Customer Loyalty: Three Tips for a Better Loyalty Program

Loyalty programs have a straightforward purpose in the customer relationship. A virtual bribe, the loyal program serves to entice the customer to come back to you time and time again, write officials at MarketLive, an e-commerce technology firm, in their recent whitepaper, “Five Keys to Building Customer Loyalty.” Some tips on developing and maintaining a successful online loyalty program shared by the authors:

1. Don’t make enrollment too easy. At first glance free enrollment may seem like the obvious choice. But “customers who sign up for free have invested little, so they don’t stand to lose much if they go elsewhere,” writes MarketLive. While a “pay-to-play” loyalty program presents a barrier to entry for some customers, those who do participate should be of higher long-term value.

2. Beware the overused discount. Continued use of discount-oriented offers tends to attract only price-motivated shoppers, and when a lower price shows up elsewhere, these customers will leave you, the whitepaper’s authors note. In this way, when you overuse discounts, you actually encourage disloyalty, because the customers will come back only when you offer the best price. When you do offer discounts, try tempering the offer with qualifiers such as a preset order value or minimum number of products, the authors suggest.

3. Keep your offers varied. Rewards other than discounts can go a long way to discourage disloyalty. Coupons for future purchases delay the reward and requires the customer to return, MarketLive officials write. Loyalty program members could also be given special access to new or limited edition products. Advance notification of new products or sales events is another good idea.

To get a copy of MarketLive’s whitepaper, “Five Keys to Building Customer Loyalty,” visit http://www.marketlive.com.