more sales and revenues. Doing so, they not only win the hearts of customers but also remain ahead of the competition. By using marketplace loyalty programs, businesses can understand customer behavior, buying preferences, brand preferences, and trends across a wide range of categories. Businesses that have access to accurate insights can track their customer behaviors and make highly relevant and tailored recommendations.
Create a community for customers
By leveraging marketplace loyalty programs, brands can build communities for their customers and provide them exceptional shopping experience. Communities are known to have many positive impacts on businesses. As per new industry research, nearly 60 percent of communities have a positive impact on business goals and 74 percent directly impact culture and brand. By creating high-quality programs, businesses can engage with community members and build robust relationships with customers.
Win-win solution for all parties
A well-designed marketplace loyalty program is a win-win solution for all parties. It helps businesses partner with high-quality third-party sellers and leverages their platforms to sell their products. It encourages third-party sellers to join hands with large businesses and benefit from their loyalty programs and attract new customers. It enables customers to get attractive discounts and offers for further transactions as well as incentivizes them to maintain their relationship with their favorite brands.
Taking everything into account,
Marketplace loyalty programs are emerging as one of the most effective loyalty programs. These programs enable businesses to reward their partners and sellers in addition to their customers. Many leading companies have adopted and are getting excellent results.
At LoyaltyXpert, we can design excellent marketplace loyalty programs for all kinds of businesses and customize the rewards and loyalty points as per their preferences. If you are looking to adopt a marketplace loyalty program in your organization, contact our team to know how we can help.