Steps to Build an E-commerce Loyalty Program

Build an E-commerce Loyalty Program

Online businesses and E-commerce companies are always in pursuit of finding an easy way to drive sales and revenue as well as engage with customers. Customer loyalty programs and reward plans are therefore created and offered extensively to keep their existing customer base interested in the brand and products for a longer duration.

Then, there are also few businesses that are striving intensely to grab the attention of new customers and incentivize their engagement to thwart market competition. In fact, both these methods are relevant in different stages to achieve a decent number as the clientele. But, only smart businesses work on the belief that appealing to an old customer has better odds for guaranteed revenue over scouting for a new one.

And the reasons? Succinctly put, it takes lesser efforts, resources and expenditure given how vast the online shoppers’ community is filtered audience and inspire them to engage in repeated buying activities. From a marketer’s standpoint, dealing with old customers is easier as the business or brand would already have an accurate understanding of the audience profiles and behaviours to devise strategies that drive further engagement with the brand.

These factors are reason enough for brands to vest their precious time and attention in creating customer loyalty programs rather than chasing after convoluted plans to gain new customers.

What Makes an E-commerce Loyalty Program Successful?

A compelling customer loyalty program can best be described as ‘irresistible’ and, in most cases, the rewards on purchases make customers’ buying activities seem worthy and practical. Points earned, sign-up discounts and bonuses, surprise upgrades, discounts and gifts are some of the popular forms of eCommerce loyalty programs that help online retail brands to establish a community of ardent followers and customers. These programs are well-thought through strategizes that strengthen the brand-customer relationship and stall customer attrition. A regular customer would eventually know that the brand is aware of his choices of merchandise and make recommendations of similar products by offering attractive discounts.

That is mainly because loyalty programs take into consideration customers’ psychology, economics and prevailing trends to find the best possible way to keep a customer happy and wanting for more.  

Research findings have time and again proven that rewards and incentive are the biggest motivators for customers to associate with a brand. Almost six out of every ten customers stick to a brand for its surprise offers, rewards and discounts.

Another research by the Yes Lifecycle Marketing found that participants’ age is a useful variant in measuring their responses towards different types of promotions and loyalty plans. For example, nearly 85 percent of the gen X customers were enticed by discounts whereas, millennials reportedly found reward points to be more appealing. Interestingly, another study confirms this fact after they found that over 56 percent of the consumers felt that personalization of loyalty plans improved their brand estimation.

Given below is a step-by-step guide to building a successful E-commerce loyalty program for better customer retention:

    • Measure the Success Rate: The very first step towards building an attractive E-commerce loyalty program involves some deep research on the current bandwidth, customers’ expectations and external variants like market trends, competitors’ marketing and promotional methods, etc to assess the success rates. It involves taking into consideration the ideas that customers appreciate about the brand like availability of functional and responsive E-commerce app or sites for online buying, pricing, availability of latest products and services, customer support, gifts and rewards, acknowledging buyers’ actions with discounts and more to avert risks. A 2017 research by COLLOQUY on loyalty programs suggests easy-to-use, discount and easy-to-understand are top three reasons that makes a reward plan successful.
    • Eliminate Risks and Loyalty Killers: After finding the positives that drive customers to partake in loyalty programs, brands need to identify negatives that make customers abandon their products and services and approach rivals. These are loyalty killers that either make customers remain passive or ignore the reward or loyalty programs. The findings of COLLOQUY delve further into matters that can be turn off for customers and suggests brands to avoid making their programs too time-consuming and less interesting. Programs that require too many follows up and communication or involve irrelevant interactions with customers are huge loyalty killers.
    • Marketing and Branding Loyalty Programs: Once the brand has managed to eliminate risks and factors that can bring down the success rate of loyalty programs, they must share their compelling loyalty program to their customers through marketing. The marketing helps create followers that translate to customers over-time. The branding and marketing methods to promote the loyalty programs must be unique, personalized, resonate with the customers’ needs and expectations from the brand as well as their buying capabilities.
    • Leverage Social Media Presence: Social media helps build a community and increase brand awareness by marketing products, services and also advertising about the E-commerce reward and loyalty programs. This is the best way to assure more sign-ups and registrations and also reward customers with incentives and discounts to make referrals and spread positive word-of-mouth.
    • Invite Followers and Audience: Apart from building a strong online community, E-commerce brands can send invites and request sign-ups from followers and audiences to receive newsletters and marketing emails to inform about the upcoming sales, discounts, products or services.
    • In-app or on-site Advertising: Advertising and promoting reward plans on the website or on the apps are some of the most effective ways of informing customers about the loyalty programs. This method makes the program seem relevant and provide all the useful information to the customers to help them decide to sign-up for the loyalty rewards and plans.
    • Frequent and Timely Communication: Apart from advertising the reward and loyalty plans, E-commerce brands must frequently design marketing emails and send notifications on plans, upcoming changes, upgrades and more through SMS and messages. The timely sharing of information helps customers sign-up for the plans as per their needs and requirements thereby boosting their trust towards the brand.
    • Create Simple and Comprehensible Programs: The thumb rule is to never upgrade or create programs that are difficult to comprehend. It may drive the customers to stay inactive and prevent recommending the plans to their friends and peers.
    • Collaborate Reward Plans with Customers’ Buying Activities: Stalling customers from redeeming plans as and when they prefer can be harmful to the brand in the long run. It is best to align the reward points and incentives to their day-to-day buying activities to organically encourage their online engagement.
    • Make Reward Plans Time-bound: Time factor attached to the loyalty program creates a sort of urgency among shoppers to quickly engage to redeem points or avail discounts and incentives. This strategy when coupled with messages and remainder emails helps customers act quickly.
    • Build Reward Tiers: Reward and program tiers like Gold, Platinum, Bronze, Silver membership that automatically upgrade customers’ plans based on their purchases and activities help both brands and customers to monetize on their buying actions.
    • Encourage Customers to Share Experience and Reviews: Once the brands are certain that the customers are satisfied, they can encourage them to share their reviews and ratings on social media and other relevant platforms. Brands can also include user-generated content and actions that help customers promote them with referrals, shares, likes and Tweets.

Do you have more ideas that help create a successful loyalty program for better customer retention? Let us know by commenting on the section below.

Posted in: Ecommerce

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