A Loyalty Program is More Than Just Points for Purchases

Many people have a very one dimensional view of a customer loyalty program.

In general, we tend to think of the basic programs that many retailers have been offering for the better part of 5 decades. These programs give you points for the purchases you make and let you redeem those points for discounts. But this type of program is old school – now, a loyalty program is so much more!

Ecommerce has completely changed the loyalty game. You now have easy access to all sorts of information, and can easily pass that information into other systems. This allows you to create some very powerful programs that integrate into your other marketing tools. A great example is passing your loyalty program information into your ESP, like our integration with dotmailer does!

Here are a few ways a loyalty program can help your online business grow:

1. Reward Referrals to Increase Sales

There is no marketing more effective than a referral from someone you know. Nielsen ranks a referral as the most trusted form of advertising. It is 30% more trusted than traditional online marketing tactics like SEM, social ads, and banner ads.

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This means that if you can encourage your existing customers to tell their friends about your business, these friends will be more likely to convert to a customer. The problem is that while many people are willing to refer your store, very few actually do. This is where a loyalty program comes in.

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With a loyalty program, you can reward your customers for sending out a referral. This makes them much more likely to complete this action for you. When rewarding points for referrals, be sure to reward both parties for added effectiveness.

2. Reward Social Sharing to Extend Your Reach

Social media is much easier to take advantage of as an online retailer, and even easier for ecommerce loyalty programs. There is a huge audience of potential eyes to reach on each social network.

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I realize your share or tweet will not reach everyone, but it is still powerful! The average American has 634 social connections. This means that every person you can convince to share has the ability to reach a fairly substantial audience.

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A shopper may not be inclined to share your store/products on their own, but with a bit of an incentive they will be. A few points for a Facebook share or tweet, and you will be in front of their entire network.

3. Reward Reviews to Help Conversion

Reviews help your conversion rate! They help your site’s SEO, establish social proof, and aid in shoppers’ decision making process. Basically, they are an all around game changer for your site’s conversion rate.

The problem is that it’s difficult to get shoppers to leave a review. It also does not help that someone is much more likely to leave a negative one than a positive one. You can encourage more positive reviews by giving shoppers a reason to leave one.

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The best thing about rewarding points for a referral is that you can mask the value of what you are giving. No one will be motivated to leave a review for half a cent, but they would be by 50 points. Points allow you to motivate when dollars or pounds would not.

4. Points Boost Your Repeat Purchase Rate

A program that only rewards points for purchases is not ineffective, just a bit basic. Basic is not bad. Even a very simple program can boost your key retention metrics, such as repeat purchase rate, purchase frequency, and customer lifetime value.

There is a reason a ton of the world’s best retailers rely on loyalty to engage customers and grow their business. Retailers like Starbucks and Sephora have not only grown with loyalty, but have also created a cult following around their programs.

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It is pretty amazing that customers are bragging about spending $1,000 in a year. There are definitely a few things to learn about commerce from Sephora’s loyalty program.

This Isn’t Your Mother’s Loyalty Program

Retailers are now able to set up loyalty programs that are more engaging and effective than ever before. Today’s loyalty programs are not simple punch cards or points for purchases. They are an amazing retention tool that allow you to both engage your customers and increase your store’s profitability. It is a win-win!

See how the SweetTooth for dotmailer extension can help you get greater traction with your customers.

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