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.
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.
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.
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.
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 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.
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.