Shopify Plus Meetup London: Everything you may have missed at Loyalty Unlocked with LoyaltyLion, Swanky and Ometria

Loyalty Unlocked

Last Thursday, we joined our partners Swanky, Ometria and Shopify Plus for Loyalty Unlocked. The latest Shopify Meetup focusing on something we know a thing or two about – Loyalty.

Our Head of Marketing, Fiona joined Dan from Swanky, Tim from Shopify Plus and James from Ometria, to discuss the benefits, challenges and misconceptions around loyalty programs. Using real-life ecommerce store examples and a live Q&A from the merchants in the audience, the panel covered loyalty strategy from all angles, including branding, design, ESP integrations and more.

Now, let’s dive into the questions our loyalty experts were asked…

What are the challenges that retailers often face when trying to create an effective loyalty strategy?

Several of the panelists agreed that one of the biggest challenges retailers face is data. Understanding and using it effectively is often a pain point. Many are overwhelmed by data and think of it as complex and only for those who can afford to hire analysts.

In reality, the data around loyalty is simple. Look at your analytics and decide what metrics you want to track, for example, AOV or repeat purchase rate. Monitor the data alongside your loyalty program to identify changes in trends and associate these to campaigns or changes you have implemented.  Over time, it will get easier to see the effectiveness of your loyalty program and optimise the data for future campaigns.

Another challenge often faced is the stigma that loyalty programs are only for bigger brands, like Tesco or Boots. This is a misconception, there is no company too big or small to start a loyalty program. Loyalty programs are about creating a positive customer experience, portraying your brand’s values, building brand advocates who eventually will refer their friends and family to your store.

The archetypal loyalty programs of the past have been very difficult to join, lack customer support or offer unexciting/un-achievable rewards. This is damaging to loyalty’s reputation, making customers less inclined to join. But, you can combat this by making your rewards and perks clear and exiting so that customers will know it’s worth signing up.

Why should retailers invest in a loyalty program?

It’s no secret that retention costs five times less than acquisition. Paid acquisition is very costly and ends with few conversions. A loyalty program is a cost-effective strategy that is proven to drive repeat purchases and loyal customers.

The Likelihood Of Repeat Purchases
 

James, co-founder of Ometria, took us through his research into the likelihood of repeat purchases, proving that the chances of someone making a repeat purchase increases with every order. Driving these purchases will impact revenue overall, so worth starting as early as you can.

If you are still unsure why, try looking at your repeat purchase rate and customer lifetime value (CLTV) forecast to see if they are in line and creating enough revenue. If not, it is likely time for your company to look at a loyalty solution.

What are some of the biggest misconceptions when it comes to loyalty programs?

Some say that loyalty programs are difficult to install. This is false. Loyalty programs don’t have to take years to set up. They can be ready in anything from three minutes to three months depending on the complexity. It is important to get started and experimenting right away.

Another misconception is that they are expensive to run due to rewards and discounts. But in reality, you can off-set the costs very quickly by driving higher basket values and offering experiential rewards instead of discounts. As well as this, a little effort can equal a lot of loyalty. Sometimes a simple thank you is enough to create an emotional connection that will bring a customer back.

Some people also think it is difficult to connect their online and offline stores in a loyalty program. However, with platforms like Shopify Flow and Shopify POS you can seamlessly connect your loyalty program between all stores, on or offline.

What are the most common mistakes?

A common mistake is when merchants leave their programs on “set and forget”. You need to continue to update your loyalty strategy over time, tailoring the program and rewards to specific segments of customers. For example, based on how many times they have bought from you or how long it has been since their last purchase. This will ensure that every customer experience is relevant and personalised.

Finally, Fiona mentioned one of the most commonly forgotten mistakes, merchants forgetting to link their loyalty program with their other marketing efforts such as social media and emails. Use your loyalty program as another reason to communicate with your customers via email. Use your loyalty program to incentivise social engagement when trying to boost your following. The list of possibilities is endless.

What metrics should retailers be reviewing to measure success?

Everyone agreed that retailers must review customer lifetime value and the metrics that contribute to it, for example, repeat purchase rate, average order value and conversion rate. With a loyalty program, you should see all of these metrics improve.

Other metrics that could be considered as success metrics were net promoter score (how likely customers are to promote your brand), reward redemption rates, the number of accounts being created, and how many customers are at-risk or being reactivated.

Loyalty Across Customer Lifecycle

How do you know your business is ready to start prioritising retention?

Across the board, each expert said it is never too early to start prioritising retention. As long as your store is launched, and you have customers, there are customers who can become repeat purchasers and advocates. And, it is easier to entice customers to repeat purchase than it is to get them to purchase for the first time. Start prioritising retention as soon as you can, otherwise you are potentially wasting money losing first-time shoppers who never return.

As Tim, Solutions Engineer at Shopify Plus, said:

“If you’re selling a repeat service or repeat product, then loyalty is a no-brainer.”

Start simple on day one and build the program out as you gain members, and insights into what they want and what works. Also, remember to keep your program name, rewards, tiers, etc. in line with your brand values.

If you’re still not sure when to look at investing in customer loyalty, look for some “red flags”, as Fiona, Head of Marketing for LoyaltyLion put it:

“If you find you have a lot of at-risk customers, high customer churn, or a lot of customers moving to competitors, then it is also a suitable time to start looking for a loyalty solution.”

Case studies

After the panel, the team showcased two client success stories.

LoyaltyLion and Swanky presented Pulse Boutique, an online fashion brand. To read more about the case study, read LoyaltyLion’s story here, and Swanky’s here.

Ometria took a look at Emma Bridgewater, a homeware retailer. To read more about the case study, see Ometria’s full report here.

Key takeaways

  • It’s never too early to start thinking about retention – it is five times cheaper than acquisition
  • Data surrounding loyalty is easy to crack and should be your starting point when running campaigns
  • Loyalty is not just for retail giants
  • Use tools such as Shopify Flow to ensure your loyalty program is seamlessly connected between online and offline and make sure you’re using it alongside your other marketing efforts
  • Key metrics for measuring success are customer lifetime value, average order value, conversion rate, repeat purchase rate, reward redemption rate, the number of accounts created and how many customers are at-risk or being reactivated
  • Use success metrics to evaluate how your loyalty program is performing over time

A huge thank you

And, there we have another Shopify meetup over for the year. Thanks to everyone who attended the evening. And, thanks to Swanky, Ometria and Shopify Plus for partnering with us on this event. We’re looking forward already to the next one!

If you’re interested in learning more about loyalty programs, take a look at our recent ebook with Swanky, Loyalty Programs for Shopify Plus: The ultimate guide to customer retention.

Team LoyaltyLion

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