Customer loyalty programs – An Advantage or a Disadvantage?
A customer loyalty program can be an advantage for the website owner’s if done well. If up & running properly, loyalty programs can keep your customers turning back for repeated purchases. The ongoing rewards, Cashbacks & sales can convert casual browsers into potential recurring buyers.
But if done wrong, it can be a curse for the website owners. If the running customer loyalty program is below the line, it can lead to a loss of customer’s interest in the offered products & services. Moreover, it will be a waste of time, resources and money.
A potential customer once lost is hard to retain back. But keeping some key factors in mind we can forsure use these loyalty programs as a customer retention tools.
What is Customer Loyalty Program?
A customer loyalty program is a rewards program offered by a company/website to customers who frequently make purchases. A loyalty program may give a customer free merchandise, rewards, coupons, or even advance released products.
Using this technique, we can target both new & existing customers.
Loyalty programs can also be called as ‘incentives’ offered to the buyers against purchase of any product or service. The incentives are directly proportional to the order amount i.e. higher the order amount, higher will be the incentive received by the buyer. The incentivisation can be in terms of discounts, freebies, in cashback points or any other form.
What offerings can churn maximum outputs for you?
From a wide range of offerings, customer loyalty programs can vary on the basis of Product/Services or on the business’s working strategy/planning.
- Offer Cashbacks on purchases
The cashback offering program allows customers to earn money back from previous purchases and redeem them after a certain interval of time, amount or purchases. The cashback if often a pre-defined ‘x percentage’ of the order value & is credited back to the user’s online wallet after a certain interval of time. This cashback can then be spend on future purchases, effectively discounting the future purchase.
- Offer Discounts
The discount program offers a certain percentage discount or flat amount discount on an order. Discounts can be applied either to a specific product or to the entire order.
These discounts can also be referred to as ‘sales’. The discount amount is offered on the MRP of the product thus reducing the sales prices of it.
This program usually applies instant benefits to customers during check out.
- Offer Reward/Royalty points in online wallet
With the royalty points program, customer is offered royalty points in his account based on the behaviour of his previous purchases. The accumulated points can be redeemed as virtual cash in their online wallet which can be redeemed in the next purchases.
With his reward or royalty point program, users are motivated as they earn points upon their actions performed on the website.
- Refer & earn
With the refer and earn program, users are rewarded with virtual money in their online wallet for referring their family & friend to make a purchase of any product or from any specific website. Using this program, both the referrer & the referee earns a certain amount in their online wallet which can be redeemed in their next purchase.
This program motivates a user to refer a product/service/website to his family and friends to earn some extra amount in his wallet which in turn is beneficial for the website to increase their visibility and to generate more orders out of the referrals.
- Offer membership subscriptions
The membership subscription program entitles the user to subscribe as a premium member on the website. With this premium member subscription, the user gets an advantage of many premium facilities like 1st access to pre-launch products, flash sales and introductory products, free shipping for his orders, access to exclusive shopping events & products etc. For e.g. Amazon Prime.
- Offer freebies
With freebies program, the website owner gives away some freebies with every order placed on the website. These freebies can be product dependent & independent. For e.g. while selling a shoe, the buyer can be offered a pair of socks as a freebie and while ordering a mobile the buyer can be offered a screen guard as a freebie.
Offering freebies enhance the user’s buying experience.
- Free Shipping
With the free shipping module, the website’s owner offers the buyer a free shipping of his goods over and above a fixed order amount. If the order amount exceeds that threshold limit, no shipping charges are incurred by the buyer.
This program encourages the buyer to purchase the products of a minimum amount of that threshold limit so as to avail free shipping.
- Gift cards
Gift cards are the prepaid cards that can be purchased from the respective website by a user. The user when purchasing a gift card is given a unique gift card number which can be used to make purchases by him. No cash transaction is required while redeeming a gift card.
The rules regarding a gift card is set by the admin.
When can these rewards be offered to the buyers?
The above-mentioned rewards can be offered to the buyers based on their actions/tasks. The actions might include:
- On User registration
- Buying a specific product
- Festive season discounts
- On referring a friend
- Custom offers based on Birthdays’, anniversary etc.
