Guest post by Skubana
You courted your lead until, charmed by your smooth marketing moves, they became a customer. Now what?
If you want to lock this relationship down long term, you need to give existing customers an irresistible reason to stick with you. A deliciously tempting ecommerce loyalty program could be the key to persuading them to stay.
However, building the ideal loyalty program takes a lot of work. To help you skip a couple steps and ride off into your loyal-ever-after, we studied some of the best programs out there and picked out seven tips that will help you create the perfect fit.
1. Treat your best customers like VIPs
When you buy from a brand over and over, you expect a little appreciation. After all, there are thousands of other affordable and convenient options out there, vying for your attention.
Sephora’s Beauty Insider loyalty program understands and acknowledges this. That’s why they offer members three distinct tiers with specific benefits.
Insiders get some great perks like a rewards bazaar, a private community, a birthday gift and the chance to earn points and spend them on exclusive rewards that drop every Tuesday and Thursday.
However, Sephora offers exclusive extras for customers that spend over $350 and over $1000 per year, throwing in fancy treats like free custom makeovers and monthly gifts.
This is a great way to show your best customers you appreciate them and encourage more people to shop with you. Because if you know you are only $50 from getting a free monthly gift, you might buy your shampoo from Sephora instead of the grocery store.
A lot of brands focus on new customer acquisition so heavily they forget who brings in the long-term cash. According to RJMetrics, the top 1% of customers are worth 18 times more than the average customer over their time with you. That’s why focusing on providing exclusivity to your best people is a smart move.
When designing your own loyalty program consider adding different tiers and offering exclusive discounts or treats to your top shoppers. They (and your business bank account) will thank you for it.
2. Embrace mobile (or risk getting left behind)
Did you know that the average American checks their phone 47 times a day? And that, according to Shopify, 57% of ecommerce transactions happened on a phone last year?
That’s why smart brands have embraced mobile completely, even for loyalty programs. Nike does a particularly good job of this with the Nike app.
The app is exclusively designed to help you make the most of your loyalty account. You start off by signing up and completing a quick, gorgeously designed questionnaire about your preferences, likes/dislikes and sizes.
Nike uses this information to create a customized in-app feed for you that shows you relevant info based on your interests – everything from new items to training moves to athlete interviews.
The app has a super clean, easy-to-use store so you can order your favorite pieces. It also holds your passes for exclusive events or skipping the line at the store.
By making their app a hub for every interaction you have with the brand, Nike makes it easy to stay engaged, browse products and buy.
Think about how your customers use their phones to interact with your brand and create something that helps make the experience easy, fun and profitable.
3. Expand the way people can earn rewards
You probably give buyers rewards based on how much they spend. But…newsflash…so does everyone else. Step out of the box and think about what other activities fit in with your brand.
The Walgreens balance reward program doesn’t just give you points when you buy snacks, medicine and toothpaste. They also reward customers for making healthy choices every day.
You can earn points for different activities like the number of miles you walk, run, or cycle, quitting smoking or even logging your sleep.
It’s a loyalty program that perfectly fits with the Walgreen brand and rewards customers for getting healthier.
What’s your brand about? What do you stand for? Incorporate what matters to you into your loyalty program. If being green is a big part of who you are as a brand, consider rewarding customers that bike to work or recycle.
Who we buy from reflects who we are, so think about how you can engage customers as they move through their day. This will help you stay top of mind.
4. Delight members with special offers
Your customers have probably signed up for dozens of loyalty programs. If you want them to stick with yours, you need to continuously engage them.
Starbucks does a really good job of this. They offer the traditional rewards – a number of stars (instead of points) per dollar spent – and a few nice in-store perks like paying through the Starbucks app, placing an order for pick-up, free refills and special events.
But it doesn’t stop there. Starbucks also runs exclusive, time-sensitive offers through the app where you can earn extra stars by completing a specific task like getting a coffee a certain amount of times in a week or trying their newest sandwich. This gamification encourages customers to keep going to Starbucks instead of the competition.
Think about how you can gamify your rewards system and experiment with special limited offers.
5. Create urgency
Do you give your customers a reason to use your loyalty program regularly?
Verizon does a fantastic job of creating urgency and using scarcity to encourage customers to earn and use their rewards.
The program is incredibly simple. For every $300 you spend on your bill, you win a reward. Rewards range from streaming subscriptions and movie tickets, to super tickets that get you to exclusive concerts and sporting events.
This is where the genius part comes in. You’ve only got 60 days to redeem your reward or you lose it. And those exclusive tickets? There’s a limited number so you need to log in regularly and pay attention.
The combination of scarcity, urgency and exclusivity creates excitement and encourages customers to come back. Think about how you can incorporate these factors in your own program.
6. Add more benefits as you grow
The average loyalty program stagnates, staying the same year after year. This does nothing to encourage customers to re-engage.
Amazon Prime does a fantastic job of growing and expanding as Amazon itself grows. At the beginning, the main benefit was free 2-day shipping. Now Prime gives you access to millions of exclusive products, same-day and 2-hour delivery in areas where the service is available and access to thousands of movies, music and books on demand.
By growing the loyalty program with the brand, Amazon keeps customers coming back for more.
When’s the last time you updated your program? Does it still reflect the best you can do for your customers?
7. No one likes black-out dates (or products!)
Want to retain people? Let them spend their reward points on what they want.
Nordstrom rewards is pretty similar to most other programs on the surface. For every dollar you spend, you get a point. They run special bonus days and send you a digital $20 Nordstrom note when you hit 2000 points.
This is where it gets good. Nordstrom lets you spend your note on anything in the brand family– including their restaurant, spa, and sales items. By giving customers the freedom to spend their rewards on what they want, Nordstrom wins their loyalty.
Do you limit what customers can spend rewards on? Experiment with removing the limitations and measure the results.
Loyal customers spend considerably more money with your business over time. Creating the right loyalty program directly translates into more sales for your business.
So use these tips from seven of the best out there currently to improve your own loyalty program and increase your customer retention rate.
About the Author
Skubana is an all-in-one ERP system that unifies omnichannel operations for online merchants after the checkout.