All top companies agree that loyalty customers that repeatedly buy from your company are more profitable than customers who only buy once and walk away. For instance, a business such as incremental marketing learned that when loyal customers have a complaint, they can go to any length to retain them rather than let them go. More so, repeat customers have more impact on the growth and survival of the business, but their patronage is also of immense value to the business.
Therefore, a business thinks of returning customers concerning how much money the customers spend on the brand. On the other hand, one-time buyers may not have this lifetime value level, except the brand improves the product’s quality or service. Inarguably, when the products a customer gets are so high in quality, there is a good chance that the customer becomes loyal.
More so, loyal customers stick to a brand as long as it delivers what it promises and offers an excellent customer service relationship. Another critical reason popular brands should invest a great deal in customer loyalty programs is to beat the competition out there through smart ways of retaining customers. Consequently, this article analyses the essence of an ecommerce customer loyalty program, the components of the same, its types, and typical examples.
Why an e-Commerce Business need a Customer Loyalty Program
The most profiting reason why an e-commerce business needs a loyalty program is its alignment with the most crucial aspect– the customers. In other words, the best way to win the heart of every paying customer is to reward them for their patronage. These customers feel like part of the family, rather than just buyers, in terms of the partnership.
At the same time, retail businesses can show more concern for customers with a higher repeat purchase than one-time buyers. And depending on the type of loyalty program you implement, an e-commerce business can be very profitable. Also, the strategy can work hand-in-hand with data collection and promotion or ad retargeting. As a result, the business can profit from such deals and increased customer lifetime value, and eventually the overall company revenue.
How can the Customer Loyalty Program work for e-Commerce?
In a typical customer loyalty program, customers are usually willing to work with your brand conceptually through a sound experience, satisfaction, and the overall value that the business provides. The reward system for loyal customers motivates these customers to keep coming and entices new customers to be optimistic about your brand. Click here to read about Key Roles of a Buyers Agent in Perth’s Property Scene.
Some of the standard customer loyalty programs an ecommerce business can use include discounts, rebates, rewards, free merchandise, free shipping, coupons, and first access to unreleased products. Moreover, history has it that loyalty programs were first implemented in the 1950s as some grocers gave out stamps to customers who made purchases.
Types of Online Retailers using Customer Loyalty Programs
Statistics show that 78% of loyal customers will also readily put in the right word for a brand to their family members and friends. As a result, these customers will not only spend more money on the brand but also convince others to do the same. Already, word-of-mouth marketing is one of the most effective forms of marketing, and it becomes way more effective when targeted at friends and family members.
Furthermore, concerning the principles that govern customer loyalty programs, there are three categories of retailers that can gainfully implement these loyalty rewards systems.
- Online Retailers with Steady Stream of Orders
If you run an online e-commerce business with a steady stream of at least ten sales per month, you should consider a customer loyalty program for your regular buyers. These repeat orders are why the business is still standing, and the business owner should find a way to keep the loyal buyers.
However, if your business is not yet having such a consistent inflow of buyers, you should consider running an ad to secure new buyers. For instance, you may run an ad via Google or social media to increase awareness about your brand with special offers and baits to draw your site traffic. Also, Google Shopping provides the potential audience you can target.
- Online Retailers in price-sensitive niche
When a retail business deals in a niche where the customers are likely price-driven, it is vital to consider a relevant loyalty program. In this type of market, the customers are more likely to respond to a reward-based system such as free tickets, coupons, or special promos than in a luxury market where the price is not the most crucial factor. A loyalty reward program can also be successful in the fashion and beauty industry.
On the other hand, the multiple channels may also come with various selling propositions to portray various products. Therefore, based on an independent website, there might not be fair competition at all. But in comparison to e-stores such as Amazon and eBay, price competition is the way to promote profits. However, loyalty programs can still work for both types of business audiences.
- Online retailers in a highly competitive market
In a market with several competitors, a business may go the extra mile in retaining its loyal customers through a viable choice of the customer loyalty program. Perhaps, this category of retailers benefits the most from loyalty programs in those businesses in this category live with the risk of losing customers to their competitors.
Therefore, such a business does everything in its capacity to ensure that clients are satisfied and retained through a profitable reward system. When a business also implements loyalty programs well, they enjoy competition as they appear to be more customer-centric than the competitors. And do not forget that the primary reason for an e-commerce business’s loyalty programs is to retain loyal customers over time.
The e-commerce and retail business sectors create a unique environment in the business-to-consumer category. The sector deals directly with consumers and can relate to the consumer’s specific needs while essentially guiding the producer on what to produce. More so, some of the specific benefits of the customer loyalty programs include retaining existing customers, acquiring new customers, or moving the status of all categories of customers to the next level of the order.