E-commerce

Understand the importance of loyalty programs for e-commerce

7 June, 2018 |

In this article, we are going to explain the importance of loyalty programs for e-commerce and how to invest in this strategy. Follow us!

Winning the customer’s heart may be as difficult a task as conquering the loved one. In both cases, it is necessary to take the opportunities to highlight our strengths and make sure the object of desire can’t take their eyes off you (here, the competition).

Kidding aside, investing in loyalty is a way to increase the visibility of your brand, reduce the costs of attracting new sales, increase the average ticket value, among other advantages. In this article, we are going to explain the importance of loyalty programs for e-commerce and how to invest in this strategy. Follow us!

How does a loyalty program work?

Let us quickly remember the concept of a loyalty program. This strategy consists of encouraging the consumer to buy again, several times in exchange for a benefit. Loyalty programs are used by various business segments, from airlines to food businesses.

When we talk about e-commerce, this strategy basically works in three different ways.

The most widely used is earning points, also known as loyalty, which is when the customer earns points and can exchange them for rewards.

There is also the progressive discount, which encourages the consumer to buy more of a given product through discounts that increase according to the number of items. You can also choose a third option, which consists of offering discounts according to the number of points. These are the most widely used formats, but each online shop may use creativity according to the customer profile.

What are the advantages?

The increase of average ticket

A customer who feels valued by the company tends to spend more since they have more confidence in the brand and feel safer. Moreover, it is possible to create the loyalty program aimed at increasing the average ticket.

An interesting option is to stimulate a minimum amount of participation. For example: if the customer wants to make a purchase in the amount of € 50 and sees that if they spend € 70 they can get a discount or another kind of benefit, they may consider it advantageous to spend a little bit more to reach the amount required.

For this strategy to work, the consumer must understand quickly that they can obtain a good deal in your e-commerce. To facilitate the understanding, invest in explanatory content, which shows the need to take advantage of this unique opportunity.

Reducing costs to win new customers

Every day you think about how to attract new customers without deviating from your cost planning, right? The good news is that you are not the only one. Some more good news (yes) is that a loyalty program can minimize the problem. Keeping a loyal customer base is a way to reduce costs, after all, the higher the revenue coming from this group, the less need for big investments in disclosure.

Increase of engagement

By investing in loyalty programs, the main expected result is that customers remain loyal to your company. This condition has other advantages, such as the improvement of the relationship with the brand, the increase of trust and more engagement on social media. Moreover, customers can recommend your online shop to other people, a very important disclosure for business growth.

Stand out from the competition

Standing out from the competition is an increasingly difficult task for shopkeepers. While buying options are increasing, consumers are becoming more and more demanding. More than low price and product quality, they look for brands that know how to communicate with their target audience and value the relationship.

A loyalty program is a good option at that moment because, in addition to making the brand stand out from the competition, it brings the customer closer to the company and offers financial benefits for both parties.

Easy implementation

Though it seems like a strategy that consumes a lot of time and investment, putting it into practice is easier than you think. If you have a good e-commerce platform, it is possible to include a module to manage all the information without having to change the structure of the site.

You can also rely on the help of loyalty platforms that offer all the necessary features for this type of strategy. Ideally, you should work with easy-to-integrate digital marketing tools that can unify data and facilitate consumer interaction.

How to invest in this strategy?

The first step is to analyse the customer profile and their consumer behaviour. According to the information collected, it is time to identify the kind of incentives that can stimulate your customer: rewards or discounts? Generally speaking, the e-commerce consumer is usually attracted to the second option. Therefore, using the points system that corresponds to discounts becomes a good choice.

It is obvious that this preference can be determined by several factors, such as the action segment, age range, and product value, among others. If you choose to offer gifts, check if the rewards should be items in the shop or if you have to establish some kind of partnership with other companies.

The degree of difficulty to win the reward must be carefully defined. Setting very difficult goals may discourage the consumer to remain loyal to the brand and, worst of all, it may give a negative image of your company.

To avoid that situation, review your company goals very well and create a win-win strategy. Finally, all you have to do is create the regulation, be available in the contact channels to clarify the main doubts and to encourage customer participation through disclosure.

Competition is sneaking a peek at an opportunity to win your customer and not to lose them, so it is important to conquer their heart. Offering benefits in the form of discounts or rewards is a way of showing the importance of that relationship and ensuring excellent results.

Would you like to know more about how to implement this strategy in your online shop? Contact us and clarify all your doubts!

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