Why Social Loyalty Programs Are Valuable for Retailers
In the increasingly competitive e-commerce industry, there's more pressure than ever to stand apart from the crowd and stay top of mind for consumers. With retail giants like Amazon.com and Alibaba.com continuing to scale and dominate on price, convenience and selection, the need to retain core customers is essential. Many retailers struggle with how to remain economically relevant and connected to their most influential customers. Also, consider that it costs a business five times to 10 times more to acquire a new customer than it does to sell to an existing one, and that current customers spend more than those who are new to a site, 67 percent more in fact. Therefore, finding a way to drive repeat purchasers is paramount.
One way that we've been able to help our clients retain customers at a greater rate is through implementation of on-site social loyalty programs. A loyalty program is extremely customizable to suit your brand and your audience's needs. Businesses essentially offer incentives for users to take on- and off-site actions like enrolling in an email program, liking their brand on Facebook and referring friends to a purchase. Rewards are also customizable but often include discount codes, free shipping or gift cards. The benefits to creating an engaging and personalized user experience directly on e-commerce sites are numerous.
Meet User Preferences and Collect Data
- Social login has gained widespread popularity for its ease of account creation and ability to stem password fatigue. Eighty percent of social media users now prefer to connect to brands via Facebook.
- Customers create a loyalty account by logging in socially, giving retailers access to valuable information including name, location, likes, interests, demographics and email address.
- Analysis of this data reveals detailed audience profiles, which help retailers remarket to customers and better engage prospects.
Customers Stay for Longer
- Aside from data collection, social login increases engagement — consumers spend 50 percent more time on sites and visit twice as many pages when connected to a social account.
- Longer browsing times also leads to higher conversion rates.
A Little Goes a Long Way
- You know that repeat customers spend more and are cheaper to sell to than new ones, but in his book "The Loyalty Effect," Fred Reichheld showed that even an increase in customer retention as small as 5 percent can lead to a 25 percent to 100 percent jump in revenue
- Loyalty programs inherently create repeat customers. One study showed that offering points can increase repeat visits by up to 20 percent.
Your Competition is Already On Board
If you've been on the fence about the merits of a loyalty program and whether it's worth the investment, keep in mind that 65 percent of marketers say they're currently running a loyalty program. The longer you wait, the more you stand to miss out on this growing market trend.