Growing Your Business Online With Loyalty Programs

This is the primary in a collection of articles we will probably be publishing relaying ideas and concepts from the Internet Retailer Conference in Chicago, which occurred June fifth by June seventh. Mark Goldstein, CEO of Loyalty Lab (an organization that implements loyalty packages for retailers), and Gary Korotzer, CMO of Red Envelope (an organization that makes a specialty of promoting present gadgets), delivered a presentation about loyalty packages. Red Envelope presently has a loyalty program managed by Loyal…

This is the primary in a collection of articles we will probably be publishing relaying ideas and concepts from the Internet Retailer Conference in Chicago, which occurred June fifth by June seventh. Mark Goldstein, CEO of Loyalty Lab (an organization that implements loyalty packages for retailers), and Gary Korotzer, CMO of Red Envelope (an organization that makes a specialty of promoting present gadgets), delivered a presentation about loyalty packages. Red Envelope presently has a loyalty program managed by Loyalty Lab.

Loyalty packages are taking off. If you may have a retail website and you do not have some sort of loyalty program…chances are high that by the tip of subsequent yr you’ll. Jupiter Research expects that by the tip of 2007, 78% of shops doing enterprise online can have a loyalty program, in comparison with 24% now. So what is the massive deal?

It prices much more to generate a brand new buyer than to promote to a repeat buyer. Loyalty packages permit you to construct a buyer base that’s loyal to your merchandise and can proceed to buy from you, slightly than your rivals. A loyalty program is a sort of program that permits your prospects to construct up a credit score to use for additional purchases, or to redeem for money. For instance, a retail website might grant a buyer “factors” for each buy he makes. When he has sufficient factors, he can redeem them for a reduction on extra merchandise, or probably redeem them for money.

To implement a loyalty program, you want some method to sustain together with your prospects’ accrued factors (or no matter sort of measurement you utilize). This ought to be finished by holding data of a buyer’s transactions in a database. Goldstein and Korotzer advisable tying the knowledge to a buyer’s bank card quantity. Every time a buyer makes purchases with a selected bank card, a file of the acquisition is recorded together with the bank card quantity. In this situation, if a buyer used a distinct card than in earlier purchases, her current loyalty account wouldn’t obtain further credit.

You ought to attempt to make it simple for a buyer to know what number of factors they’ve. Out of sight, out of thoughts, because the outdated saying goes, so be certain your prospects are conscious of what number of factors they’ve and what number of extra they should redeem their rewards.

When you start the method of deciding on the main points of your loyalty program (precisely what members will obtain, and the way a lot they must buy for redemption), Goldstein and Korotzer argue that it’s best to discover your organization’s economics as deeply as potential. Two vital statistics to look at are the lifetime worth and acquisition price of your prospects. This will higher enable you to decide how a lot you possibly can afford to offer to your prospects. Another vital consideration is strictly who will get to take part in this system. You could select to solely lengthen an invite into this system to the highest 20% (or no matter share generates the vast majority of your income) of your prospects. If there’s a phase of your buyer base that represents the vast majority of your revenue, then it is smart to pay attention to your advertising {dollars} on that group.

Another level that Goldstein and Korotzer emphasized is that your loyalty program ought to be cross-channel. In different phrases, should you function a bodily retail location and take orders by cellphone along with your website, the loyalty program ought to lengthen to all the channels. Avoid complicated your prospects. Make it simple for them to realize credit and money in on their loyalty no matter what channel they use to make purchases.

Loyalty packages have been around for years in sure industries (i.e., airline frequent flyer miles) however are simply beginning to acquire traction with plenty of retailers. If you promote retail, it’s best to start the method of researching the implementation of a loyalty program now – earlier than your competitors do. Feel free to contact Work Media for info on implementing a loyalty program to your website.

Keywords:
web, advertising, relationship, loyalty, program, retail, net, gross sales

 

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