5 Ways Social Media Improves Ecommerce Loyalty Programs

We could talk all day about the differences between new customers and repeat customers, but really you only need to know two things:

  • It costs 5x more to attract a new customer than to retain an old one. [Source]
  • Repeat customers spend 67% more than new customers. [Source]

The data doesn’t lie. What’s best for your online store is retaining your current customers and putting a system in place that turns new customers into old ones. The best way to achieve both, it seems, is using loyalty programs — special deals stores give to repeat customers to improve their loyalty.

But it’s not enough to just have loyalty programs. You must promote them, nurture them and fine-tune them based on their reception. For loyalty programs to work, you have to get to know the community that uses them. What better way to do that than by using social media?

Below, we outline 5 ways to improve your loyalty programs with social media. But first, let’s talk a little about the nature of loyalty programs: the most effective ones and who they benefit.

 

Ecommerce Loyalty Programs: What They Are

The definition of ecommerce loyalty programs is pretty loose, encompassing any kind of deal given to repeat customers. These could be stamp cards that are popular with the food industry, or a special coupon code exclusive to those who sign up for the email newsletter. It doesn’t always have to be a discount, either — it could be access to exclusive products, early access, free merchandise, or other rewards like frequent flyer miles.

Most ecommerce experts agree on six types of loyalty programs:

  1. Point Programs — Customers acquire points for each new purchase and can exchange the points for discounts and special deals.
  2. Tiered Programs— A progression of the point programs, tiered programs create different levels of loyalty (i.e., “Gold Member,” “Silver Member,” etc.), usually based on how many points they have. Getting to the next tier adds incentive for more purchases.
  3. Spend Programs — Spend programs are just a different approach to a points system. Rather than earning points through new purchases, customers earn points based on how much they spend, adding extra incentive for larger orders.
  4. Paid Programs —Rather than accruing points, a customer simply buys their way into a special membership. By paying a monthly fee or flat-rate upfront, the customer can access exclusive deals.
  5. Value-based Programs — Typical for ethically conscious brands or brands partner with charities, value-based programs take action when customers spend a certain amount. For example, “for every $10 you spend, we donate $1 to Toys for Tots.”
  6. Game Programs — For brands looking to improve engagement with their customers, a game program rewards users who spend time with an affiliated game or app with commensurate value points.

Keep in mind that these six types of loyalty programs are not mutually exclusive and can be combined any way you see fit. These are just the primary colors, but you’re free to blend them together as you wish.

Of course, you also want to match your type of loyalty program to your customer demographic. Loyalty programs in general benefit brands that…

  • … have fierce competition and need to offer their customers something extra.
  • … target “bargain hunters” and other price-conscious consumer groups.

Loyalty programs also work best if you sell products that can be bought regularly. In other words, they don’t work well for companies like car dealerships, where customers only buy once in a blue moon.

That should be enough to get you started, or at least inspire your next brilliant loyalty campaign. But how do you promote your loyalty program once it’s ready? Then, it’s time to hit social media.

 

5 Ways Social Media Improves Ecommerce Loyalty Programs

 

1. Advertise Loyalty Program Advantages to New Customers

Loyalty programs may be designed for customer retention, but that doesn’t mean they’re onlyfor customer retention. They can be just as attractive to new customers as a way to show that you care about your shoppers. If someone new sees that they could benefit from exclusive deals in the future, they’re more likely to make the first purchase with you.

That’s why you should promote your loyalty programs on social media, no matter who your followers are. If enough people see how well you value repeat customers, it’ll help your reputation for everyone.

 

2. Use Hashtags

The social media landscape is vast and confusing, making it easy to get lost. Using hashtags is the key to getting your posts in the right people’s feeds.

Do some research beforehand to see which hashtags your target shoppers use (and while you’re at it, see which kinds of posts they like and interact with most). You can also use hashtags to break into new markets, or at least explore their interest.

For loyalty programs, you may even find hashtags specifically for bargain hunters and price comparison shoppers, the exact kinds of people who seek loyalty programs.

 

3. Run an Online Contest

Instead of rewarding customers who shop at your store, you reward customers who help you on social media by running a contest.

Basically, you offer prizes to people who share social media posts involving your brand — photographs with your logo in them, or even just people using your products. You can reward everyone who participates, or do a more traditional contest with a few select, top-prize winners. Don’t forget to establish a hashtag to help organize and promote your contest.

 

4. Find a Partner

Discounts and free gifts are a big part of loyalty programs — those exclusive deals are why people sign up in the first place. But what’s the point if you end up losing more money than you gain?

Consider partnering with another company so you can get a deal on what you’re giving away. Not only do you mitigate potential losses, but you can leverage your partner’s market for new customers.

5. Offer Incentives for Sharing

Think of how much affiliate marketing has boosted ecommerce sales. Use an equivalent strategy and try to incentivize sharing. Again, this strategy isn’t for everyone, but it will boost your social media if it’s lagging.

This strategy is essentially offering deals and discounts to people for interacting with you on social media, not actually buying anything. Think of it like a loyalty program for followers instead of customers. For example, you may offer an exclusive coupon code when a customer first joins your Facebook page, and then give them the chance to receive more discounts if they share a certain number of your Facebook posts in the future.

 

“A Bird in the Hand Is Worth Two in the Bush”

The new customer versus old customer debate brings to mind the old adage, “a bird in the hand is worth two in the bush.” That’s old-fashioned wisdom our ancestors discovered even without the sales analytics we have now. Although it may be cliché, its truth still rings true — don’t abandon your current customers in hopes of attracting new ones. Your current customers are far more valuable, in every sense. Not only is it cost-efficient, but repeat customers also tend to spend more. Loyalty programs allow you to offer value to your current customers, while possibly reaping the benefits of word-of-mouth marketing.

 

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