Loyalty programs getting new attention from online retailers
Internet retailers used to be able to acquire some customers purely as a function of the continuing influx to new web users – but no more, according Lauren Freedman, president of Chicago-based consultants The e-Tailing Group. And that’s shifting e-retailers’ focus toward driving more from the customers they already have, with programs such as rewarding frequent shoppers through loyalty programs. 26% of the e-Tailing Group’s top 100 merchants, when surveyed in the fourth quarter of last year, reported that they reward shoppers for frequent purchases and other activity, according to Freedman.
“Acquiring customers isn’t as easy as it used to be,” Freedman told attendees at a recent webinar sponsored by multi-channel loyalty program In-Store Card. Citing figures from Media Mark that Internet use increased only 1.7% over the previous 12 months, Freedman noted that customer acquisition is no longer guaranteed through Internet growth alone.
While encouraging more frequent shopping for existing customers is a smart strategy, promoting loyalty on the web does face some challenges. Freedman notes, for example, that establishing loyalty online tends to be more difficult given the nature of the web environment and its one-click access to competitors.
Best practices are emerging from retailers’ experience with loyalty programs. Among them, Freedman notes, is multi-channel program integration. Successful loyalty programs also speak to shoppers` uniqueness, don’t require the user to jump through multiple hoops to participate, and foster program sign-up across call channels. They also provide a simple reward structure and ensure a clear reward and value for information given, according to Freedman.
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