Growing Your Business Online With Loyalty Programs
Below is a MRR and PLR article in category Business -> subcategory Marketing.
Growing Your Business Online with Loyalty Programs
Introduction
This article is the first in a series covering insights from the recent Internet Retailer Conference in Chicago, which took place from June 5th to June 7th. Mark Goldstein, CEO of Loyalty Lab, and Gary Korotzer, CMO of Red Envelope, shared their expertise on loyalty programs. Red Envelope leverages a loyalty program managed by Loyalty Lab to enhance customer retention.
The Rise of Loyalty Programs
Loyalty programs are becoming essential for online retailers. If your retail website doesn't have one yet, it likely will soon. Jupiter Research forecasts that by the end of 2007, 78% of online retailers will have a loyalty program, a significant jump from the current 24%. So, why are these programs gaining traction?
Benefits of Loyalty Programs
It's more cost-effective to retain existing customers than to acquire new ones. Loyalty programs help build a dedicated customer base that consistently chooses your products over competitors'. These programs typically allow customers to earn points with each purchase, which they can later redeem for discounts or cash.
Implementing a Loyalty Program
To run a successful loyalty program, you need a robust system to track customer points. Goldstein and Korotzer suggest linking this information to customers' credit card numbers. This ensures that every purchase is recorded accurately. However, keep in mind that using different cards could prevent credits from accumulating in the same account.
Keeping Customers Engaged
Make it easy for customers to track their points. Out of sight, out of mind. Keep them informed about their balance and what they need to earn rewards.
Strategic Planning
When designing your loyalty program, dive deep into your company's finances. Key metrics like customer lifetime value and acquisition costs will guide how much you can offer. Consider which customer segments to target. It might be beneficial to focus on the top 20% of customers who drive the most revenue.
Cross-Channel Consistency
Ensure your loyalty program spans all sales channels?"whether they shop online, in-store, or over the phone. Consistency prevents confusion and encourages broader participation.
Conclusion
Though loyalty programs have been around in industries like airlines (think frequent flyer miles), they’re now gaining momentum among retailers. If you’re in retail, start researching how to implement a loyalty program before your competitors do. For assistance, feel free to contact Work Media for guidance on setting up a program for your website.
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