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5 Mistakes Ecommerce Stores Make With Their Rewards Programs


5 Mistakes Ecommerce Stores Make With Their Rewards Programs

Loyalty might best be described as a snowflake…

Extremely fragile and difficult to hold onto and maintain.

In other words, it’s really easy to mess up a rewards program- especially one that is tailored to individuals and rewards consumers based on behaviors the company offering the program deems valuable.

The difficulty with loyalty today is that everyone is trying to earn it, which makes actually doing so increasingly tough. In fact, creating and maintaining a program that not only stands out but also engages an audience in ways that generate a return is relatively rare.

Here’s a dirty little secret…

Today’s rewards program membership boom- enrollment in loyalty programs has increased 26-percent to 3.3 billion people- isn’t as big as it seems on the surface. While enrollment may be on the rise, participant engagement is unfortunately headed the other direction:

Consider too that people are increasingly disloyal when it comes to loyalty programs. The Bond Loyalty Report, which surveyed 11,000 U.S. consumers, found that 44-percent believe it’s easy to replace a particular rewards program with one offered by a competitor.

So how do you make your loyalty program stand out and outperform?

You can start by avoiding the five common mistakes ecommerce merchants often make with their rewards programs:

Mistake #1: Allowing Your Once Fresh Rewards Program To Stagnate & Bore

If variety is really the spice of life it also doubles as a key factor in ensuring the long term success of your rewards program.

You’re already likely rewarding customers for sales, referrals, and other behaviors you deem valuable. However, loyalty programs can get stale quickly when they are static which is why rewards programs that are successful over the long term routinely add some variety or even surprise consumers by offering new ways to earn rewards.

Need some inspiration?

Here’s one way Hilton Honors keeps its rewards program dynamic and exciting- offering customers double points for reservations made between certain dates:

Image via Boarding Area

Or consider incentivizing customers to do something that can result in a 4.6% lift in conversion rates; offering rewards for leaving a product review. Doing so can result in ecommerce gold when you consider that research suggests more than two thirds of Americans seek out opinions from others before purchasing.

PRO TIP: Consider leveraging Yotpo- a tool we featured here that helps ecommerce merchants manage, display, and earn additional product reviews. You can even use Yotpo to turn the user generated content (UGC) you earn from offering rewards into Facebook ads and better market your offerings:

Screen Shot 2017-03-01 at 4.01.23 PM Image via Yotpo

Ward off loyalty program stagnation by ensuring customers are excited about new opportunities to earn rewards- it’s one mistake you’ll definitely be rewarded for avoiding.

Mistake #2: Cutting Corners With A One-Size-Fits-All Plug In Rewards Program

Loyalty shouldn’t be an afterthought…

However, ecommerce merchants often treat it like one by designing and developing their sites without rewards in mind.

A robust loyalty program isn’t something you can simply sprinkle on at the end.

In other words, a plug-in rewards program isn’t one that is likely to inspire customer engagement and help you leverage loyalty to accelerate growth and achieve your business objectives.

Want to to know what a plug-in rewards program will do?

It’ll stick out like a sore thumb and ruin the customer experience in ways that can negatively impact the brand you’ve spent so much time and treasure building. In fact, lazily plugging in a rewards program that isn’t deeply integrated with the rest of your site likely won’t appear consistent with your brand and will communicate to customers that the program isn’t something you value.

If it’s not important to you why would it be important to customers?

The solution is to seamlessly blend your loyalty program with your ecommerce store and weave it throughout the customer experience so it’s synonymous with your brand. One way to achieve this is by including a dedicated page to house your rewards program just like Kopari, an online seller of coconut based beauty products, does:

Screen Shot 2017-03-01 at 4.03.17 PM Image via Kopari

Notice the two highlighted areas on Kopari’s rewards page:

  • The rewards page is included in the top navigation menu which communicates to customers it is just as important as any other page on the site
  • Following its value proposition, the Kopari rewards page has a strong call to action that excites and motivates customers to join a larger and exclusive  V.I.P group of special customers

Your customers will see right through a plug-in program tacked onto your site as an afterthought- it’ll get noticed but for all the wrong reasons.

Instead, excite your customers and increase the odds they are actively engaged in your rewards program by illustrating the program is equally important to you by creating a page in the image and likeness of the rest of your brand.

Mistake #3: Oh, You Offer Rewards? The Invisible Loyalty Program

Don’t hide your loyalty program from the world…

That tab at the top of your page is a great start- rewards programs deserve a sport in your menu- but it’s just the beginning when designing a loyalty program that is deeply integrated and intertwined throughout the customer journey.

