{"id":19895,"date":"2020-07-20T08:48:21","date_gmt":"2020-07-20T13:48:21","guid":{"rendered":"https:\/\/www.hostgator.com\/blog\/?p=19895"},"modified":"2020-10-14T10:40:37","modified_gmt":"2020-10-14T15:40:37","slug":"ecommerce-loyalty-programs-online-store","status":"publish","type":"post","link":"https:\/\/www.hostgator.com\/blog\/ecommerce-loyalty-programs-online-store\/","title":{"rendered":"What’s the Best eCommerce Loyalty Program for Your Online Store?"},"content":{"rendered":"\n

eCommerce is an easy way for small businesses to reach more customers, as long as you don\u2019t lose them to big players like Amazon and Walmart. Amazon alone took in 44% of the eCommerce sales<\/a> in the US in 2017.<\/p>\n\n\n\n

To compete with major retailers\u2019 selection and price, you probably already know that your online business needs to stand out by offering unique items, expertise in product selection, and excellent service.<\/p>\n\n\n\n

Another way to appeal to new customers and keep current ones coming back is with an eCommerce loyalty program.  <\/p>\n\n\n\n

What Can an eCommerce Loyalty Program Do for Your Online Store?<\/h2>\n\n\n\n

We often think of loyalty programs as tools to get customers to come back, but that\u2019s not all a loyalty plan can do. Here are five more benefits to eCommerce loyalty programs.<\/p>\n\n\n\n

1. Get new customers on board.<\/h3>\n\n\n\n

Don\u2019t make your customers wait until they\u2019ve spent a certain dollar amount or placed several orders to start getting the benefits of loyalty program membership. <\/p>\n\n\n\n

Offer your customers an immediate discount or bonus item for joining your loyalty program and they\u2019re more likely to sign on and make a purchase.<\/p>\n\n\n\n

2. Collect marketing data.<\/h3>\n\n\n\n

A good loyalty program will provide analytics on your members so you can see which products they prefer, when they buy, how much they spend, and other information you can use to refine your marketing efforts. Smarter offers can lead to more sales and higher order values.<\/p>\n\n\n\n

3. Increase the lifetime value of your current customers.<\/h3>\n\n\n\n

With your customer loyalty program marketing data and targeted offers, your business should be able to not only retain customers but earn more from them. Exclusive product offers, previews, and upsells of related items are easier when you have accurate information and your customers\u2019 trust.<\/p>\n\n\n\n

That trust is valuable-Invesp found that established customers are 50% more likely to buy a new product<\/a> from a business than new customers are, and those existing customers spend about 30% more when they buy.<\/p>\n\n\n\n

\"ecommerce<\/figure>\n\n\n\n

4. Keep your customer acquisition costs in check.<\/h3>\n\n\n\n

By using your digital loyalty program to target offers to your existing customers, you can boost revenue from those shoppers and reduce the amount you need to spend on new-customer acquisition to keep your revenue stream flowing. <\/p>\n\n\n\n

And when you do look for new customers, your customer loyalty program data can help you identify target audiences similar to your most loyal and lucrative customers.<\/p>\n\n\n\n

5. Win back customers.<\/h3>\n\n\n\n

Sometimes an existing customer just stops shopping with you, and you don\u2019t know why. Rather than write off that customer, you can use your eCommerce rewards program to craft a custom email offer<\/a> to bring them back to your store.<\/p>\n\n\n\n

Think about which of these goals is most important to your business. Then take stock of the channels that you use most often to reach current customers and new customers. Depending on your goals and customer habits, you may be able to do well with a straightforward points-for-purchase loyalty program, or you may need a program that includes social media reward options, tiered reward levels and other advanced features.<\/p>\n\n\n\n

What Should Your Store\u2019s eCommerce Loyalty Program Look Like?<\/h2>\n\n\n\n

OK, so you\u2019re sold on the benefits a loyalty program can offer your business. Here are some things to consider as you plan your program:<\/p>\n\n\n\n

Will customers earn points only for purchases, or also for activities like social sharing, writing reviews and uploading photos and videos?<\/strong><\/p>\n\n\n\n

Many eCommerce consultants recommend offering rewards points for activities that build your customer base, in addition to giving points for purchases. You might want to reward customers for specific actions like sharing one of your new handbags on Instagram or writing a review for one of your more expensive laptops. <\/p>\n\n\n\n

Another option is to offer rewards for referrals. If you\u2019ve ever shared a store\u2019s discount code with friends because you\u2019d get a discount if they make a purchase, you know how compelling customer referral programs can be. <\/p>\n\n\n\n

How many points will your customers earn for each activity or dollar spent?<\/strong><\/p>\n\n\n\n

The key to assigning points to actions in your store is balance. You don\u2019t want to give out so many points that you\u2019re losing money on your rewards program. But you don\u2019t want customers to feel like the rewards are too small to be worth pursuing. <\/p>\n\n\n\n

It\u2019s wise to start small, with a simple equation like 'spend $10, earn 1 point'\u009d-or whatever ratio makes sense for your average ticket order. Then track your sales and points metrics and make adjustments from there.<\/p>\n\n\n\n

What can points be redeemed for?<\/strong> <\/p>\n\n\n\n

For example, can customers use their points at any time to get discounts on purchases? Can they use points for free shipping, express shipping or special gifts? Decide ahead of time, make the options clear to loyalty program members and listen for feedback to decide if you need to add or change your redemption options.<\/p>\n\n\n\n

Will the points ever expire?<\/strong> <\/p>\n\n\n\n

Or can your customers hold on to them indefinitely until they\u2019re ready to use them? <\/p>\n\n\n\n

On one hand, points that never expire create an easier customer experience. On the other hand, an ever-growing cache of points could create a cash flow problem if several people decide to redeem a lot of points around the same time. You\u2019ll need to decide what your limits are for keeping unused points on the books.<\/p>\n\n\n\n

What will be in your fine print?<\/strong><\/p>\n\n\n\n

Most of your customers will be happy to rack up points as they go about their normal shopping and sharing business, but there may be some who want to game your system in a way that causes you losses. <\/p>\n\n\n\n

For example, consider the infamous case of the Healthy Choice airline mile promotion<\/a>, which offered people 500 air miles for every 10 product bar codes they mailed in. (It was 1999, after all.) The promotion focused on the brand\u2019s frozen meals, but a clever civil engineer read the fine print on the offer and saw that there was no stipulation about what products counted. <\/p>\n\n\n\n

So, he went on a Healthy Choice discounted pudding cup buying spree, told the grocers he cleaned out that was stocking up for Y2K <\/strong>to avoid suspicion (!) and earned more than 1.2 million air miles for buying about $3,000 worth of pudding. It\u2019s an amazing story, but not what Healthy Choice had in mind when they launched their promo. <\/p>\n\n\n\n

The moral: set limits to close loopholes in your rewards offers. <\/p>\n\n\n\n

How will you protect your loyalty program from fraud?<\/strong><\/p>\n\n\n\n

Sadly, rewards program fraud is a thing. You need to protect your customers and your revenue stream by preventing it. <\/p>\n\n\n\n

Rewards account takeover fraud happens when outsiders hijack your customers\u2019 loyalty accounts and use their points to go shopping. Stolen credentials, data breaches and easy to guess passwords all raise the risk of account takeovers. To reduce the risk and protect your customers:<\/p>\n\n\n\n