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The world of e-commerce is highly competitive. You should therefore do everything you can to get customer retention to the highest possible level. The loyalty program helps with this.
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You hope that your customers will become loyal to your brand and will be so happy to convince their friends to buy from your company. Free marketing, it couldn't be better.
In loyalty programs, also known as customer retention programs, you give rewards, discounts, and other special offers to your customers based on their purchases to entice them to make additional purchases.
People who've already bought from you know your brand and hopefully trust you so they're already more receptive to your messages. Chances are, you've spent a lot of time and money convincing them to make that first purchase, and continuing to encourage them with a loyalty program will ultimately help you get more out of these efforts.
Loyalty programs offer your customers added value, and to give them an extra incentive to keep shopping with you, it's important that they also clearly feel, understand that they are benefiting and useful (in addition to offering you great products and customer service, of course).
It should also be relatively easy or fun for them to earn and collect rewards - otherwise they may lose interest.
Customer Loyalty Programs can also help you increase sales, retention, and Customer Lifetime Value (CLV), which is of course great news for you and the long-term health of your business.
Using a loyalty program mainly has a role in increasing the retention and lifetime value of your customers. In addition, it can also provide word of mouth, so that existing customers bring in new customers.
The acquisition costs of attracting (new) customers via paid marketing channels often weigh on your company's profits, especially when it comes to one-off purchases. As a result, it is very worthwhile to ensure that these customers are satisfied and make repeat purchases. This is exactly what a loyalty program helps with.
A side note here, however, is that for some niches, it may be more or less interesting to set up a loyalty program. It may be that for your niche, it is more important to focus on customer acquisition. This is often the case with a niche where there are few repeat purchases, for example the car industry or mattress suppliers.
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Your “VIP” customers are the people who spent a certain amount of money with you or who purchased a certain number of products over a period of time.
By creating a VIP customer list, you can strategically offer higher rewards when they have the biggest impact on customer loyalty. VIP offers give a sense of exclusivity to people who already love your brand - in addition, it can encourage a sporadic shopper to make extra purchases to get access to the club.
You can even link your VIP segments to a tiered loyalty program where when customers spend more money with you or the more orders they place, their rewards become more valuable. Klaviyo's excellent segmentation capabilities support this very well.
Rewards can include discounts or you can offer cashback if a customer spends a certain amount with you or places an X number of orders. You can also be even more precise and offer various rewards, benefits and incentives when your customers take a certain action, such as placing an order, signing up for a (webshop) account, referring to a friend, posting a message on social media, or telling you when their birthday is, for example.
In addition, you can also think about other ways to use a loyalty program where your customers can, for example, support charities or initiatives with this program.
There are several tools you can integrate with Klaviyo to set up a loyalty program. Do you need help with this? The experienced team at Polaris Growth can help you set up Klaviyo flows. Please contact us using the form below.
Not all rewards have to be money-based. Access to a test panel, early access to products and promotions, and exclusive event invitations can also be very valuable for retaining customers. For niches with the potential for repeat purchases, it's very valuable to put effort into a loyalty program. However, determining the right strategy and setting up the structure correctly can be a challenge. Do you need help with this? Then the experts at Polaris Growth are here for you.
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