4 Ways a Loyalty Program Helps Counter the Higher Cost of Living
The cost of living continues to rise. A few weeks ago it was announced that inflation hit a 40-year high. While many e-commerce businesses will see their sales impacted by the rising cost of living, there are some things that can be done to keep sales strong during this time. And they all boil down to one thing: driving greater revenue from your existing customer base. Now is the perfect time to look at your loyalty program and consider these four additions to your program.
Bonus Points Promotions
Businesses can use their loyalty program to make the purchase of certain products more appealing — e.g., offering double or triple points or promotions to encourage the purchase of a particular range or collection that shoppers might otherwise put aside until they have more disposable income. This tactic doesn’t just help drive shoppers to products; it also helps brands compete without lowering prices as shoppers can see additional benefits in buying from these businesses.
Consider offering loyalty program members sample-size free gifts each time they purchase. This helps place products in front of more people. Furthermore, it increases the likelihood that when they again engage in some retail therapy, they'll come back to purchase the full-size product of the sample they’ve tried.
Take Advantage of Occasions
Even though people may be more closely monitoring their spending, holidays and special occasions are here to stay. Merchants should look at aligning their loyalty program promotions with upcoming calendar events such as the start of the summer, graduations, Father's Day, and the Fourth of July. People will still be looking for gifts and products centered around these occasions. Brands should focus on offering top-tier members early access to sales at these times or run double or triple points promotions for loyalty program members to secure purchases around these holidays.
Increase average order values during a period of lower spend by incentivizing loyalty program members to buy bundled products. For example, offer additional points on those bundles. While the products may have to be discounted, they will sell three at a time rather than one. The loyalty program member will also be more likely to return and replace one element of the bundle when it runs out to still be able to use the products together.
Cut Down on Returns
With the cost of living continuing to rise, customers may be more likely to return their purchases due to a greater sense of regret or “buyer's remorse.” They're also looking for ways to reclaim money that they may otherwise have forgotten about. Brands could use their loyalty programs to limit this behavior by only offering free returns to their top-tier program members. This would dissuade nonmembers from buying and returning items, which would help keep a more realistic view of a store's performance. It would also help to ensure that loyalty program members retain that VIP feeling even when they’re not shopping as often and earning rewards less frequently.
Charlie Casey is CEO and co-founder of LoyaltyLion, a data-driven loyalty and engagement platform that powers ecommerce growth.
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Charlie Casey is CEO and co-founder of LoyaltyLion, a data-driven loyalty and engagement platform that powers ecommerce growth. Proven to increase retention and spend, LoyaltyLion is trusted by thousands of fast-growth ecommerce merchants worldwide. Prior to founding LoyaltyLion, Charlie joined the Foreign and Commonwealth Office as an Economics Advisor before becoming a consultant at Deloitte.