NFIB

Customer Loyalty Programs for Your E-commerce Web Site
04/ 15/ 2002

Airlines have them. Car rental and hotel chains have them. And many large retailers have them. We're talking about customer loyalty programs -- one of the best ways to reward your steady customers and keep them coming back. Today's Workshop, by Jeffrey Moses, shows why these programs can be invaluable for your e-commerce Web site.

The purpose of customer loyalty programs is to reward customers for frequent purchases, and thereby encourage them to keep shopping with you rather than shifting to the competition. An e-commerce Web site can use a wide variety of ways to create customer loyalty programs for steady customers and can emulate programs that have been successful for both online and offline businesses. Frequent flier airline miles are an excellent example. Once customers begin building up frequent flier miles with an airline, they'll go out of their way to schedule flights with that particular airline -- even if the timing of the flight isn't quite as convenient as that offered by another airline.

The idea behind a customer loyalty program is to give an ongoing reason for your best customers to keep returning to your site. The perfect example is offering your most steady customers a discount that can be applied to all purchases within a specific time frame, usually a year or two. Customers may have to purchase an initial amount to obtain this ongoing discount, but after that, the discount applies to everything they purchase. When someone knows they're going to get an additional 20% off on everything that they buy from you, they'll look to you first.

For top-of-the-line customer loyalty programs, your site may want to tie in with a larger organization. A relationship can be set up with an airline or several airlines, for example, offering frequent flier miles or hotel stays for all purchases.

The type of customer loyalty program you use may depend on what your site offers. If you have a sports-related site, for example, you could offer points toward free game tickets or rare, high-priced baseball, football, basketball or hockey cards. The more a customer buys, the more points he or she accumulates. The same idea works for almost any e-commerce site (offering points toward items sold by or relating to the site): gardening sites, florists, art supplies, books/CDs, electronic equipment, etc.

I'm sure almost every reader of today's Workshop can give personal examples of ongoing customer loyalty programs that keep them coming back. It may be the Books-a-Million 10% discount card, www.sportsline.com's offer to win free memorabilia by accumulating points by purchasing, or even your local grocery store's discount card that allows you to save money every time you shop. The point is, everyone likes to be recognized as a "preferred" customer, and to be rewarded for their loyalty.

One of the cardinal rules of marketing is: "It's easier and less expensive to keep an existing customer than it is to create a new one." Providing customer loyalty programs through your site is one of the best ways to show your steady customers that you value their business.

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