How To Win Big With L&R


For 75% of eCommerce sites out there, 9 out of 10 customers will NEVER come back and shop again. Yet online retailers keep spending money on marketing. So what should eCommerce sites do?

The only way to retain customers is by gaining their customer’s loyalty. By establishing a personal connection through a loyalty and rewards program. Or L&R as we like to say in the business.

What is Customer Loyalty?

Customer loyalty is customer's willingness to buy from or work with a particular brand again and again, over other brands. It's the result of a positive customer satisfaction, and the value of the products or services the customer gets from the transaction. These values could be intrinsic or materialistic. Apple is a great example of a company that has built a huge brand loyalty based on the intrinsic values their customers derive from their products.

Why Is Customer Loyalty Important?

Customer loyalty is something that all companies should aspire to simply by virtue of their existence: The point of starting a for-profit company is to attract and keep happy customers who buy your products and services to drive revenue. Loyal customers convert and spend more with brands they're loyal to more often, and they tell their friends and colleagues about those brands, which helps drive free referrals.

There's a lot of data to support the value of cultivating customer loyalty:

  • Loyal customers convert and spend with brands they like more often.
  • Loyal customers spend more than others.
  • Loyal customers tell their family and friends about positive experiences. Word-of-mouth marketing is more effective at driving new customers than branded content and advertising.  And in turn, these referred customers become loyal customers that are likely to spend more than average.
  • In the U.S., 40% of online shopping revenue comes from repeat customers, who make up only 8% of site visitors.
  • And in a world where hundreds of different options exists for virtually any product or service a customer might purchase, the fact that so many keep coming back to the same brands is really saying something. It indicates that a customer trusts and loves a brand -- and that the value they get from being a customer outweighs the potential benefit of a lower price or a different product from another brand.

Since we know that it costs more to acquire a new customer than to retain an existing customer, the prospect of mobilizing and activating your loyal customers to recruit new ones -- simply by evangelizing a brand -- should excite marketers, salespeople, and customer success managers.

But how do you do it? How do you turn happy, satisfied customers into loyal brand evangelists? How do you use positive Yelp reviews, glowing tweets, and Instagram mentions to propel your brand's growth?

Here are the 6 main different ways to build a successful L&R program:

  1. The Point Program
    The points system focuses on the principle that the more you spend, the more points you get in return. Every time a customer makes a purchase, they get a certain amount of points depending on how much they spent. 

  2. The Paid Program
    Paid programs involve inviting customers to pay a monthly or annual fee to join your VIP member’s club. Think Costco! For this type of loyalty program to be effective, you need to market it to existing customers or frequent buyers. After all, new customers are unlikely to join a rewards program unless you’re a big, recognizable brand.

  3. The Charity Program
    Not all loyalty programs include discounts. You can incorporate your business values into a program to build a stronger relationship with your customers. In fact, if you structure a loyalty program around mutual values, customers are more likely to become brand loyalists.

  4. The Tier Program
    The tier system focuses on levels of loyalty. Put another way, the more loyal your customers are to your brand (read: the more they buy from you), the greater the rewards they’ll receive. Offering tiers in a loyalty program is a great way to engage customers and keep your brand top of mind. Further, tiers play on aspects of gamification where members reach higher levels, the more they “play.”

  5. The Partner Program
    Progress is a great motivator. The more people believe they are nearer to achieving a goal, the more committed they are to their efforts to achieve that goal. This is known as the endowed progress effect, and it’s an effective psychological trigger you can use in your loyalty program to encourage repeat engagement.

  6. The Subscription Program
    There’s a new type of loyalty program in town……it’s the subscription program. This is not your traditional loyalty program where rewards and benefits are offered. Rather, you offer your products on subscription.
There are a lot of different L&R providers out there with varying features and sophistication, but our preferred L&R provider partner is Kringle.  Kringle provides omni-channel tracking, automated recommendations, real-time reporting, and much more.  On top of that, they use machine learning to accurately target customers with powerful personalized offers across all customer touch points. Kringle really is a next-level L&R provider which allows you to customize a loyalty program that works with your business, and is why we've completed many seamless integrations with them to the delight of our customers.
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