Growing Your Organization Online With Loyalty Programs

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This is the 1st in a series of articles we will be publishing relaying thoughts and suggestions from the Net Retailer Conference in Chicago, which occurred June 5th by means of June 7th. Mark Goldstein, CEO of Loyalty Lab (a business that implements loyalty applications for merchants), and Gary Korotzer, CMO of Red Envelope (a firm that specializes in selling gift items), delivered a presentation about loyalty programs. Red Envelope at present has a loyalty program managed by Loyalty Lab.

Loyalty applications are taking off. If you have a retail net site and you do not have some kind of loyalty system...chances are that by the finish of next year you will. Jupiter Investigation expects that by the end of 2007, 78% of retailers carrying out business on-line will have a loyalty plan, compared to 24% now. So what is the huge deal?

It costs a lot far more to create a new customer than to sell to a repeat buyer. Loyalty programs permit you to create a consumer base that is loyal to your goods, and will continue to acquire from you, rather than your competitors. A loyalty system is some type of system that enables your customers to develop up credit to apply to further purchases, or to redeem for money. For instance, a retail net internet site could grant a customer "points" for every obtain he makes. When he has enough points, he can redeem them for a discount on far more merchandise, or possibly redeem them for cash.

To implement a loyalty program, you want some way to preserve up with your customers' accrued points (or whatever sort of measurement you use). This really should be accomplished by keeping records of a customers' transactions in a database. Goldstein and Korotzer encouraged tying the details to a customer's credit card number. Each time a customer makes purchases with a distinct credit card, a record of the purchase is recorded along with the credit card quantity. In this scenario, if a consumer utilised a different card than in prior purchases, her current loyalty account would not receive added credits.

You ought to attempt to make it easy for a client to know how many points they have. Out of sight, out more information of mind, as the old saying goes, so make confident your consumers are conscious of how many points they have and how many far more they open in a new browser window need to redeem their rewards.

When you begin the approach of deciding on the specifics of your loyalty plan (exactly what participants will get, and how much they have to acquire for redemption), Goldstein and Korotzer argue that you really worth reading should explore your company's economics as deeply as attainable. Two critical statistics to examine are the lifetime worth and acquisition price of your buyers. This will greater support you figure out how considerably you can afford to give to your buyers. Yet another vital consideration is precisely who gets to participate in the program. You may decide on to only extend an invitation into the program to the best 20% (or whatever percentage generates the majority of your income) of your customers. If there is a segment of your buyer base that represents the majority of your earnings, then it makes sense to concentrate your advertising and marketing dollars on that group.

Yet another point that Goldstein and Korotzer emphasized is that your loyalty program ought to be cross-channel. In other words, if you operate a physical retail location and take orders by phone in addition to your net site, the loyalty system ought to extend to all of the channels. Avoid confusing your consumers. Make it effortless for them to acquire credits and money 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 obtain traction with a lot of retailers. If you sell retail, you ought to start the method of researching the implementation of a loyalty system now - prior to your competitors does. Really feel free to contact Work Media for details on implementing a loyalty program for your internet site.