Flickr photo: Rachel Patterson
So, you’ve opened your first ecommerce store. It’s going OK, but not great.
And now you’ve run into a bit of a challenge. How can you make your customers return?
In this article, I’ll introduce you to ecommerce loyalty programs that you can start using straight away. These programs help you develop a stronger relationship with your customers, so they will want to come back for more.
The Basics of Ecommerce Loyalty Programs
Loyalty programs focus on three main objectives:
- Increase the chance of turning a second sale from a first-time buyer
- Nudge an existing customer into a higher paying bracket
- Gather feedback to improve business operations and marketing efforts
The toughest part of a loyalty program is finding a balance between new and already-loyal customers.
Loyal customers have shown their value and commitment which means giving these individuals a steep discount simply cuts at profits. After all, they were willing to pay for your offers, as is. Compare this to earning any amount from an individual that was on the fence about returning. The profit on the second sale may not be as high but it could lead to a loyal customer returning many years to come.
The Strategies of Ecommerce Loyalty Programs
You can use many different strategies to increase loyalty and engagement for your ecommerce store. These include:
- A point-based system which rewards users based on actions performed on the website.
- Gamification elements to make participation more fun and rewarding.
- Prizes, discounts, and freebies based on the number of points accumulated.
- Gift cards, travel miles, upgrades, and more.
Early incentive-based programs can be seen in examples like returning a proof of purchase to earn points toward items in the company catalog, stamp cards to earn freebies after reaching a purchase quota, or the classic addition of bubble gum to sports trading cards.
Today the landscape for loyalty programs has changed but many concepts remain the same.
Loyalty Programs in Action
You may not be aware of all the loyalty programs you’re involved with. That’s because these programs are such a natural part of your buying experience. Here are a few examples:
- Stores like CVS use loyalty cards with exclusive discounts and cash back for repeat business.
- Casinos in Vegas have player rewards cards that can earn entertainment and accommodation.
- Major credit cards, like Capital One, offer cash back, points, frequent flyer miles, and more.
- Amazon Prime offers free shipping, movies, and access to Kindle books.
- 1UP.com uses a point system to create ranks for members of the community.
Most loyalty programs are free to enroll and have just a few requirements whether it’s allowing an employee to scan a card, filling in a member number, or completing the purchase from an account.
Ecommerce stores have an advantage in which almost all elements of the loyalty program is all-inclusive and automated by the service. The ecommerce company will have access to multiple modules to experiment and implement with a variety of loyalty strategies.
The Marketing Benefits
The marketing potential behind all of this creates an amazing opportunity to encourage repeat business and advocacy of the brand.
The programs can provide marketing benefits such as these examples:
- Perfecting the timing between regular purchases to deliver a coupon or reminder just before the customer is aware of their need which is done by analyzing the purchase history and using that data to make a logical estimation.
- Educating the customers to give them a firm understanding of products and services which reduces the cost of customer service and gives them the control of information which can come to use when encouraging reviews and testimonials.
- Viral-based sharing due to deep discounts, prizes, and rewards which match the wants and needs of friends and family members of the customers.
Ecommerce loyalty programs create a layer of interactivity and engagement. They use free and paid rewards to retain customers to increase their lifetime value, and lowers the customer acquisition cost (on a large scale) by encouraging others to refer the business to members in their network.
Which Ecommerce Loyalty Program Should You Choose?
To lay claim to a “best” ecommerce loyalty program is a futile argument.
Most loyalty program services and tools offer the same type of features and benefits. Some may not have robust dashboards. Others may be written in a different programming language. But the main thing to keep in mind is whether it provides the features and benefits your business seeks and that it matches with the platform used on your website.
With that being said … there are plenty of options to choose from, including:
Some loyalty programs are hosted online whereas others may require a thorough understanding of installation on the server plus coding for the website.
A Simple Solution for Your Ecommerce Loyalty Program
For the purposes of this article, we’ll focus on PunchTab.
PunchTab is a stellar loyalty, rewards, and giveaway platform that is dead-simple to install and configure without having prior knowledge of programming. The service, as you will find with others, injects a website with interactive features for site visitors which rewards their actions and commitment to the brand.
The main loyalty module of PunchTab offers points to your community through the following:
- Sharing the website, page, or offer on social media
- Visiting daily
- Uploading pictures
- Checking in on Foursquare
- Watching videos
- About 30+ other actions
The prize catalog which comes with the service is provided by PunchTab but it can be customized. This is what drives individuals to stay active since there are valuable items available for their participation.
Other elements of the service include the ability to conduct viral-worthy giveaways which can have a variety of requirements per entry, and badges for loyal members of the community.
PunchTab provides a simple solution to those wishing to implement a loyalty program on their website or blog; you may start an account for free and upgrade based on the features you need.
A Checklist for Your Ecommerce Loyalty Program
The above example of PunchTab could integrate into an ecommerce website but it will take some tweaking and modification in order to fit the full spectrum of ecommerce.
Here’s the thing: most major ecommerce platforms (Magento, OScommerce, ZenCart, and others) have add-ons and modules for loyalty programs.
The add-ons and modules included in the major shopping carts or ecommerce SaaS solutions have been fine-tuned for their specific platforms; they have been developed by the team behind the platform or by the hands of freelance professionals. Additionally, these platforms are generally open to modification which would allow you to outsource work to implement a loyalty program that is specific to your business.
The main items to remember when exploring these options:
- The ability to create a customer account
- A point-based system that rewards frequent visits, shares, and other interactions
- Referral engine to attract additional customers through current customers
- Integration with other components of the ecommerce platform (e.g. email list)
- A system to monitor and measure feedback from loyalty program users
Over to You
A good ecommerce loyalty program provides you with all your required features and brings value to your customers. It should also provide users with ample reward for commitment. That way, the customers will be coming back for more.
What’s holding you back from implementing an ecommerce loyalty program? Share your thoughts and ideas in the comments!