Expanding Your Company Online With Loyalty Applications
This is the first in a series of articles we will be publishing relaying thoughts and concepts from the Internet Retailer Conference in Chicago, which occurred June 5th via June 7th. Mark Goldstein, CEO of Loyalty Lab (a firm that implements loyalty applications for merchants), and Gary Korotzer, CMO of Red Envelope (a business that specializes in selling gift items), delivered a presentation about loyalty applications. Red Envelope presently has a loyalty plan managed by Loyalty Lab.
Loyalty programs are taking off. If you have a retail net website and you do not have some kind of loyalty plan...probabilities are that by the finish of next year you will. Jupiter Study expects that by the finish of 2007, 78% of retailers undertaking company online will have a loyalty program, compared to 24% now. So what's the large deal?
It fees a lot more to produce a new client than to sell to a repeat customer. Loyalty applications enable you to build a client base that is loyal to your merchandise, and will continue to purchase from you, rather than your competitors. A loyalty program is some kind of plan that permits your clients to build up credit to apply to additional purchases, or to redeem for cash. For example, a retail web website could grant a consumer "points" for each and read about mobile loyalty program every buy he tends to make. When he has enough points, he can redeem them for a discount on far more merchandise, or possibly redeem them for cash.
To implement a loyalty program, you need to have some way to keep up with your customers' accrued points (or whatever type of measurement you use). This should be accomplished by keeping records of a customers' transactions in a database. Goldstein and Korotzer suggested tying the details to a customer's credit card quantity. Every single time a consumer tends to make purchases with a certain credit card, a record of the obtain is recorded along with the credit card quantity. In this situation, if a client utilized a various card than in preceding purchases, her current loyalty account would not receive further credits.
You really should try to make it straightforward for a customer to know how numerous points they have. Out of sight, out of thoughts, as the old saying goes, so make confident your consumers are aware of how several points they have and how several a lot more they require to redeem their rewards.
When you start the method of deciding on the details of your loyalty system (precisely what participants will obtain, and how considerably they have to obtain for redemption), Goldstein patent pending and Korotzer argue that you must explore your company's economics as deeply as achievable. Two essential statistics to examine are the lifetime value and acquisition expense of your buyers. This will better support you determine how a lot you can afford to give to your consumers. Yet another crucial consideration is precisely who gets to participate in the plan. You could decide on to only extend an invitation into the system to the prime 20% (or whatever percentage generates the majority of your revenue) of your customers. If there is a segment of your client base that represents the majority of your earnings, then it tends to make sense to concentrate your advertising and marketing dollars on that group.
Yet another point that Goldstein and Korotzer emphasized is that your loyalty system ought to be cross-channel. In other words, if you operate a physical retail place and take orders by telephone in addition to business app development your internet website, the loyalty program should extend to all of the channels. Steer clear of confusing your buyers. Make it straightforward for them to acquire credits and money in on their loyalty regardless of what channel they use to make purchases.
Loyalty applications have been around for years in specific industries (i.e., airline frequent flyer miles) but are just starting to obtain traction with a lot of retailers. If you sell retail, you must start the process of researching the implementation of a loyalty plan now - just before your competitors does. Feel free to make contact with Work Media for data on implementing a loyalty plan for your internet internet site.
