Loyalty Programs in Ecommerce – Dos and Don’ts

Loyalty Programs in Ecommerce – Dos and Don’ts

Loyalty programs are a standard when it comes to ecommerce marketing. Before sinking your teeth into creating one, it is important to know how to make it work for you and your customers.

Do Set Goals

What is it that you want your loyalty scheme to achieve? Is it to drive traffic during slow periods, find new customers or increase spending? Once you have outlined your goals, it will be easier to tailor marketing efforts and align it with your customer needs and business objectives.

Don’t Set Out of Reach Targets

If you set out to triple your revenue within a matter of weeks then it is unlikely the goal will be met. Loyalty programs need some time to mature so although it may feel like it is off to a slow start, in time your business will start to reap the benefits.

Do Make Signing Up Easy

The most successful programs have multiple ways for customers to sign up, such as in-store, online, via email or by text. Only ask for basic information and use the customer’s preferred method, such as through a mobile app.

Don’t Make It Overcomplicated

Overcomplicating your loyalty program will only serve to confuse your customers, so keep things simple.

Your customers don’t want to read through long, complicated forms. Neither will they sign up to a program where they don’t understand what they can get out of it.  Make the rewards simple and easy to understand with information available on different formats.

Do Offer a Tiered Program

Gilt Insider Points encourages users to engage with their program by offering an effective tiered program. Customers are incentivized to shop online and be more active with their program, with rewards such as early access to sales and new products for moving up a tier.

Do Run ‘Extra Points’ Events

Set days where your customers can earn extra points during a specific time period. This could run for a day, week or longer, however, it is better to keep the time frame shorter to maintain the feeling of exclusivity and make the event seem rare. A week is usually a good amount of time.

Nordstrom’s ‘extra points’ scheme is hugely successful and is a great way to boost extra engagement.

Don’t ‘Sticker Shock’ Your Customers

According to a study in 2015 of 500 leading global brands, cart abandonment rates rose to 75.6 percent in retail, travel and fashion. This was in large attributed to ‘sticker shock’ where customers reached the basket after seeing tax and delivery costs supplied.

Amazon set out to combat this with their Prime loyalty scheme. For an upfront fee, customers get quick and free delivery on millions of products with no minimum purchased required. In addition, they receive access to films, TV programs and ad-free music streaming.

A 2015 report by Consumer Intelligence Research Partners showed that Prime members spend on average $1,500 per year on Amazon, compared with $625 year spend by those who aren’t Prime members.

Author Gyles Seward

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