Expanding Your Company Online With Loyalty Programs
This is the very first in a series of articles we will be publishing relaying thoughts and ideas from the Internet Retailer Conference in Chicago, which occurred June 5th via June 7th. Mark Goldstein, CEO of Loyalty Lab (a organization that implements loyalty programs for merchants), and Gary Korotzer, CMO of Red Envelope (a company that specializes in selling gift products), delivered a presentation about loyalty programs. Red Envelope presently has a loyalty plan managed by Loyalty Lab.
Loyalty programs are taking off. If you have a retail net internet site and you do not have some sort of loyalty program…probabilities are that by the finish of subsequent year you will. Jupiter Study expects that by the finish of 2007, 78% of retailers carrying out organization on the web will have a loyalty system, compared to 24% now. So what is the large deal?
It fees a lot much more to generate a new buyer than to sell to a repeat buyer. Loyalty programs let you to create a customer base that is loyal to your goods, and will continue to acquire from you, rather than your competitors. A loyalty program is some sort of plan that allows your clients to develop up credit to apply to additional purchases, or to redeem for money. For instance, a retail net internet site could grant a consumer “points” for every single acquire he tends to make. When he has enough points, he can redeem them for a discount on more merchandise, or possibly redeem them for money.
To implement a loyalty program, you require some way to maintain up with your customers’ accrued points (or whatever kind of measurement you use). This ought to be accomplished by keeping records of a customers’ transactions in a database. Goldstein and Korotzer advised tying the info to a customer’s credit card number. Every single time a buyer makes purchases with a specific credit card, a record of the purchase is recorded along with the credit card number. In this situation, if a client utilized a different card than in prior purchases, her existing loyalty account would not receive extra credits.
You must attempt to make it easy for a client to know how a lot of points they have. Out of sight, out of thoughts, as the old saying goes, so make sure your clients are aware of how many points they have and how several far more they need to have to redeem their rewards.
When you begin the process of deciding on the details of your loyalty plan (exactly what participants will receive, and how a lot they have to buy for redemption), Goldstein and Korotzer argue that you should explore your company’s economics as deeply as attainable. Two critical statistics to examine are the lifetime value and acquisition price of your buyers. This will much better aid you figure out how significantly you can afford to give to your customers. Yet another critical consideration is exactly who gets to participate in the program. You could choose to only extend an invitation into the plan to the leading 20% (or whatever percentage generates the majority of your income) of your consumers. If there is a segment of your client base that represents the majority of your earnings, then it makes sense to concentrate your advertising dollars on that group.
Yet another point that Goldstein and Korotzer emphasized is that your loyalty plan must be cross-channel. In other words, if you operate a physical retail location and take orders by phone in addition to your net web site, the loyalty plan ought to extend to all of the channels. Keep away from confusing your customers. Make it effortless for them to acquire credits and cash in on their loyalty regardless of what channel they use to make purchases.
Loyalty programs have been around for years in particular industries (i.e., airline frequent flyer miles) but are just starting to gain traction with a lot of retailers. If you sell retail, you ought to start the process of researching the implementation of a loyalty program now – just before your competition does. Feel free to make contact with Work Media for details on implementing a loyalty system for your internet site.
To know more, please go to: loyal rewards
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