It is easier to sell to existing customers than to new ones: they know what you offer, and they are already interested in your product. But even if they like what you are selling, it is only natural for them to be curious about other stores too. A loyalty program is a great way to persuade your customers that the grass is always greener on your side of the fence.
A loyalty program is a way of rewarding your customers with discounts, free merchandise, coupons, or special offers. It encourages your customer to stay loyal, and there are different types of loyalty programs to choose from. Read on to find out which one suits your store best.
1. The Points Program
It is one of the simplest loyalty programs: buyers earn points for every purchase, and they translate them into rewards. It can be discounts or freebies, and the main rule here is to keep it simple.
It must be easy to calculate and use, for example, 1 point for $1/5/10 spent in your store. Points can be earned not only for purchases, but also for engagement, or visits — for instance, liking a FB page and subscribing to a newsletter.
This type of loyalty program works best for short-term and high-frequency purchases.
For example: the Banana Republic card gives you 5 points for every dollar spent at Gap, Banana Republic, Old Navy, or Athleta.
Tip: the Gratisfaction app from the Ecwid App Market can help you run a points loyalty program.
2. The Tier Program
A tier system means that the size of the reward increases over time. The more a customer buys, the bigger the reward they earn.
The key to success here is to always let your customers know the benefits, their status, and how close they are to a new level (= additional reward). This way they will try to achieve a higher status, increasing the purchases.
This system works best for long-term customers and high-priced businesses.
For example: the Sephora Beauty Insider program gives you a variety of rewards depending on how much you spent on their products in the past year. It includes invitations to exclusive events, a private hotline, and flash two-day shipping.
Tip: use Order Export to find out how much your customers spent last year. On your Sales list, click “Export Orders” and download a CSV file. You’ll be able to work with it in Google Sheets to filter customers that ordered over a certain sum from you.
3. The Fee-Based Program
When customers join this type of loyalty program, they pay a fee to get VIP membership. It frees them from obstacles that could prevent future purchases. You can offer free shipping, bigger discounts, or exclusive products.
Keep in mind that it is most effective for repeat purchases and may not be as interesting for new customers.
For example: The Amazon Prime membership provides you with free shipping and cool perks to choose from, such as access to video streaming, prime rewards, or early access to selected deals.
Tip: You can sell a VIP membership…