A recent survey revealed that almost 80% of shoppers would prefer to collect reward and loyalty points through their mobile phone. This is a surprising given the slow uptake of systems such as Rewardle and The Cash Back App. This may be a result of users not being entirely satisfied with the systems available, or may point to a reluctance from merchants to hand their customer databases to another company.
What this data does show is that customers want to be loyal. They want to find a business that will give back to them and value their purchases and engagement. Regardless of whether your store is solely eCommerce, or if you are an omni-channel retailer and have a brick and mortar storefront, customer retention is vitally important. It helps develop a core that you can rely on for regular revenue, build an email marketing list to sell to, and apply more scientific reasoning to your marketing and inventory decisions.
How loyalty works at a basic level
There are innumerable ways to reward loyalty. The most common is the ubiquitous coffee punch card that is in virtually every café and every wallet or purse. This is a great form of advertising as when people open their wallet or purse, they see how close they are to a free coffee and make a mental note to return to that café for the next cup. Developing this relationship can be a powerful driver of sales, with relatively low cost to the merchant. A single cup of coffee is a small give away when compared to the opportunity to upsell, and the branding awareness of having a busy looking café.
Loyalty in the online arena
The same principle applies online, with time on site and visitor statistics powerful rankings factors. Building a loyal core of customers who return to your site time and time again to browse and buy will show search engines that your website is an authority in its industry. Using an enticing loyalty program is a good way of bringing people back and convincing them to make further purchases, spend time looking at your range, reading your blog, and generally hanging out on your site. The idea of an eCommerce website has shifted from a singular purpose, making a sale, to one of being a repository of knowledge, as well as the best place to purchase what you need. A loyalty program that attracts people to your site gives the impression of a strong user experience, something that search engines like Google, Bing, Duck Duck Go and more, rate very highly.
Types of loyalty systems
Online loyalty programs can take many forms. The most common and successful include:
A points system – Every purchase earns points and once a customer’s points balance reaches a certain threshold, it is converted to a dollar value and deducted from a transaction.
A paid tier system – The subscription model involves more perks based on the level of membership purchased. These can be things such as free shipping, ongoing discounts, special offers, and more.
Partner program – This involves joining forces with another business to create a symbiotic relationship. Each purchase with one company provides a discount or offer with the other. Airlines and car rental companies often strike up this type of partnership.