Shopify Ecosystem

Top 3 Key Objectives Merchants Want A Loyalty Program To Help Them Achieve

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We surveyed over 400 ecommerce brands that joined the LoyaltyLion platform from the second half of 2020 to the first half of 2021. We wanted to find out the key objectives they are trying to achieve with their loyalty program.

A lot of the objectives were top-level. For some, a loyalty program may seem like another plate to spin, another tool in their kit to get a handle on to meet these challenges. But when we dug deeper and revealed the real pain points of our merchants. 

Competition was top of the list – and it’s not a surprise either. With an estimated 12 million – 24 million ecommerce sites across the entire globe, with more and more being created every single day, cost per acquisition is skyrocketing. This impacts on return on your investment not only because of cost and competition but also data privacy changes that have led to a reduction in conversion rates.

Keep reading for the top three key objectives that are top of mind for merchants when choosing a loyalty platform and what it means for you. Or why not request a call back from one of our Loyalty Consultants to discuss your objectives and pain points in detail.

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1. Retain new customers

Retaining new customers is the number one objective for ecommerce merchants. But, unfortunately, it is also the most difficult objective to achieve. You’re facing tougher competition and this will only increase. To keep competitors at bay and get a true return on investment, making customers loyal is the answer.

This is why merchants are turning to loyalty programs as the go-to strategy, especially if they’re struggling to turn first-time buyers into repeat purchasers and VIP customers. 

A loyalty program allows you to build an emotional connection with your customers and use first-party data to nurture customers through the customer lifecycle with personalized and meaningful interactions.

You also shouldn’t think that deploying a loyalty program will guarantee results you want straight away. Without the right platform provider and features, it’s really easy to create a loyalty program that falls short. As with every new strategy to execute it well you need to give it the attention and love it deserves and continuously improve it. 

If you are new to the loyalty program world, the loyalty partner you select here is crucial to the success of your program. You must benchmark your existing or future loyalty partner on whether they:

  • Have the features that allow you to incorporate your loyalty program into the customer journey, improve customer experience and amplify your brand values and identity
  • Provide you with the necessary service and support to build your loyalty program to your requirements, make it go live as soon as possible with minimum disruptions to your business and help you market your program to drive signups. Our implementation timeline of a loyalty program takes on average 2-3 weeks to go live
  • Fits into your existing tech stack so that improves your user experience and makes it simple to integrate and maintain your loyalty program
  • Continue to work with you to ensure:
    • the continuing success of your loyalty program
    • optimize it to the changing needs of your business
    • and making loyalty at the heart of your marketing that helps you drive consistent ROI from all your existing marketing channels

To have all of the above you need a loyalty provider that purely focuses on loyalty. At LoyaltyLion, we are experts in loyalty and the whole organization is structured and optimized to make sure merchants are successful in turning customers into loyal ones.

2. Reward existing customers

Merchants with or without a loyalty program are taking their customers’ loyalty for granted. Just because they’re repeat purchasers now doesn’t mean they’ll continue to be. Or, if you have an existing loyalty program it doesn’t mean they’ll come back to your store in the future. Especially with copycat competitors appearing every day and enticing customers over with aggressive discounts.

It sounds really simple: customers buy, they get awarded points and they come back to your store and redeem. Sounds simple right? In actual fact, there are layers of complexity to secure success:

  • The right amount of points to award – if you offer too few customers find it hard to achieve rewards, offer too many and it can hit your bottom line. Our onboarding managers will advise you on the right amount of points for your loyalty program based on loyalty best practice and your objectives.
  • Levels of points to redeem a reward or move up a tier – targets too high will demotivate customers, but too low means the gamification experience isn’t good enough and hurts your margins
  • How points are earned – it is quite typical to award points for purchases but your customers interact with you in multiple ways. For example, they follow you on social media, leave reviews, refer friends and family, and complete brand-related interactions. Your loyalty program should be the driving force behind keeping your customers consistently interacting with you
  • Making sure your loyalty program improves customer experience rather than hindering it – we found that our merchants see a loyalty program as a must have to take the customer experience to the next level. Standard off the shelf loyalty programs don’t cut it anymore
  • Keeping loyalty at the front of customers’ minds – in 2021, worldwide, emails sent and received each day is projected to be 319.6 billion emails. Using loyalty data to personalize communications with customers means your emails are more likely to be read and your interactions with your customers are meaningful and relevant

Understanding where the customer is in their journey with your brand, what persona they are, how you configure/customize your loyalty program and executing loyalty-led marketing communications are crucial to successfully rewarding your customers with the right rewards at the right time.

3. Driving lifetime value

This objective is in fact a combination of the number one and two key objectives. What makes it different is the focus on the full lifecycle of the customer journey and connection with your brand.

We have to break this down into personas and how a loyalty-first strategy with clear marketing specific to each persona works to move your customers to the persona you want them to be. 

But remember,  buying motivations and brand preference do change. Seasonality also affects the tactics you use to interact with your customers. Being loyalty-first means using first-party data to make sure your interactions with your customers are personalized and meaningful.

At LoyaltyLion through best practice content, ongoing training, using our advanced features and a dedicated customer success team, we help our merchants move their shoppers through the customer journey based on nine personas:

  • Browser – a shopper that is browsing your store but has no intention to buy from you
  • New member – a shopper who has created an account and you have captured their email for marketing purposes
  • Hesitant buyer – a shopper who has items in their shopping cart but has abandoned it 
  • First time buyer – a shopper who’s bought from you for the first time but is not loyal and there is no motivation to buy from you again
  • Repeat purchaser – a shopper who buys from you regularly but isn’t loyal to your brand and is prone to your competitors’ marketing tactics
  • VIP – a shopper who is loyal to your brand and has a high average order value
  • Impulse buyer – a shopper who buys due to what’s trending on social media, big marketing activities, events and influencers. They are not loyal to you and will move on to the next big brand  or trend very quickly
  • Discount chaser – a shopper who only buys when you have a big sale or during discount periods of the year, for example Black Friday
  • Lapsed customer – a shopper who bought from you previously but haven’t bought for a long time and are not engaging with your marketing efforts

A customer’s lifecycle can move between personas very easily. Take a Lapsed customer for example, through loyalty marketing tactics such as a “Welcome Back” campaign – where you remind them of points or rewards they’ve built up that will expire – they can easily become a Repeat purchaser and engage with you more actively. Once they are a Repeat Purchaser, you can use loyalty marketing tactics to move them into the VIP persona and deploy tactics there to keep them loyal to you.

This cycle continues and the different tactics to move customers back and forth between personas is your opportunity to have loyalty-led strategies in place that manage the customer lifecycle. The best part is, a lot of these strategies can be set up and automated with out of the box features such as loyalty emails within our platform, and integrating with Email Service Providers.

Your key objectives will differ and are dependent on your business, products, and the customers you have. How you are successful in achieving them is dependent on whether your strategies are loyalty-first and whether they’re achieving the right objectives. 

Speak to a Loyalty Consultant today and see how you can put loyalty at the heart of your tactics and strategies to achieve your key objectives.

About the author

Thuan Bui

Thuan is a Product Marketing Manager at LoyaltyLion. He has worked for global brands leading and executing product management, product marketing, service marketing and portfolio marketing strategies across both B2B and B2C markets. At LoyaltyLion, Thuan manages our product marketing strategy, to make sure our readers are kept informed and learn to get the best out of our new and existing platform capabilities.

Special thanks to our friends at LoyaltyLion for their insights on this topic.
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