How to build a successful E-shop loyalty program?
Companies continue adding loyalty programs to improve customer retention, and there’s a good reason for doing that. The average number of loyalty programs a consumer is subscribed to has grown from 11 to more than 14, so companies are pushing big into loyalty. 56% of brands automatically enroll consumers in loyalty programs when they sign up for a customer account as they recognize the benefits of rewarding customers to improve customer lifetime value (LTV).
Below we have gathered for you the steps you need to follow to Build A successful Loyalty Program.
Step 1. You need to Know your Customers
Decide Target Audience
You must examine your traffic sources to your e-shop and target only your potential audience. The more segmented audience you have, the better the rate of conversions and engagement.
Investigate consumer’s behavior of your e-shop
It would be great if you could constantly observe your consumer’s behavior. Behavior analysis plays a vital role in understanding your consumer’s motives and what they want from your business.
Save the data of your consumers.
Customer loyalty programs are all about a personal connection with your customers and making them feel valuable to you. Saving your customers’ details like their birthdays or important occasions and anniversaries will help you remind them and the greetings that you expect their presence soon.
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Step 2. Plan your idea to create a loyalty program
What is your need to create a loyalty program?
Since you have decided to implement the loyalty program for your eCommerce store, you highly recommend measuring the outcomes you wish to achieve and the probable duration. If you want to create a community of your loyal customers, you may have planned a membership program and want to have 25% of your existing customers be part of your membership program within a year of launching the program. Setting goals at initiating your loyalty program will help you to recognize your targets and take you to complete the next step, i.e., measuring your efforts and your customer’s response.
2.Decide on the metrics to follow the performance of your efforts in the.
When we talk about our customers and measuring behavioral elements in terms of numbers, we often make a common mistake of considering it as a conversion or revenue. Instead, metrics that provide a useful outcome for the customer analytics are-
- Customer Lifetime Value(CLV)
- Net Promoter Score (NPS)
- Customer Loyalty Index (CLI)
We will further dive into these metrics in another blog post.
3. Set a budget
Maybe it is the most significant segment for any business. No proper analysis of the budget for any project can weaken the business accounts. Therefore, it is equivalent to deciding upon the budget when you’re planning to create a loyalty program. Having a loyalty program doesn’t mean that you have to reward your customers at the cost of your business. Proper budget analysis considering each phase is essential.
Step 3. Develop Your Customer Loyalty Program
1. Determine the type of customer loyalty program
A customer loyalty program is not simply one universal way to reward your customers. Instead, the more creative and unique your loyalty program is, the better is the outcome. Ten types of loyalty programs are most common, and they are the base for unique ideas. It would be best to choose the loyalty program type that is best suited for your business type and your targeted audience.
2. Plan the way to give your customers rewards
This step takes you towards the execution phase of all your planning efforts. You know your target audience, your objects, the metrics you require to make an analysis, and the most-suited loyalty program type. The last phase of your planning journey is the plan to reward your customers. If you choose to implement the “Buy and Burn Program,” then on which activities of your customers, you’ll allow them to get points and how they can redeem these earned points? Or if you choose to implement a “Subscription-based Loyalty Program”, how you willl reward the customers with monthly subscriptions or the ones with yearly subscriptions.
Let’s work together in your audience and create a scheme where all users can earn points, “hit” their digital wallet and redeem on company/store /shop vouchers as they wish!
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