By Timi Garai
Mediamodifier / Pixabay
I know this scene really well.
We have a Skype call with one of our clients, who is the marketing manager at an online retailer. She is constantly working on new email marketing workflows, experimenting with personalization techniques, coordinating the debut of new product lines, and biting her nails over new developments, hoping they will be delivered on time.
And now, she has decided to launch a loyalty program. But when? Should it be launched before the holiday madness? Or sometime between March and August? Is it worth introducing a loyalty program in Q1, when sales typically decline?
In this blog post I will first give you details on which business objectives determine whether a loyalty program is right for you, and then I will share several mini use cases from our clients, to guide you in choosing the launch date for your loyalty program.
So, let’s get started!
I) If you haven’t been over this… Why have a loyalty program in the first place?
There are two things I would like to clarify. First, loyalty programs aren’t a good fit for every business, especially in terms of size (you may not be ready for it yet!). And second, a loyalty program can be a good choice for you, strategically, if you’re reaching for the following objectives:
A) Monetary gains by cultivating customer loyalty
When customer acquisition is no longer the best (and only) option to increase profit – as acquiring a customer costs 6-7 times more than retaining one – this is when a loyalty program gains its importance. Just refer to one example from our client base: LUISAVIAROMA, the luxury fashion retailer, generated millions of dollars in profit and 4.7% revenue in just 3 months with its loyalty program.
Amazing, isn’t it?
Our clients, LUISAVIAROMA achieved 4.7% increase in revenue, 10% increase in average order value and a 293% increase in return on investment. Their success demonstrated how a loyalty program can generate positive ROI, if the whole program is well-executed.
B) Differentiate yourself by providing a special experience
Tom Goodwin shared how a 2,500 ft M&M’s store in Times Square attracts thousands of fans. The colorful chocolates can be bought anywhere, by anyone around the world. Even so, people are still getting excited about visiting this massive chocolate store because of the unique EXPERIENCE it provides.
Product offerings, curation, prices… no longer matter quite as much. Customers want special care and acknowledgement, and they seek guidance from retailers.
A loyalty program can help you to provide that extra charm which amazes customers. Just check out this statistics from Nielsen: 72% of customers would buy from a retailer with a loyalty program over one without. Why? Because they know that something more personalized, more valuable is waiting for them in a loyalty program. Just see what our environmentally conscious client, the Swedish fashion retailer, Björn Borg, plans to do Go to the full article.
Source:: Business 2 Community