Covid-19 has driven a surge in online retail shopping, as will be seen clearly over the coming week’s Black Friday and Cyber Monday sales. The latest report from the Australian Bureau of Statistics found: “In through-the-year terms, the seasonally adjusted series [total sales] rose 74.5% in September 2020 compared to September 2019.” Total online sales in Australia are now worth over $3b per month.
With that revenue growth, it is even more important to hold on to your existing and new customers. Competing solely on price is just a race to the bottom that ultimately, everyone loses. Your customer retention strategy must be about more than that, or as soon as a competitor offers a lower price, you’ll lose your customers.
As discussed here last month, the object of customer retention is increasing Customer Lifetime Value (CLV). It can be achieved by focusing on customer satisfaction, investing in “good” customers, upselling and cross-selling, and as we are going to discuss in this post: implementing loyalty programs.
Loyalty programs have come a long way from getting a free coffee when you collected your tenth stamp on your loyalty card. These programs effectively expired as you took a sip of your free coffee, and didn’t necessarily generate loyalty beyond that.
The best programs focus on connecting with your customers, giving them something exclusive to members, as opposed to just transactional incentives – though these are part of the total package. Programs can start simple or be gamified, providing tiers and achievement levels, each with an increased level of reward and exclusivity. Earning awards points doesn’t just have to be about purchases either. You can incentivise your customers to share social media content, write reviews, and complete questionnaires.
Loyalty programs don’t only aid in increasing CLV, but also increase customer interaction, and create more accurate customer profiles through improved data collection, enabling you to better target products, pricing and marketing.
Loyalty programs can take many forms. In exchange for signing up, among many things you can offer your customers are:
- Birthday rewards
- Early product access
- Referral bonuses
- Bonuses for special activities
- Exclusive content
- Dedicated support
- Limited-time discounts
Key points to remember are: to look after both new and existing customers, with enticements for the former and rewards for the latter; offer exclusive and unique rewards that customers can’t get without being part of the program; focus on value rather than price; and make the interaction is part of an overall satisfying customer experience.
Hubspot listed the following as its eCommerce Loyalty Program Best Practices:
- Organise your loyalty program using tiers
- Provide different channels to earn rewards
- Offer enticing rewards in your shop
- Integrate gamification throughout your loyalty programs
- Gather and distribute customer data
Having a strategy for customer retention is crucial. To discuss how you can implement a loyalty program for your business, click on the button below to set up an obligation-free appointment with one of The Playhouse Group’s experts. We are happy to discuss this or any other eCommerce related questions you may have.
With decades of experience and as a certified Magento partner, The Playhouse Group can help your business maximise its online sales capabilities. Get in touch with our team and we can talk to you about this or any other eCommerce questions you may have.