It's a scary reality: e-commerce sites turn over as much as
60 percent of their customers every six weeks. Given such a
discouraging statistic, how is your site supposed to grow when
finding new customers may consume all your time because
first-timers rarely make return trips?
The answer is, it can't. You'll have to find a way to
get customers to come back for more. The secret, say experts, lies
in building loyalty. Achieve that, and you most likely have a
customer for life.
Online incentive marketing (setting up loyalty programs on your
site, for example) works wonders when it comes to building
relationships with customers. In a recent study from market
research firm NFO Interactive, about 53 percent of online consumers
surveyed said they'd go back to shop at a specific Web site if
it offered incentives.
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"Customer retention is [incredibly] important; one way to
make someone a lifetime customer is through incentive
programs," confirms Leland Harden, co-author of NetResults.2: Best Practices for Web
Marketing (New Riders Publishing). "Incentive programs
allow merchants to show customers that they appreciate
them."
There are numerous such programs out there. You could do
something as simple as offering customers the ability to earn
gifts-like T-shirts emblazoned with your logo. Or you could go with
the most popular option, known as a frequent-buyer or points
program. This choice gives customers the opportunity to receive
frequent-flier miles, discounts or points toward the purchase of
merchandise by buying products on your site. The more your
customers spend, the bigger the discounts or the more points they
receive.
One company reaping the benefits of the strategy is GoCollect.com, an
Arlington Heights, Illinois-based community and portal Web site for
collectors. The site rewards customers by giving them the
opportunity to amass loyalty points they can trade for savings on
future purchases.
It works like this: When customers sign up for
GoCollect.com's program, they receive five points. They also
get points every time they purchase products, visit the
GoCollect.com site, get a friend to register, or participate in a
poll or survey. When customers hit 500 points, they receive $10 off
their purchase at checkout.
"We set up the program to show our customers that we really
appreciate their business," says CEO Shonnie Bilin. "And
the program has been a great success because it helped us develop
customer loyalty. We reward customers for coming back to the site.
Then they reward us by [returning] and purchasing more
products."
Although Bilin, 47, set up her program in-house, you can also
outsource your program to an incentive company such as MyPoints.com Inc.,
Netcentives and WebMiles Corp.. When your company joins the
company's merchant or partner network, members who purchase
products from your site receive points that can be redeemed for
merchandise or airline miles.
Before deciding which program to try, however, make sure you
know your customers-and the kind of loyalty program they'd be
interested in. Do they prefer frequent-flier miles, points or
discounts? Would they come back time and time again if the right
incentive was offered? If you're not sure, simply ask
them-it's really the best way to find out.
Keep in mind that incentive programs aren't for everyone. If
you sell niche or expensive products, for example, shoppers may buy
something once but then have no reason to visit your site again.
So, before you spend time and money launching an incentive program,
consider whether your effort will be worthwhile.