- On basis of order amount (higher the order amounts, higher is the cashback/loyalty points)
- User’s activity on social media page- promotions by user.
Benefits of enabling these customer loyalty programs on your website:
- Boosts up your sale.
- Brand promotions
- Existing customer retention
- Increased traffic on website
- Increased CLV (Customer’s lifetime value)
- Recurring orders from customers
- More orders means more revenue generation
- Customers mouth to mouth publicity of your brand
There always comes a time where the supplier fails to supply you products that your shoppers like. Putting words like “out-of-stock” can cost you your profits. At the same time you can’t make false claims to your customers and not deliver the product. If your supplier senses you’re desperate, he will undoubtedly increase the price for getting the product. But your ultimate goal remains to keep the customer unaware of the stock shortage and as well retain the customer.
So how do you do this?
- Accept you’re out of stock– If your user comes looking for a particular product, there is no harm in telling that the product they desire is out of stock. Also here you can add in a link “inform me when the stock is back” notification. These in stock requests help the customers know that you can get the product for them. Store the user’s email id and let them know that you’re sorry for the inconvenience and assure them that the stock will be back soon.
- Limited stock– If you’re sure that the supplier is delaying the delivery of the product to you, make sure that your product page shows “Limited Stock” and increase the days of delivery for that product. This way the user wouldn’t be aware of your actually being out of stock and as they say Ignorance is bliss. The customer can be warned about the late delivery but getting the product delivered by that time is important to keep your reputation.
- Show something similar– If the customer is looking for a certain type of soap bar made out of orange extracts, which is not in stock, show the customer another soap bar with similar ingredients. This way you can expand your customer’s view on other products and give them something similar without losing them.
Though we recommend these solutions for products that can be replenished but in case you are selling designer items, handmade products or one-of-a-kind item, which you believe cannot be replenished then you need to decide whether you still want to show the product listing on your e-commerce website or not.
So next time when you go out of stock on a particular item don’t sweat cause you can still keep selling and retain your customers.
How many of us cherish online shopping experiences? Not all of us have good memories of placing an order for something online. It’s not always online; even personal buying experiences are not always good experiences. Gone are days when the proprietors were worried only and only about the profit their income and loss statements showed. They’ve finally realized that going behind numbers can help you survive in business but aiming for customer satisfaction can help your business grow.
So now that the money myth is solved, let’s jot down top reasons why sellers were so unaware of this whole “customer satisfaction thing”
- Imagination crisis– When our imagination expands, we can fit in things that never existed. Imagination helps you create services or products which you always thought was a figment of your brain. The first car was created only when Henry Ford imagined a vehicle that took you round the block with four wheels and an engine. So when imagination suffers, the products remain just there and suddenly you see your customers switch brands because your competitor came up with something that you never imagined.
- Lost focus– You may have visualized something but the outcome of all that work is something else. This is when the product you want to build and the service connected to it dwindle because your expectations are not met. When this happens, you can imagine the customer. His expectations are also not met hence he will not deal with you anymore.
- Customer’s mind set– When a customer is buying a product or a service from your ecommerce store, he expects something in return for his money. To get business you will list out the salient features of your product and close the deal. Oops! But when your customer finds a certain hitch in using the product, he’s sure to have complaints which of course will lead him to blacklist you.
Making customers happy and keeping them satisfied is not rocket science. But at the same time, it involves some conceptual clarity and effort to know your customers. Till today, this technique of selling has not failed. Word-of-mouth publicity or simply called WOM publicity is where a customer who has used your product provides a positive/negative feedback to other people. When you’re product is good enough, you don’t need to spend a penny on advertisement.
So if you want to bag good sales and reputation in the market then only WOM can come to your rescue. Today, we have more sellers of a product than we had yesterday. So how do we cut the competition?
- Study who your customers are and survey their preferences and tastes.
- Define your company’s vision in terms of selling and create a value system.
- Don’t stop innovating and tell why they need to choose your company from the rest of others.
- Keep your customers first and invest in the relationship by selling them what they require and give an after sales call to know how they like your service.
- Make sure you get a feedback from your customer on the services and products purchased.
