CUSTOMER EXPERIENCE
Retention
Encourage repeat long-term customers with a loyalty program
A well-crafted loyalty program bolsters retention. It enables companies to capitalize on existing business for revenue, reducing reliance on costly customer acquisition. It came as little surprise, then, that loyalty programs were common among the largest ecommerce brands. We found some telling patterns in retailers of different types. For example, ecommerce retailers that came from a brick-and-mortar background were more likely to use loyalty card-based programs common in physical stores, demonstrating how companies draw on their industry's techniques when moving into online ecommerce. We also found brands using points-based programs, especially in the fashion space.
Larger brands may understand the value of loyalty programs, but overall, we still saw opportunities to take advantage of these programs in re-engagement.
Larger brands may understand the value of loyalty programs but overall, we still saw opportunities to take advantage of these programs in re-engagement. Online sellers tend to focus on re-engagement opportunities triggered by customer behavior, like abandoned cart triggers or reminders that a promotion is about to expire. These methods are useful because they link activity to context, but they are also short-term tactics. Using loyalty programs in re-engagement fosters longer-term sales opportunities. Loyal customers will often spend more than new ones because they know your brand and feel part of its community, paving the way for highly profitable segmentation campaigns. Linking loyalty segmentations to promotions offers a powerful sales proposition that brands can initiate whenever they choose. Our research found companies commonly using promotions to re-engage customers.
EXPERT COMMENTARY:
Sophisticated brands use their loyalty programs to grow their insider communities. This starts by rewarding customers for referring others to the brand and for creating social proof, like reviews and social posts. Your insider community members are your biggest advocates, so reward them for acquiring new customers on your behalf. Shoppers acquired this way also convert quicker because they trust your brand from the outset.
The Body Shop used this email to attract its loyalty club members with a free gift promotion. This gave them the chance to boost member morale and hopefully generate some sales, while also enticing non-members with an invitation to join.
Target cross-promoted its RedCard credit card, which offers discounts for users, in the welcome email for its Circle loyalty program.
