8 Ecommerce Loyalty Program Ideas
Today’s online shopper is skilled at comparison shopping and is always only a click away from your competitor. And in today’s economy where more customers are looking to stretch the dollar, loyalty programs and incentives are more important than ever.
The following are 8 ways retailers can encourage customer loyalty:
Premium Shipping Clubs
For $79, Amazon Prime members enjoy free 2-day shipping and $3.99 next day shipping on most items. Once the annual fee is committed to, you can imagine the motivation to shop with Amazon as much as possible.
Club Cards
There are several models for club cards, such as:
- GNC Gold Card charges an annual fee of $20 for which members receive 20% off regular prices and 10% off sale.
- Moosejaw customers accumulate points which they can redeem for product.
- Esprit.com mails a $5 voucher for every $125 you spend online or in-store.
Email Only Promotions
Retailers like Eddie Bauer and Best Buy promise exclusive offers when you sign up to their email list.
Subscriptions
Retailers who sell consumables should consider asking customers to go steady and purchase product to be fulfilled at regular intervals rather than one lump package.
Other retailers’ business models are subscription-based. Netflix made it famous for video rentals, and we now have luxury handbag rentals from Avelle (formerly Bag Borrow or Steal) and Maghound for magazine subscriptions.
Service Extensions
Not too common in online retail, but an example could be if you buy a GPS system from a manufacturer and are offered new map downloads every year for $X.
Recycling Programs
MAC Cosmetics will give one free lipstick or eye shadow for every 6 empty containers (of most any product) to recycle the packaging. Good for the environment, and motivates customers to not only buy but consume products quickly to redeem for a new item.
Loyalty Affiliates
Loyalty affiliates offer shoppers incentives like cash back or reward points for shopping with businesses. For example, Upromise and MyPoints. This motivates shoppers to shop with partners, and benefits partners for access to these shoppers. The affiliate may offer a cash back rebate to the customer less than the affiliate commission it earns from the merchant, creating a win-win-win situation.
These programs are not without controversy, particularly programs that include toolbars like the OneCause program, which will donate a percentage of a sale to charity. If a shopper has the toolbar installed, this toolbar software can overwrite tracking cookies and improperly attribute the sale to OneCause when it was really your own or another affiliate’s marketing efforts that drove the sale.
If you want to see the toolbar’s tricks in action, check out this video.
It’s possible that you will pay a 10% (or whatever the agreement is) commission to these toolbar programs when you could have kept that margin or properly rewarded an affiliate. This is why many affiliates will not join your affiliate program if you participate with these loyalty affiliate programs – they don’t want their hard work and even PPC investment to get siphoned by a toolbar.
This is not the best way to build loyalty, but if a customer really believes in the value of the charity program, they might remember your site and come directly to you next time for a repeat purchase (yes, you will pay out an affiliate commission every time).
Gift Reminder Service
If you can offer a gift reminder and suggestion service (that’s actually relevant and helpful), you can really clean up. Think of a flower shop that asks a busy guy to enter his wife’s birthday, his boss’ anniversary, his own anniversary (very important), his kids’ birthdays, mother in law etc. and provides a mobile application to boot. Busy guy can be reminded to order flowers and candy while stuck in traffic, make a payment with his mobile and always be the hero. You get a lifetime customer.
Value Propositions
Not loyalty programs per se, but strong value propositions increase the likelihood a customer will buy from you again. These may be customer service policies like Zappos’ 365 Day Return Guarantee and Free Shipping Both Ways or site features like MyShape’s personalization system that recommends the most flattering styles based on your exact body measurements and reduces risk of buying online (more trust, satisfaction and fewer returns).
Left: Igigi.com using MyShape system
These are just a few examples, if you have other examples please leave a comment.
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One of our most successful components of our customer loyalty program has been our High Altitude Rewards Program. It’s basically a tiered customer status assigned by the number of points you acquire in a year.
Customers can earn up to double the points for each purchase depending on status.
It’s great to be able to give your most loyal customers a little extra without trying to be all swanky like the airlines with special lines and membership cards.
Gary@moosejaw.com
@moosejawservice
These are great ideas to reward current customers. Customer retention should be of utmost importance as they are becoming more savvy and are likely to try out your competitors at any given moment. Valuing them is ultimately valuing your business as a whole.
@Gary
I’m familiar with your High Altitude Rewards http://www.getelastic.com/moosejaw-loyalty-program/
didn’t make the connection that they were air-miles :)
Excellent suggestions! A lot of fresh approaches that really tap into customer concerns, like the recycling and premium shipping
I’ve got another nice idea! How about a review system, at which subscribed users that previously bought some items can review those bought items, and you reward them for that with a credit system of some sort that allows for discounts at newly bought items afterwards.
This way, customer loyalty is enhanced at little or no cost.
Gary,
Sometimes isn’t great though to get that “swanky” treatment from the airlines? Have the VIP card that not many others do makes the customer more connected. It makes you feel special and above the average consumer thereby presumably increasing brand loyalty? Just a thought.
These are great ideas to keep and encourage new customers to continue to do business. My favorite example is when businesses motivate customers to recycle their products. As a consumer, I appreciate their concern for the environment and I in turn am excited to continue to purchase their product.
@carrie, unfortunately this is more difficult to do online as someone has to pay for shipping – and it doesn’t work for all product categories.
I like the idea Day-two-Webdesign had to give incentives to customers that review items. I know as a customer I read the reviews (especially with clothes) to make my decision if I want to purchase an item or not. I would be nice to have more sights with feedback readily available.