Loyalty is one of biggest challenges in ecommerce today.
Massive amounts of money and effort are spent on user acquisition, but the majority of first-time visitors never come back to the online stores and services. Not only do 70% of companies say it’s cheaper to retain a customer than acquire a new one, returning customers spend 67% more than new customers.
When loyalty programs are done right, they can be incredibly powerful and add tremendous value. On average, loyal customers are worth up to 10 times as much as their first purchase.
[bctt tweet=”On average, loyal customers are worth up to 10 times as much as their first purchase.”]
However, it’s not that simple to launch an effective loyalty program: “49% of internet users believe that all reward programs seem alike.” So, what can be done to differentiate your program and make it effective?
At Captain Up, we believe Loyalty Programs should revolve around a lot more than earning points for purchases.
Here are 3 important aspects to focus on:
- Emotional bonding with the brand, driving true loyalty – to get there you have to foster positive emotions such as excitement, success, familiarity, and belonging.
- Engagement as a key driver of loyalty – when your loyalty plan rewards users for a wide variety of actions on your site, beyond purchases, such as visiting, reviewing products, sharing on social networks, or watching videos, you provide your users ample opportunity to discover your offerings and reinforce your value propositions.
- Finding your most passionate users and turning them into advocates – establishing valuable ongoing relationships and rewarding positive word-of-mouth and social shares is key to converting customers into advocates.
Sounds simple, right?!
We sorted through numerous loyalty programs on online shops and found some great ones that successfully demonstrate how you can convert first-time visitors into loyal customers:
The Sephora program is one of our favorites.
Just like they say, it really is a fast track to a never-ending supply of beauty rewards. Once signed up, every dollar spent earns you a point.
These points accumulate and guess what? You get rewarded!
It is addictive, and it works.
How is their program effective?
Sephora have flawlessly executed their three-tier program with Beauty Insider, VIB (Very Important Beauty Insider) and VIB Rouge:
Once signed up for free, a Beauty Insider receives a birthday gift, free beauty classes, product rewards and seasonal promotions. In order for them to unlock VIB status they have to spend $350 or more annually.
A VIB (Very Important Beauty Insider) receives all of the above plus first dibs on new products, seasonal VIB gifts, and private VIB-only shopping events.
For those major beauty junkies who spend $1,000 or more annually, VIB Rouge gives them all of the above plus free two-day shipping on all orders, unlimited access to the beauty studio, special gifts and access to exclusive events.
Members who reach this top tier feel special, as though they have achieved something impressive. At the same time the VIB Rouge status is attainable, so it does not de-motivate lower-tier customers, but encourages them to spend more and reach the top.
All members (no matter which tier) receive personalized product recommendations. These are based on members’ prior purchases, and for newly joined members, Sephora encourages them to fill out a “beauty profile,” where they have to input information about themselves so the Sephora experts can generate tailored recommendations.
Sephora implemented this program to improve its renowned customer experience – and boy did it work!
To learn more about this awesome loyalty program or become a Beauty Insider member yourself, go to: https://www.sephora.com/profile/beautyInsider/
Simply Party Supplies have combined their love for gaming with their customers’ love for shopping!
Their Customer Loyalty Discount program allows customers to earn up to 40% off on all orders.
By signing up using Facebook or Twitter, customers can earn points by visiting important pages, viewing products, liking, tweeting, commenting and of course, shopping.
These points accumulate and customers can click their way up to the highest level of fame: Shopping Superstar. When customers reach this level they are entitled to 40% off on all purchases – and until then they are entitled to other discounts.
How is their program effective?
Using the Captain Up plugin, Simply Party Supplies converts visitors into an engaged community of loyal customers.
They know how to convert customers into advocates by rewarding customers not only for shopping but for actions such as social sharing.
There are 35+ badges to win from for completing a wide range of tasks – whether it be viewing the contact us page or linking and tweeting 5 products. The badges add fun and encourage shoppers to become familiar with the website and products, while having a good time!
Simply Party Supplies knows how to motivate shoppers at all levels of their loyalty program. Each time a customer levels up, they will see a new discount code that can be used during the checkout process. Even those at level 1 receive a 3% discount on all orders, and when they know they can earn up to 40% off on their purchases they have a major incentivize for getting there!
Simply Party Supplies give customers a fun way to earn discounts.
Want to learn more about how they do it? Check out the easy to use Captain Up plugin.
The Nordstrom loyalty card is easy, hassle-free, and in our eyes irresistible!
And the best part about it? Every 2,000 points earned will entitle you to an additional $20 Nordstrom note!
The more you spend, the more you are rewarded, and each level of the loyalty program unlocks more rewards and new experiences – happy days!
Another aspect of the loyalty program is the “special point events” in which customers earn bonus points and are given first access to exclusive offers.
How is their program effective?
InCustomer Loyalty Schemes in the Retail Sector, Alvarez and Sesia discuss how loyalty schemes evolved.
Alvarez says “I think Nordstrom is a great example of a retailer that’s doing it well. Nordstrom looks at the rewards program from the perspective of how can we be a better agent for the consumer.”
The level system is implemented perfectly:
Each level unlocks more rewards and new experiences for the members. They enjoy more access, more benefits, and the chance to take advantage of special perks such as a concierge service and free alterations.
All four tiers are meaningful and engaging for shoppers. Even the lower levels of the loyalty program offer substantial and enticing benefits.
Level one cardholders receive $100 worth of tailoring and those who reach the higher levels receive up to unlimited free tailoring.
The four tiers encourage members to reach new levels and earn bigger rewards. Top cardholders are in for a treat! They are given the option of six complementary private shopping experiences for the cardholder and friends.
The experience includes a limo-and-lunch package, a couple’s personal styling session, a spa escape package, and a teen fashion party including live DJ and personal styling.
Wow! Nordstrom really knows how to reward loyal members!
If you are going to reward your members and want to convert them into loyal, returning customers, you have to impress them. You have to incentivize shoppers to take part with rewards that will excite them, be useful, and most importantly motivate them to return.
Shop→ Get Rewarded → Repeat
Does this sound good to you? If so, then perhaps it’s time to become a Nordstrom member and let the loyalty points roll in!
The Van Dal Shoes program is a great example of ecommerce loyalty put into practice.
Every time you shop with Van Dal you earn points.
Every 25 points you earn is equivalent to a £1 saving on your next purchase.
You are rewarded points for opening an account, reviewing a product, signing up to receive a newsletter, and also get bonus points for big spending!
How is their program effective?
Rewarding customers with £1 for every 25 points collected definitely works, but the element of surprise works even better.
When a Van Dal Shoes loyalty member is unexpectedly rewarded with bonus points based on their order size, the customer is left feeling delighted. This feeling of happiness and excitement leaves customers with a positive impression of the brand, encouraging them to stick with the brand and come back for more.
Van Dal Shoes also runs promotions from time to time where you can earn extra points. Extra points mean extra money – happy days!
Another reason this loyalty program is so effective is its simplicity. Any question that a potential member might want to ask is answered instantly on the loyalty program’s landing page.
Before you join any loyalty program you probably ask yourself:
- How do I get started?
- How do I redeem my points?
- What do I get points for?
- What do the points convert into?
Rather than Van Dal redirecting you to a FAQ, the loyalty explainer page flawlessly takes care of everything. If the explainer page does not engage potential members to participate in the program, what is the point?
What we love about Van Dal’s explainer is it excites customers about the program, it simply explains how the program works, and it convinces customers to participate.