Stop thinking about rewards as a one-stop-shop; something you touch on once and forget about on the rest of your site’s pages. Unless you’re intentionally hiding your rewards program for some reason, tangibly show customers signs you actually want to reward them.

In other words, embed components of your rewards program throughout your site.

We’re talking about:

  • Showing customers their points balance on products pages
  • Embedded referral links customers can use to influence friends & earn rewards
  • Customer account pages that illustrate points balances, how to earn more, and how to redeem them
  • Rewards that are integrated with the checkout so customers can easily redeem their points when trying to make a purchase

For example, look how easy Kopari makes it to redeem points at the checkout- notice the drop down box that empowers customers by allowing them to choose the size of the discount they’d like to apply:

Screen Shot 2017-03-01 at 4.04.56 PM Image via Only Growth

Remember, consumers are only active in about half of the rewards programs that they are enrolled in. Unless you weave pieces of your program throughout your site, customers may not even be aware your fantastic program exists.

Mistake #4: Not Integrating Your Rewards Program With Intelligent Email Marketing

Your customers expect more from you than they ever have in the past…

They know you’re collecting data on them and guess what- they expect you to use it to offer a richer and more valuable customer experience. In fact, research suggests nearly three-quarters of consumers prefer to do business with brands that personalize their shopping experiences.

One extremely effective way to do this is with behavioral triggered rewards email.

Transactional emails- those that are automatically triggered based on a specific customer action- can include emails such as:

  • Triggered email that provides customers with a coupon code they’ve earned
  • Thank you emails that are automatically sent when a customer refers a friend

Or, consider using transactional emails that are automatically sent to dormant customers who haven’t made a purchase in a certain number of days that remind them they have a points balance that may be redeemed for valuable discounts:

Screen Shot 2017-03-01 at 4.06.50 PM Image via Swell Rewards

NOTE: Swell Rewards, which creatively uses incentives to help ecommerce merchants attract, engage, and retain customers, now allows merchants to send loyalty related emails directly through their Email Service Provider (ESP). For example, Swell Rewards now integrates with Klaviyo, an ESP, so merchants can more easily send program related automated emails based on loyalty triggers that are important to the merchant.  

How might this add value?

When merchants combine loyalty program data with the information they already have on specific customer segments, merchants can further refine their segments and offer an even greater level of email personalization based on a loyalty program enrollee’s behavior.

Robust loyalty programs leverage the power of email marketing to drive engagement and results that personalize the customer experience to a greater degree while simultaneously lifting sales for the merchant willing to invest in transactional rewards-focused email.

Mistake #5: You Call This A Reward? Not Offering What Your Audience Values

Loyalty is a two way street…

The rewards a merchant offers must incentivized desired behavior that helps merchants achieve business objectives but must also be perceived by customers as extremely valuable. One way to strike the right balance is through split testing your rewards program just as you might a landing page, PPC advertisement, or product discount.

Consider A/B split testing:

  • Reward type (points vs. discounts)
  • Reward size (based on the value of the behavior)
  • Reward types designed to inspire referrals

You might also split test your loyalty program copy- like the CTAs you employ to drive referrals- as Airbnb recently did:

Screen Shot 2017-03-01 at 4.08.16 PM Image via Airbnb Nerds

Identifying exactly how your customers want to be rewarded- and making it easy to earn and redeem points- is something Cairn, which uses Swell Rewards to power its loyalty program, does to drive engagement:

Screen Shot 2017-03-01 at 4.09.36 PM Image via Cairn

Offering the right reward, in the right quantity, and at the right time can inspire customers to actively participate in your loyalty program and drive growth.

Reward Yourself By Avoiding Mistakes

Earning loyalty is difficult enough….

Don’t make it even more challenging by making these five mistakes ecommerce stores make:

  • Allowing your rewards program to stagnate or become stale
  • Trying to plug-in a rewards program rather than seamlessly integrating one into your site
  • Not creating a separate rewards page and including it in your navigation menu
  • Failing to integrate rewards with your transactional email marketing efforts
  • Offering rewards that your target audience doesn’t want or perceive as valuable

Steering clear of these pitfalls will reward both customers and merchants in ways both deem valuable and lay a foundation for long term customer-brand relationships.

Nikhil Naidu

Nikhil Naidu

Growth Marketer at Swell


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