How to take your eCommerce loyalty program to the next level
Loyalty programs have barely evolved since their inception – a standard program is now an expectation, not a bonus. Customers want more – how can you give it to them?
We recently explored the ideas behind emotional loyalty, and how you can incorporate them into your strategy – but for this post, we’re going to laser-focus on loyalty programs, to really dig down and decide how you can make your program stand out.
Why should consumers choose you – and your loyalty program – over your competitors’? Let’s find out…
Loyalty programs are a proven retention tactic
Loyalty programs are proven to increase customer spending – loyalty program members spend 12-18% more per year than non-members. Additionally, 69% of consumers say their choice of retailer is influenced by where they can earn loyalty points – and with so many brands out there offering similar (or the same) products and services, a loyalty program could be what sets your brand apart from the competition. This is especially important for eCommerce retailers who are stockists of third-party brands.
As well as offering the same products or services, many brands’ loyalty programs use the exact same format – and they’re missing a trick. With no differentiation between brands, where they all have the same cut and paste loyalty program, customers don’t feel the need to stick to one brand, as they can just opt for whoever is cheapest. If your brand isn’t the cheapest – and there’s plenty of great reasons not to be – you’re going to lose out here, so to stay ahead of your competition, your loyalty program needs to be evolved into something that stands out.
Leveling-up your loyalty program
So you know you need to make some changes – but where to start? When choosing what to work on, it’s always worth seeing if research and data gives us any clues for potential improvements. Research tells us that 28.7% of shoppers want rewards to be more interesting, and 38% of shoppers say their biggest pain point is that making a purchase is the only way to earn loyalty points.
That’s a pretty big chunk of your program cohort – and this boils down to two main areas you can get creative in – how customers earn points, and how customers spend points.
We’ve already established that over a third of customers want to be able to earn points outside of making a purchase – but what could that look like?
Of course, you don’t want to make it too easy to earn points – but you could use your loyalty program as a way to support some of your other marketing KPIs, like growing your email database, or increasing social media engagement. Offering rewards for positive interactions with your brand not only helps you hit those goals, but enables your customers’ brains to associate those dopamine hits with your brand in multiple smaller ways, helping to grow brand affinity.
Customer actions you could reward include:
- Referring a friend to your site, through personalised referral codes
- Posting their purchases on social media, using your branded hashtag
- Entering competitions – you could even offer loyalty points as a prize
- Signing up to a newsletter subscription
- Taking out a monthly product subscription
- Sharing your blog posts or videos on their social networks
- Posting or being regularly active on a community message board
- Leaving a review for their purchase
- Attending a customer panel or market research session
You don’t have to adopt them all – not every brand or customer is the same – but it’s important to remember to balance value for your customer with value for you. Finding it difficult to build a base of reviews? Then focus on rewarding ratings and reviews! Maybe you know that customers referred from social media platforms are high converters – then perhaps rewarding user generated content would prove more fruitful for you.
Think setting this up is too much of a task? Think again. Software like LoyaltyLion and Yotpo help make integrating, measuring and rewarding loyalty actions easy, and are straightforward to implement on most eCommerce platforms. If you’re struggling to decide which system is just right for your brand, get in touch – we can help you decide.
Now you’ve decided how customers earn the points, it’s also key to develop an interesting way for them to spend them.
There’s no ‘right’ way to do this – and to illustrate the variety, we’ve looked at the loyalty programs of 6 different brands within the arts & crafts sector, where loyalty programs are very common.
Here’s a summary of what each brand offers:
- Crafter’s Companion – We talked a lot about the Crafter’s program in a previous blog post exploring loyalty, but to summarise: customers move up through tiers as they shop, with each tier offering better perks – including discounts and free or upgraded shipping, and even exclusive freebies at the top tier
- Craft Stash – Customers earn 1 point for every £1 they spend online, each of which is worth £0.01 and can be redeemed against future purchases in multiples of £0.20
- Hunkydory Crafts – All customers with an account are signed up automatically, giving them a 5% site-wide discount. They can also access free monthly kits and occasional member-only discounts
- Jackson’s Art – For every £1 spent on site, a customer receives 10 points. 1000 points are worth £1 to redeem against a future order, and if a customer purchases Jackson’s Art own-brand products, they receive double reward points on those items
- Hobbycraft – This brand doesn’t offer reward points – instead, they give you 15% off your purchase after you sign up, and a £5 voucher on your birthday. When you swipe your reward card at checkout or shop with your account online, they track the purchases you make and use that data to recommend new products, inspiration and exclusive offers they think you’ll enjoy
- The Works – Customers collect 5 points per every £1 spent, and every 3 months these are converted into vouchers to spend online or in-store at The Works
As you can see, there’s quite a range of structures here – so if you’ve got a loyalty program that’s working for you, there’s no need to start from scratch. Building upon what you already have, but injecting some more excitement here and there, is a much better option.
If your program has multiple levels or tiers – can you gamify those further? Are the rewards you’re offering at higher levels ‘worth it’ to the customer? Can you add additional goals, or improve them, to make them more tantalising for the customer – especially knowing how much more highly engaged customers spend? You could host customer panels with customers across a range of tiers to get their thoughts on your current program, and gather ideas of changes you could make.
What about a ‘spending points’-style program – what else could you add? Maybe it’s not about how your customers spend points, but rather what they spend them on. Perhaps program members would find it more rewarding to spend points on exclusive swag or merchandise they can’t get any other way? Maybe they’d like the option to gift their points to a friend, or trade them in for free delivery – for a single order, a month, or a year?
Or maybe donating their points to charity would appeal to them more?
For example, giving back to causes they care about is a big part of the TOMS brand in the US. They allow their customers to donate their loyalty points to charitable causes – a great way to foster an instant feel-good factor for their customers without sending freebies they might not need or want.
Whatever you choose, be decisive. It’s generally okay to add new features to a loyalty program, but be wary of removing features, especially if you make changes often – customers don’t like feeling they’re suddenly more limited in spending their hard-earned rewards. Much better to play the long game here, and stick with what you know will work.
Why should I invest in this?
It’s the million-pound question, isn’t it – all marketers, strategists and CEOs want to know they’re spending their time and money on the right things to succeed in business.
As we’ve mentioned throughout this post, loyalty programs are proven to work for your bottom line. They can also increase the number of positive reviews you receive, grow brand affinity, inspire your brand community and increase engagement with your marketing.
A great piece of advice we always share with our clients is, “If it’s working for you, keep it working for you.” Just because something works for you right now (your loyalty program, for example) that doesn’t mean it’ll continue to do so if you don’t make changes to it – even the best growth strategies and tactics need to be tweaked, refined and improved over time. It’s much lower-risk to invest in something you’re already seeing returns on than to suddenly dive into a completely new area – and often, it can cause more of an impact, too.
Need personalised support?
If you want to explore retention strategies that’ll work for your brand, our team can help. With over a decade of experience supporting eCommerce brands to take that next step in their growth, we can share detailed insight and support you to build a roadmap that’ll take you to your business goals (and beyond). Get in touch with us on +44(0)115 7940060 or email firstname.lastname@example.org to get started.