Like I said getting your customer satisfied is no Rocket Science and in todays world what matters more is to have more retained customer cause they get you a steady flow of new customers. Though it is difficult but the first question you need to answer to a customer is “WHY”. Make sure you have that defined, communicated to your team and don’t forget to communicate the same to your customers.
In a competitive markets if there is a way that can help you connecting directly to your client with a live person then that has a great standout effect. As commerce have matured the buyers expect world class services out of online sellers. Having this kind of a feature on your website comes out to be a unique selling point that compels your customers to choose you against your competitors. We buy from businesses we TRUST and an online transaction system backed with live chat support increases your trust factor.
Why do you need a live chat support for your e-commerce store ?
Think what do you do when you are at a online portal and a question pop’s up in your brain that needs an answer. Yes you go to their contact us page, look for their contact details and dial them. Now this was just one part of it but once you have called you are welcomed by a machine run IVRS system which asks you to hold (sometimes for infinite or indefinite period) you call and if it is one of your lucky day you get to speak with the customer support executive asking him the question you had. Now ask your self would you like your customers to go thru this nerve wrecking process when they are standing in front of you with their wallets open and the only thing that stops them from buying from you is an answer to few questions they have.
Well at this point a live chat support come out as a “convenience” to your buyers at a very little expenditure as compared to telephonic support. It makes your business stand out from competition and achieve a stronger connection with your brand.
Does Retaxis stores support live chat support ?
Yes ! we are delighted to announce that Retaxis empowered e-commerce stores now integrates seamlessly with Zopim and Olark two of the major live chat support solutions provider.
All you need to do is to sign-up for your accounts on their websites and fill in their client codes on your Retaxis e-commerce store setup area. Once done your online store is empowered with live chat support.
For more details on integrating live chat software on your Retaxis e-commerce store, visit our Knowledge base section.
“Caveat Venditor”- seems familiar right?
Flip across through your commerce textbooks and you’ll know it means “Let the seller be aware”.
Today “Caveat Emptor” (let the buyer beware) is a term that is long forgotten.
Having an e-commerce website in today’s scenario just doesn’t mean selling products, it’s about building a network of loyal and trusting customers.
It’s hard not to find similar e-commerce sites selling the same things you are selling. Price is no longer the USP in today’s market.
As customers, price being an important factor is not the only deciding factor. So given these many e-commerce sites, why will a customer choose your site among all the other dynamic sites? It’s a question of what we simply call “TRUST”. So building trust does not involve providing huge discounts and running at loss. What you can do is follow few easy steps to build trust for your buyers and expand your e-commerce business.
- Create a dynamic yet simple website showcasing your products
It is important not to jam pack your site with flyers and unnecessary options. Make sure to keep it simple. The signing up procedure must not be tedious and the facility of remembering every search the prospective customer has made. Make sure to bring up the related results from the previous searches. Put in a top up box that asks the user for any preferences.
- Don’t hide negative reviews
As a customer shopping online, the feel of the product is missing, so that’s why the customer reviews come in handy for the user. The reviews be bad or good, show them without filtering and showing only the good posts. Remember quality is long remembered even after the price is forgotten.
- Post informative articles
Make it a habit to provide your customers with important statistics and informative feeds that help the users of different product. This means to say you care for your customers.
- After sale feedback
Many e-commerce are content in closing a sale. But the real test of your customer relationship begins after the sale is closed. So send in queries to your customers asking for feedbacks, complaints and suggestions. Ask your customers to take a little questionnaire to help you understand what they expect of you. Also ask them to rate you at different areas of improvement
- Prove to be a pro
The products that you are selling are to be understood by your as a seller first. So post informative feeds that show your expertise in the products you’re selling. By doing this your customers will be able to choose the products more wisely because you’re providing them with all the tips that they might have to get from elsewhere.
- Implement a Payment Trust Seal
The biggest fear a buyer has today is the privacy of his information and security of his credit card details. To ensure this be sure you have added a privacy clause in your privacy statement and top of all a payment verified seal like Verisign Secure or Mcafee Secure Seal does indicates that you are serious about your business and do take care of customer’s sensitive information
Establishing that trust is quite a challenging strife with the competitors we have today. As we all know that the trust cannot be built in a day, it will take time but trust me all your effort to achieve this will be fruitful.