Keep Customers with Loyalty Programs
Statistically, consumers visit an online store once and never return. Very few ecommerce businesses succeed in building repeat businesses. There are a few tools that will increase the number of repeat visitors.
One is the loyalty program. These have the advantage of being familiar and popular in the brick-and-mortar world. Success is not dependent on the cost of freebies, but the overall consumer experience.
Calculating Potential Lifetime Value
How much is a customer worth to a business? This is determined by the number of repeat sales the company can expect.
Most shopping carts fail by working to secure a single sale. After that, the marketing endeavors flounder.
The simple method of calculating a customer’s value is to multiply the average sale by the number of reorders. Then factor in the profit margin, being careful to include all expenses, not just the front line expenses.
Next, calculate the cost of winning a new customer against the cost of re-selling to a current one.
Relationships
The loyalty program must be more than tossing a bonus or discount to the customer. It must build a relationship between the consumer and the company.
The ecommerce community is just starting to feel the impact of Social Networking. It is the expected to drive e-tailing for at least the next decade.
Customer Service
Before a customer will commit to a customer loyalty program, they must be sold on the concept. The online store must make shopping a pleasure. The navigation must make it easy to by-pass sales steps and reach the buy-now page. It must be easy to surf the website.
Shipping must be fast. Guarantees be solid. And, shopping cart software security hacker safe.
Price will not win repeat sales. The customer experience will tip the balance in the ecommerce business’s favor. Think ‘customer’ at every step of the way. How can the shopping experience be improved? How can the customer feel they are important to the company’s success? Is there a way to refocus the sales path on the customer, instead of the product?
Loyalty Program Strategies
There are dozens of customer loyalty strategies. They include frequent-buyer bonuses, opportunities, cash back, discounts, free items, membership, free products, and even free training.
Customers who belong to a loyalty program are twice more likely to continue making purchases than someone who is not enrolled.
Executing the Program
Many of today’s shopping cart software platforms include selling tools such as discount coupons.
Loyalty programs are a long-term initiative, and will not produce profits quickly. The success depends on several factors:
1. What can the company afford to offer? A free training program, e-course, or live workshop will cost little more than bandwidth.
Discounts may not be ‘real’ value, if the product is priced to absorb the cost.
2. What resources will be needed to manage the service? The technology is important. Using a beta open source program may be free, but it could leave the business crippled in the future.
However, cost does not measure functionality or flexibility of the software. The platform should grow with the business.
3. Work with a company that understands today’s marketing trends. Find a company that is dedicated to building relationships, and offering real time statistics. If the hosting company or agency does not use customer loyalty tools, they cannot meet your company’s needs.
4. Talk to the agency’s current clients. Make sure the testimonials are real, not padded by greed or self-serving purposes.
5. Make sure the company can afford the program. The biggest and flashiest service providers may feed a company owner’s ego, but is their business building a loyal fan base, or making a single sale. It is sometimes hard to tell.
At the forefront, businesses owners should look for a service provider who treats them like a customer should be treated, this builds a strong foundation and ensures that the customer loyalty president follows from the platform’s foundation up through the profit path to the customer.
