Customer loyalty advantages: How a loyalty program could help you solve your day-to-day ecommerce challenges

The list of challenges ecommerce merchants face continues to grow as consumers become more discerning and less loyal in equal part. From basket abandonment to turning browsers into buyers, you might be surprised how a loyalty program benefits many of your day-to-day challenges. In this post, we will look at the following challenges:

  • I have too much inventory
  • Shipping costs are making my customers abandon their baskets
  • Shoppers are checking out as guests
  • Too many of my customers are just browsing
  • I’m caught in a race to the bottom

I have too much inventory

Surplus inventory is a common problem, but it can also be a costly one for ecommerce merchants. If you’ve got products that aren’t flying off the shelves, consider how your loyalty program could support your inventory reduction strategy.

Rather than being forced into discounting and giveaways to shift stock, encourage people towards particular purchases with double points or bonus point offers. This allows you to direct customers towards particular products and push slow moving items without impacting your bottom line.

Shipping costs are making my customers abandon their baskets

Studies consistently show that one of the most common reasons for basket abandonment is shipping costs. Customers are willing to pay a certain price for a product, but the additional delivery cost on top proves to be too much for them. However, as Amazon have demonstrated with their Prime membership, shoppers are willing to become part of a loyalty program – and even pay for it –  if it offers them faster or cheaper delivery as one of the loyalty program benefits.

Whether it’s offering next day delivery to members at a discounted rate, or offering certain membership tiers entirely free delivery, we recommend including shipping options as part of your reward structure. You can find more tips on limiting basket abandonment, here in our LoyaltyLion Academy.

Shoppers are checking out as guests

For many shoppers, checking out as a guest is the most appealing option – it’s faster and it doesn’t involve sharing as much personal information. However, each time this happens you’re missing an opportunity to collect data and build long-term relationships with customers. Incentivizing shoppers to register at the checkout motivates them to take the time to set up an account.

We recommend offering rewards for both setting up an account and for the first purchase, so that members see instant gratification and return to make their next purchase sooner. If you don’t manage to catch them at the checkout? It’s not too late – send them an email and let them know that there are points waiting for them if they return and set up an account.

Too many of my customers are just browsing

Turning browsers into buyers is a problem for all ecommerce merchants. After all, there’s no store assistant to offer advice or encourage a sale. However, research shows that 84% of customers trust online reviews as much as a personal recommendation.

Encourage your existing members to leave a review for either your products or your store by incentivizing them with points and rewards. When browsers visit your store, they’ll see user generated content and have the social proof they need to convert.

Shoppers are also four times more likely to make a purchase when they are referred by a friend. Incentivize existing members to refer friends by offering them rewards if they do so. As a result, visitors to your site will be more qualified, and more likely to be buying rather than browsing.

I’m caught in a race to the bottom

As competition increases and it becomes quicker and easier for customers to compare different brands, price sensitivity becomes more of an issue for retailers. For many ecommerce merchants discounting is a necessary evil, required to help win against the competition.

If you’re caught in a race to the bottom, use your loyalty program to win round even the most price sensitive of consumers. Make your points structure works in a way that allows customers to earn and redeem points within a reasonable timeframe so that they are seeing immediate gains for their spend.

You also need to ensure that your points and rewards structure is clearly communicated so that prospective members can immediately see the value of joining the program and becoming loyal rather than shopping around for the cheapest price.

 

If you’d like to find out more about how a loyalty program benefits your everyday ecommerce challenges, get in touch and one of the LoyaltyLion team will be happy to help!

 

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