Jan 31, 2023
ineCommerce Expert Workshop
Optimize with 12 Loyalty Program Examples
When are loyalty programs useful and when are they not? Discover the key factors and how you can use a loyalty app to meet your goals.
Loyalty Programs are awesome that's why they’re everywhere! Are they worth it? Are they a good fit for your business? Let’s find out.
To be clear, this article is concerned about eCommerce loyalty programs as a business solution. Loyalty programs are marketing tools used by merchants, which typically come with a variety of different features centered around rewards and tiers. We’ve covered what loyalty programs are and how to set them up in this article.
Loyalty Programs are a lot like trying on a pair of jeans; you want style, comfort and durability. But depending on the occasion, you may also have your expectations. We need to think about when we would be using our Loyalty Program, or their “fit” for our business. Below you will find 12 cases where loyalty programs proved to be a meaningful choice.
Cases where Loyalty Programs made a difference:
1. Countering Economic Slowdown:
Whenever we encounter an economic downturn; certain expenses become luxuries. As a strong alternative to paid marketing and with additional retaining power, we have loyalty programs. We see companies wisely focusing on engaging free organic traffic and repeat customers when budgets tighten. Loyalty programs can be used in a variety of ways and depending on your financial outlook, you may need to keep the conversions coming while keeping costs tight. Check out this article about personalization for some statistics and personalization tips.
2. Long Term Low Cost Strategy:
We have a case study that dwells into the marvelous Queen B’s effort to build a sustainable brand with high material costs. From day one this company wanted to maintain low marketing costs and used Growave’s Loyalty Program as a central part of their strategy. They benefited in a big way, having already accumulated hundreds of reviews. This boosted their discoverability through SEO and cultivated resilient trust for the brand. Queen B used loyalty rewards as a means of encouraging reviews on her site and this turned out to be a massive success. The shear positivity is very clearly seen by all potential customers. Queen B’s work was definitely worthwhile!
3. Building Brand Recognition:
Just like you would expect, your customer list grows quicker with a loyalty program. We have an example of a business that showed some serious growth. Josua Lloyd, has collected thousands of reviews and is now one of the largest LGTBQ+ brands in all of Europe. They used amazing rewards and awesome tiers to support their cause and it paid off! They also used rewards to motivate reviews and judging by just how much people love the brand we can say they are a trusted brand. This is a perfect example of how slowly but surely you can also build a stellar reputation with loyalty rewards.
4. Amplify Paid Ads:
Businesses come in all different sizes, and more advanced companies use loyalty rewards in combination with PPC advertising to boost their effectiveness. PPC drives a great deal of traffic to your business but often has low conversion rates. As a part of the puzzle; loyalty programs help convert leads and expand your member list. Consider how these two marketing tools work synergistically to produce key elements in eCommerce; lead generation and conversion.
5. New Business - First App:
Scaling a business organically is a mess in its own respect, it requires a lot of work and we don't always see the sort of results we want immediately. We encourage merchants to use loyalty programs as a way of improving store discoverability and conversion potential. Besides improving typical ecommerce metrics like average order value and lifetime value of customers, loyalty programs provide the ability to implement a variety of different marketing objectives. Inaction is a major threat to new businesses, with loyalty apps being a dynamic solution. This is particularly useful at early stages of a business because it introduces unknown versatility to your store while also helping manage cash flow issues. It’s worth noting how reviews (a loyalty app feature) can help improve your SEO ranking.
6. COVID Counter:
Black swan events like the pandemic had people swarming online. Most stakeholders were entirely unsure what sort of eventual effect we would see on the global economy. Most managers saw a short term solution, “plug the hole”, eCommerce was that filler. Due to lockdown measures, we saw a surge in online traffic which was a unique opportunity. A major objective at the time for most merchants, was extending the value of these new visitors in any way possible. Retention of customers became a primary objective and changed the way we looked at ecommerce as a long-term solution. Loyalty programs were widely considered a first option for optimizing the overall shopping experience and increasing performance metrics like AOV and LTV.
7. PPC Substitute:
Pay Per Click advertising and other paid mediums are criticized as being expensive and often non-constructive. What do we mean by non-constructive? PPC is for the most part, pure lead gen. When diverting our budget towards lead generation, we divert investment away from other strategic elements of our business. This opportunity cost produces leads but no real long-term value; many consider this a sort of “superficial” traffic. As an alternative to PPC we saw a lot of merchants use loyalty programs to create drawing power with increasingly rewarding discounts. The merits are clear, as a recommended alternative, we see a more sustainable and constructive approach. While PPC still remains a powerful tool in driving traffic, many businesses might choose to disregard them until the timing is right.
8. Reclaiming Older Customers:
We have seen numerous examples of businesses that had been in operation for several years and had customers that had been effectively ignored. It wasn’t until they realized how many customers they’ve let loose, that they decided to reclaim that hidden value. They didn’t know just how many customers were open to the idea of a loyalty program. A strong loyalty app provides an active connection to customers and a means of reaching out to them. You will find loyalty apps like Growave, equipped with automated emails and other features that ideal for building a meaningful relationship.
9. Lack of Control:
A common narrative we see amongst new loyalty app installs, is dissatisfaction with the lack of control they had prior to installation. Many merchants take executive action after they realize how they have no real control over their promotional campaigns or user activity in their eCommerce stores. Whenever they had an idea or a seasonal sale, they lacked a means of implementing the sale. The introduction of loyalty & rewards provided them with a set of tools that would actively work towards their objectives. Modern loyalty programs offer a variety of tools that can take a passive site and turn it into a dynamic conversion machine.
10. Perfect Fit:
Viability of loyalty programs is ultimately what decides their utility, and it stands to reason that not all business models fit the criteria. Many successful loyalty programs are flourishing just because of a perfect fit. While there are generally many ways a loyalty program can be used in ecommerce a truly successful loyalty program boils down to how well your store matches the merits of loyalty programs. Check out the working angles in loyalty programs with this article.
11. Saved Time & Resources:
It’s worth mentioning that not all loyalty apps are the same, thus further suggesting that their utility may be more or less of a struggle. We can expect our work to increase if we are using several apps at the same time and that synchronized efforts are nearly impossible. Having a broader app that provides several features can help us alleviate our workload and provide greater value. Besides the many other issues that may arise, carefully considering the merits of individual loyalty programs is important.
12. This Enterprise Level Business:
Depending on the size of your business, your needs may be very different. Enterprise level organizations are a perfect example of such variations. A very common request seen by larger businesses is access to an API function and dedicated customer support. Navigating the app market is about the needs of the merchant and their type of services providers offer. Major brands required dedicated assistance and this is something to keep a keen eye out for.
*Bonus: Loyalty Tips
- Double Referral Rewards
- Persistent Carts and Sharing
- Automated Emails
- Rewarding Reviews
- Insight from Data
- Mixed Strategy/ Testing Strategies
By the end of this article you should have an idea of when a Loyalty program may be useful for your business and an idea of their viability depending on your situation. We also have alternative articles that go into details on Loyalty Programs in case you need a little more convincing.
Book a Demo Call
Growave for Shopify
More Articles in Category
Articles About Growave
Feb 21, 2023
Jan 31, 2023
Jan 17, 2023
Mar 28, 2022
Mar 25, 2019
Jul 29, 2022
Mar 25, 2022
Mar 25, 2022
Jun 28, 2022