Most of the ecommerce sites provide loyalty solution based on the customer affiliation to the product, company, or the site. No one can deny the fact that 80% of sales for the ecommerce store comes from the 20% of repeat customers or loyal customers.
Generally, there is a false opinion about the ecommerce site customers that they will jump from one site to another based on price or product range. But the fact remains the people keep sticking to the same site when it provides variety at competitive pricing. The ecommerce sites like eBay, FlipCart, SnapDeals etc are attracting more number of repeat customers by making them loyal to the site.
Loyalty helps to identify the customers uniquely in order to service them which helps to cultivate customers. Understanding the customer likes and demands helps to improve the ecommerce business. Time-to-time announcements of loyalty and special offers can retain the customers on the site. It is a proven fact that acquiring newer customers is tough than serving an existing customer. Repeat ecommerce buyers spend more than new customers. The existing customers spend 67% more than the new customers.
Hence the major success of any ecommerce site depends upon the implementation of good loyalty programs. Some key features to consider while integrating the loyalty program with the ecommerce site are discussed below.
Apart from the self-motivated customers who participate in buying, there are many other border line customers who may just need a reason to buy the product. Properly channelizing the loyalty can provide positive results by converting these site visitors to become loyal customers. Primarily the customer base should be segmented to identify the customers. Different types of customer behavior should be analyzed before implementing loyalty programs.
The strategy of loyalty can be instrumental to execute the type of loyalty. Mostly the number of repeat customers are taken into the account to calculate loyalty. Also how much a customer spends are relatively useful to measure loyalty. Measuring the loyalty plays a great role in identifying the type of loyalty based on the industry type such as household appliances, automobiles, fashion apparel, gasoline, groceries etc. The overall business strategy should be considered to select the loyalty type based on the organization.
The point-based loyalty is a common method to measure loyalty which provides certain points when the user purchases. The customer can later utilize these points to en-cash gifts or enjoy offers and rewards. The tiered program identifies loyalty based on level of customer engagement. But there are also incidents where the points collected are not redeemed. Sometimes, the customer may not have the patience to wait to collect points. They seek instant rewards for their purchase in the forms of concession, rebate etc.
There are different types of loyalty such as coalition, community based, affinity based with tiers, pure lifestyle based, pure point based, hybrid point and lifestyle etc. The coalition or strategic partnership for customer loyalty are useful when we look for company growth and customer retention. The lifestyle loyalty is targeted to specific group of customer such as women, youth etc. The affinity based loyalty concentrates on spending of the customer by providing free gifts, free products, and other privileges. Loyalty can also be measured depending upon the number of visits to the shop or business location.
The shopping carts are deeply associated with different types of loyalty program such that customer retention ratio is increased which may reflect on sales. Now-a-days loyalty is redeemed through the mobile front instead of multiple loyalty cards. Loyalty on mobile is activated using the QR code scanning at the time of sale which simplifies the work.
Earlier, the loyalty programs were not feasible for the small organization. Now, it is easier even for small organization to implement loyalty based on the IT development and convenience. The company model and customer behavior should be thoroughly studied before adopting to loyalty program.
The brand name also influence the customer to become loyal. The customer keeps on choosing the same brand since they are inhabited Establishing brand names can be useful to gain customers to the business. The loyalty programs go beyond to understand the customers to provide the apt loyalty program based on overall business strategy.