Customer loyalty programs have been a staple of merchant marketing efforts for quite a while. But now merchants are finding that they need to go beyond simply offering a plain vanilla version, as the following Forbes article explains.
It is well-understood that acquiring a new customer can be significantly more expensive than keeping an existing one. For instance, recent research by Monetate found that an e-commerce customer who has had one previous shopping experience with a company is over three times more likely to convert again versus a brand new visitor, and customers who have bought multiple times are over five times as likely to convert again. It stands to reason then that customer loyalty programs can be incredibly valuable to any organization with repeat customers.
Loyalty programs are effective at retaining customers by preventing them from turning to the competition. These programs can also maximize the lifetime value of a customer by offering incentives to spend more and buy more often.
Successful customer loyalty programs are win-wins for brands and consumers. They bring additional recurring revenue to the company and make customers happy with perks and rewards. All this adds up to a better customer experience, which can bring better returns.
Online shopping and mobile commerce have changed the game for merchants looking to attract and keep customers. Consumers are now hybrid shoppers that browse in a store and then buy online, or vice versa. They need additional features and incentives to keep them coming back. For example, Nordstrom’s new Nordy Club offers access to special events, workshops, and services such as curbside pickup. Not to be left out, quick service and fast casual restaurants are especially active in the loyalty game. Starbucks’ mobile app’s integrated features use customer convenience and immediacy to increase repeat business. Merchant loyalty will increasingly be a differentiating factor for merchants, and Mercator will continue its coverage of this topic on its 2019 research agenda.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group