Some products are usually a one-time purchase, especially big ticket items in categories like electronics and appliances.
So if you're in the ecommerce space, and focusing on products of that nature, most of your resources are probably directed toward new customer acquisition.
(How often do you buy a refrigerator or a top tier gaming PC?)
But there are other items and categories where people buy more than once — maybe even regularly.
This is especially true for things that could be considered “consumables,” like health supplements, beauty products, or food items.
But it can also be true with things like apparel and small electronics.
Investing your time, money, and energy in customer retention, rather than acquisition, can substantially improve your overall ROI.
One way of doing this is to start a customer loyalty program.
This helps encourage your previous customers to keep coming back to you when they restock on something or replace a short-lived item, rather than trying out one of your competitors instead.
A recent blog post from A Better Lemonade Stand makes an excellent case for customer loyalty programs for small ecommerce vendors.
We’ve all seen them before, and some of us have a special place in our wallet for them. If you haven’t guessed already, I’m talking about “Buy X Get 1 Free” loyalty cards.
The idea here is simple: reward your customers for frequent purchases.
Loyalty points are likely the most common form of loyalty program out there. They’re easy to implement and pretty darn effective.
Granted, one free coffee might not be a good enough reason to buy 10, but it is a good enough reason to stick with one coffee shop on your way to work each morning.
The same goes for your ecommerce store.
Implementing a loyalty program might not have customers throwing their wallets at you, but combined with a competitive product and great customer service, it can definitely increase sales and improve customer retention.
In most cases, your loyalty program should reward your customers based on the frequency and/or monetary value of their purchases.
“Buy X Get One Free” might work well for coffee shops, but depending on your business, you might want to consider a different reward.
Anything your customers can use towards a purchase is typically a good idea for a reward.
Store credit and free shipping are two good examples. These types of rewards work well because they encourage future purchases and lead customers back to your shop.
When considering a loyalty program, keep this essential question in mind: Does the reward encourage continued purchases?
Firstly, they add a gamification element (more on this later) to your loyalty program, and secondly, they allow you to get creative with how your customers can earn/redeem their points.
If loyalty points are something you are currently using, or are considering using, here are a few creative ideas that work well – especially if you offer points that can be redeemed toward a purchase.
WELCOME & WOW
New customers might not fall into the loyalty category—not yet, anyway. However, offering some surprise loyalty points with every first purchase can be a good strategy.
This is a nice gesture that gives you the opportunity to introduce new customers to your loyalty program, and let them know what it’s all about.
Secondly, if you offer points that can be used towards a purchase, you will get the added benefit of being able to remind your new customers that they still have “XX” number of points sitting around from their first order.
OFFER POINTS AS A BONUS
Introducing a loyalty points program allows you to use the points as bonuses alongside other offers.
For example, if you’re running a promo for 20% off, consider offering double the points when your customers redeem the offer.
DOUBLE THE VALUE
If your loyalty points represent redeemable store credit, then consider sending a promo to customers with a surplus of points that offers them double the regular value of any points redeemed in the next 48 hrs.
For example, “Shop before X day, and we’ll double the value of any rewards points used toward your purchase.”
Loyalty programs are just one of the ways you can encourage customers to keep coming back to you for future purchases, rather than going with another vendor selling the same thing.
You can read about five more time-tested customer retention strategies for ecommerce businesses in the full blog post from A Better Lemonade Stand.