When you launch a store, your focus should be on customer acquisition. But at some point, your traffic and sales will start to plateau. If you’re at that point already, it’s time to turn your attention to customer retention. Today’s guest blogger, Darren DeMatas, co-founder of Selfstartr, an ecommerce consulting company helping merchants launch their ideas and achieve their goals, tells you how.
A go-to retention strategy for many ecommerce businesses is to launch a rewards program. Why not? The average U.S. consumer is enrolled in over 13 loyalty programs! Tapping into your existing customer base makes a lot of sense:
- It is 6X more expensive to acquire a new customer than it is to keep one
- The probability of converting an existing customer is 10X higher than a new prospect
- Current customers spend 67% more than new ones
The customer loyalty infographic from Selfstartr shows that these programs can generate ROI if you take the right approach. Here are three essential tips to launch a profitable rewards program that builds true loyalty.
1. Reward For Engagement
Almost all loyalty programs reward customers for spending money (97%). But only 25% reward customers for engagement. It’s no wonder that 77% of them fail within two years. Customers want to build a relationship that goes beyond money. Prestashop loyalty add-ons like All-in-one Rewards make this possible. In addition to purchases, you can reward customers for referring their friends to your site through blogs and social media. This add-on allows you to easily give points for likes. Showing up on your customers’ Facebook wall helps expand your presence and create engagement. Under Armour is a fantastic example of engagement-based rewards. They give customers points in exchange for exercising and healthy eating.
2. Don’t Make The Focus On Discounts
71% of loyalty program members earn more than $100K/year. Not too shabby. While we all like a good deal, it’s safe to say that a saving an extra few bucks won’t really drive customers to purchase. According to Harvard Business professor Gerald Zaltman, 95% of our purchase decision process occurs in the subconscious mind. So price isn’t necessarily the first barrier you should try to overcome. Often, customers are not sure what product to buy. Clear contact information, links to customer service policies and live chat can help boost buyer confidence. Show your customers you’re there for them, not just to collect money.
3. Show Customers That You’re Loyal To Them
Show customers that you care about them more than their money. Make customer service friendly and accessible, even for non-paying customers. You can save your product rewards for high dollar clients, but everyone deserves top notch service. 73% of consumers feel that loyalty programs are for businesses to show their loyalty to customers. The customer is always right, right? Treat them like you want them to come back and they actually might.
Courtesy of: Ecommerce CEO If you’re looking to improve your customer lifetime value, be sure to check out all the reward program add-ons from Prestashop. Darren has an MBA in Internet Marketing, but hangs his hat on a decade of experience in the trenches. Check out Ecommerce CEO to learn more about ecommerce. Follow him on Twitter and LinkedIn.