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This is the 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 business that implements loyalty programs for merchants), and Gary Korotzer, CMO of Red Envelope (a organization that specializes in promoting gift items), delivered a presentation about loyalty programs. Red Envelope at the moment has a loyalty system managed by Loyalty Lab.

Loyalty programs are taking off. If you have a retail web website and you do not have some sort of loyalty system...chances are that by the end of subsequent year you will. Jupiter Investigation expects that by the finish of 2007, 78% of retailers performing company on the web will have a loyalty plan, compared to 24% now. So what is the large deal?

It expenses a lot more to create a new customer than to sell to a repeat consumer. Loyalty applications let you to build a client base that is loyal to your items, and will continue to purchase from you, rather than your competitors. A loyalty plan is some type of system that allows your consumers to develop up credit to apply to further purchases, or to redeem for cash. For example, a retail net website could grant a buyer "points" for each obtain he makes. When he has enough points, he can redeem them for a discount on much more merchandise, or possibly redeem them for money.

To implement a loyalty program, you require some way to keep up with your customers' accrued points (or whatever kind of measurement you use). This ought to be done by maintaining records of a customers' transactions in a database. Goldstein and Korotzer suggested tying the info to a customer's credit card quantity. Each and every time a consumer tends to make purchases with a particular credit card, a record of the purchase is recorded along with the credit card number. In this scenario, if a consumer utilised a distinct card than in earlier purchases, her present loyalty account would not get additional credits.

You ought to try to make it easy for a consumer to know how many points they have. Out of sight, out of thoughts, as the old saying goes, so make certain your clients are aware of how numerous points they have and how several more they need to redeem their rewards.

When you start the process of deciding on the facts of your loyalty program (exactly what participants will get, and how a lot they have to obtain for redemption), Goldstein and Korotzer argue that you really should explore your company's economics as deeply as possible. Two crucial statistics to examine are the lifetime value and acquisition cost of your consumers. This will much better aid you determine how much you can afford to give to your consumers. One more vital consideration is exactly who gets to participate in the system. You could select to only extend an invitation into the system to the leading 20% (or whatever percentage generates the majority of your revenue) of your buyers. If there is a segment of your consumer base that represents the majority of your revenue, then it makes sense to concentrate your advertising dollars on that group.

One more point that Goldstein and Korotzer emphasized is that your loyalty plan should be cross-channel. In other words, if you operate a physical retail place and take orders by phone in addition to your net website, the loyalty plan must extend to all of the channels. Avoid confusing your buyers. Make it straightforward for them to gain credits and cash in on their loyalty regardless of what channel they use to make purchases.

Loyalty applications have been around for years in specific industries (i.e., airline frequent flyer miles) but are just starting to acquire traction with a lot of retailers. If you sell retail, you ought to begin the approach of researching the implementation of a loyalty program now - ahead of your competitors does. Really feel free to contact Function Media for data on implementing a loyalty system for your net web site. marketing for small business rent advertising for business get restaurant loyalty programs