Did you know that acquiring a new customer often costs up to 25 times more than retaining an existing one? Gaining loyal customers is more important than ever, and by leveraging technology-enabled solutions, you can engage and retain your customers in new ways.
THE TABLE OF CONTENTS:
- The Digital Landscape is Changing
- What is an Ecommerce Loyalty Program
- Why are Ecommerce Loyalty Programs so Important?
- Tech-Enabled Customer Loyalty Programs: 5 Key Trends
- Key Takeaways
- How Vaimo Can Help
The Digital Landscape is Changing
Yes, we know, you’ve heard it before. But it remains true: consumer expectations are changing, and customer acquisition costs are rising. This means brands and retailers need to prioritize building solid relationships with their customers, as repeat customers are good for business. As we all know, it’s usually way easier to sell more to an existing customer than to acquire a brand new one.
Enter ecommerce loyalty programs.
What is an Ecommerce Loyalty Program
Frequent purchases and equally high churn characterize the world of digital sales. And nobody likes churn. An ecommerce loyalty program is a program to reward customers for repeatedly buying from you. The rewards can range from discounts, freebies, coupons, or cashback, to memberships in customer clubs and access to unique NFT assets.
There’s a plethora of information online on the topic of loyalty programs, but many of them fail to acknowledge the critical role that tech enablement plays in increasing customer retention.
Why are Ecommerce Loyalty Programs so Important?
As we already discussed, the existing customer base is an often under-leveraged business opportunity. As anyone who’s ever worked in retail knows, it’s always easier to upsell or sell more to an existing customer than to one that has never shopped with you before. Once consumers have spent money with you, they’ll be much more willing to do so again than the average of your target audience.
In a study of ecommerce businesses, Adobe found that 40% of revenue came from just 8% of a brand’s most loyal customers. This shows the enormous potential that lies in making sure your customers return and remain loyal. Of course, this is not news to ecommerce companies. A study by Accenture found that more than 90% of companies have some kind of customer loyalty program.
In fact, given the competitive digital landscape, it makes sense to view customer loyalty as one of the most important acquisition channels for brands and retailers. Acquiring an entirely new customer can cost up to 25 times more than retaining an existing one, so it’s definitely a good idea to invest ambitiously in your existing customer base.
As brands and retailers realize that it’s both easier and more profitable to keep and expand business with their existing customers, ecommerce merchants are increasingly looking for new ways to build a loyal customer base. Tech to the rescue!
Related reading: How to Improve Customer Loyalty in Ecommerce
Tech-Enabled Customer Loyalty Programs: 5 Key Trends
An Omnichannel Approach to Loyalty Programs
The next generation of loyalty management tools, we’re starting to see, allow brands and retailers to design, build, manage, and analyze their loyalty and rewards programs in a much more integrated way than before. These tools offer solid analytics and more direct marketing features, adapted for today’s modern multichannel ecommerce landscape.
Paris-based Splio, for example, is a platform that helps brands and retailers set up their own loyalty programs online, offline, and on mobile. Splio recently integrated its marketing platform with WeChat to enable communication and engagement with Chinese consumers.
Another loyalty experience solution is Annex Cloud—a platform that combines best-in-class technology with expertise in ecommerce loyalty to design customized loyalty programs for brands and retailers.
Related reading: Omnichannel Strategy & Investments in Mobile Commerce
Alt-currencies and NFT in Ecommerce
Despite the recent changes in the crypto market, the innovations that arose from their inception are here to stay. From alt-currency to fractional shares of digital assets, embracing new solutions can help retailers create engagement and drive revenue but also helps build loyalty.
With the popularity of alternative types of investments not slowing down, it’s becoming increasingly crucial for ecommerce businesses to find a way to include digital options in their customer experience. The relevance depends partly on your target audience and their preferences. But according to a Harris Poll, as many as 44% of consumers now say they’d like to receive loyalty rewards in digital assets.
One real-world example of a company creatively leveraging digital assets to build loyalty is Elf Cosmetics. The Elf Cosmetics team leveraged Bitski to offer a #CryptoCosmetics collection of 9 makeup-themed NFTs inspired by the company’s cosmetic products. Rewarding customers with limited-edition NFTs or crypto is an increasingly popular way to increase engagement and retention and make loyal customers feel like they own and are part of something unique and exclusive.
Related reading: 7 Benefits of Offering Cryptocurrency Payments in Ecommerce
Automating Personalization is Key
The importance of omnichannel personalization keeps increasing. The ability to personalize rewards and incentives at every touchpoint in the customer journey across all devices and channels will become a key differentiator as multichannel shopping continues to gain ground.
Achieving this seamless experience across all online and offline interactions requires solid technology solutions. One example of such a platform is SpotOn, a payments and customer service solution that offers integrated payment hardware to make it easy to enroll customers in loyalty rewards programs at checkout in brick-and-mortar.
Attentive is another technical solution for loyalty-building programs. With Attentive, brands can send personalized and targeted messages at all the different stages of the buying journey. By engaging customers with timely and highly relevant text messages, brands and retailers can build greater loyalty and drive more revenue.
The third example in this space is Segment which offers a powerful customer data platform alongside its automated personalization engine. The Segment platform provides a single view of each individual customer across all channels by unifying all customer data, including data from email, Facebook, and Google ads.
Related reading: After-Sales Service: How to Support and Engage Customers
Zero-Party Data Fills the Void
We live in an age where the possibilities for merchants to gather and store customer data are more limited. Brands and retailers increasingly rely on their customers voluntarily providing personal data, and shoppers are more willing to do so when they receive personalized offers.
As cookie deprecation continues to take its toll on digital marketing, loyalty programs can be a way for retailers to unlock the potential of zero-party data. Data runs the world, so the brands who do find new ways of mining this new oil will be the ones who win. The need is further exacerbated by all the ongoing changes to consumer privacy regulations.
The remedy lies in personalization, as consumers continue to expect and want customized, personalized, and channel-relevant experiences. If they believe they can trade their data for this, many will be more willing to do so.
Related reading: First-Party Data Strategy: Tips and Trends for success in 2022
No Technology Can Replace a Strong Strategy
So as we’ve seen, there’s a wide variety of technical tools and tactics for increasing customer loyalty. Brand-enabled rewards, digital loyalty points, cashback rewards, and card link programs are valuable ways of building loyalty and retention. But it’s important to understand that tech alone is never the whole answer; how you use the technology will make the difference.
Partnering with an experienced digital agency is a great way to understand the potential of ecommerce customer loyalty programs and to explore, guided by experts, what solutions and strategies best fit your particular brand and business.
Related reading: Vaimo Guide to Building a Digital Strategy Roadmap
Due to changes in customer behavior and rising acquisition costs, customer loyalty programs have never been more relevant. In order to build winning customer experiences that help you retain your customers over time, implementing the right technologies is critical. In this article, we’ve had a closer look at five key trends in the tech-enabled customer loyalty space:
- An omnichannel approach to loyalty programs
- Cryptocurrencies and NFT in ecommerce
- Automating personalization is key
- Zero-party data fills the void
- No technology can replace a strong strategy
How Vaimo Can Help
At Vaimo, we’re experts in all things ecommerce. We’ve helped hundreds of ecommerce businesses build out and execute digital strategies, to grow their brands and increase their revenue.
Our strategy team can help you understand your options and build a roadmap towards maximal customer loyalty. We can help you implement the necessary tools and guide you in selecting the right path as you create your ecommerce loyalty program.
Get in touch with our team of experts to learn how we can help you increase your customer retention!