Tips to Start an Ecommerce Loyalty Program in UAE

May 09, 2021

The clue to keeping your customers shopping on your online store is to implement a customer loyalty program. The goal of an online shop is to bring customers in and make sure they keep returning to make more purchases. The competition with other eCommerce stores is so strong that everyone needs to ensure that they have loyal customers who keep coming back to shop with them.

This can be challenging because you might have a lot of questions running through your mind. How do I get an edge over my competition? How do I keep my customers coming back to my store? What changes should I make to get loyal customers? Well, implementing the eCommerce customer loyalty program is very important to keep your clients returning for more.

What is a Customer Loyalty Program?

The concept of loyalty programs started in the 1800s when customers were rewarded with copper tokens. These tokens were then redeemed when next they want to make a purchase.  Subsequently, the rewards program started where customers were rewarded for shopping regularly. In no time, this concept was implemented by a lot of businesses all around the world. Now, the practice of loyalty programs has been implemented in the world of eCommerce and more and more online businesses have started to adopt this practice.

One study carried out shows that 75% of American companies have been able to see a return on investment through customer loyalty programs. It has been proven repeatedly that a well-planned loyalty program can provide useful information to improve customer retention. The fact that more and more online stores have adopted this practice is testimony to its usefulness.

The Different Types of Customer Loyalty Programs

  1. Points Program

This is the simplest customer loyalty program to implement and it is one of the most common programs. The idea behind this program is to reward customers with points when they make purchases. This program is often used by stores that offer relatively affordable products. These points can then be used by the customers to redeem discounts, freebies, or special goods.

One study shows that most customers actively use coupons and discounts regularly. Another reward that can be given is free shipping which is dependent on the points the customer earns. One example of incentives that can be given to improve customer retention is the use of trips. This can include gifting top customers a hiking trip if your store deals with the sale of outdoor gears.

  1. Spend Program

The spend program is very easy to maintain and implement. The idea behind this program is to reward customers when they spend a required amount of money within a given period. Once achieved, these customers receive either a gift card or a store credit. This program is very easy for customers since they are already spending so much. When properly implemented in an eCommerce store, you can be sure of better profit margins for each transaction and more transactions per customer.

  1. Tiered Program

This program like the name implies involves clients being upgraded to a higher level as they buy more products from your store. This program is often used for expensive items. As customers increase the amount they spend, they are upgraded to a higher level and they are equally rewarded. A perfect example of a brand that has successfully implemented this program is Uber. Uber targets its frequent riders and rewards them based on the number of rides. This program was used to stay on top of stiff competition from companies like Grab and Lyft.

This program aims to encourage customers to spend more to get more points for more rewards. For example, at the point of entry Uber gifts customers 500 points and subsequently gifts them with $5 to use on their next trip. To get to the next tier which is Gold, they will need an extra 500 points. At the Gold level, the rewards include better customer service and free cancellation of rides.

To get to the highest level (Diamond), customers need to earn 7,500 points. The rewards in this level include free Uber Eats rides, dedicated phone support, and Uber Black cars.

  1. Paid Program

This program is often known as the Premium or VIP program. Here, customers are required to pay a small fee for their membership programs. Here, clients receive exclusive rewards when they pay a monthly or an annual fee. These exclusive rewards available for members improves how customers see the brand. The major benefit of paid programs for people with eCommerce stores is that they can save money. The membership fees paid helps fund the exclusive rewards offered to these customers and you might have more money left.

Members of paid programs are unlikely to leave since they do not want their money to waste. This program will also motivate customers to make more purchases as they try to get back the money spent on joining the program. Amazon Prime is a perfect example of a company with an effective paid program. Here, members pay a monthly or annual fee after which they get discounts, free music and videos, and free shipping.

The exclusive rewards offered by Amazon Prime encourage customers to spend thousands of dollars on purchases or subscriptions. For customers who regularly make orders, free shipping will be a welcome advantage.

  1. Gaming Program

This program was used by Starbucks to reward its customers. Here, Starbuck's gaming program makes earning points fun. Customers are motivated to play some of these fun games on their phones and earn points or stars. The stars they earn can be used to redeem certain merchandise or free coffee. Starbuck’s app was also used to market certain products to these customers. Thus, Starbucks was able to offer the best to its clients through the unique combination of marketing and gaming loyalty.

  1. Value-based Programs

Here, you can create a very strong relationship with your clients that is solely based on the values you all share. If your values are aligned with theirs and they feel like they are a part of a global cause, these customers will be more disposed to be part of your loyalty program. This way, every customer under this program becomes a brand ambassador.

For example, if you own an eCommerce store, you can decide to give a certain amount of what the client spends for a noble cause such as climate change, saving wildlife from extinction, and many others. If you own a grocery store, a part of the money can also go into providing food for homeless people. The options are numerous and they give your customers the sense of being part of something bigger. You can also offer incentives to your customers by giving them discounts when they make charitable donations

Measuring the Effectiveness of Your eCommerce Customer Loyalty Program

You must analyze the data gotten from your loyalty programs to see the effect of your program on your online business. Here are some metrics that you can use to see if your loyalty program has any positive effect on your online business.

  1. Customer Retention Rate

The customer retention rate is the major metric because the main goal of creating a loyalty program is to get customers to keep on buying repeatedly. To do this, you will need to reduce your churn rate (this means that the number of people who shop with you should be higher than those who leave to shop with your competitions).

  1. Google Analytics

This will help you to determine the number of website visitors who have successfully converted into any of your loyalty programs. You will be able to see what attracts such customers such as newsletters or ads. Thus, you will be able to know which works best in getting your website visitors to be part f your loyalty program.

Steps to Create a Customer Loyalty Program

In creating a customer loyalty program, the goal should be to create a program that attracts customers and also keeps them loyal. Depending on your needs, you can combine different types of loyalty programs. Here are the things you need to do to create your unique loyalty program in the UAE.

  1. Identify Your Needs

The main reason for creating your program should be to get your major clients to keep buying from you. For this to happen, certain questions must be asked first. These questions will help you identify some major factors that can help you keep your client. Some of the questions you need to ask include:

  • Why do I need a customer loyalty program?
  • What are the goals of my customer loyalty program?
  • Who are the top customers that I am targeting with my program?
  • What benefits will my top customers stand to gain from my products?

As stated earlier, these questions are very important. Once these questions have been answered, you will be able to select the right customer loyalty program you want.

  1. Fine Tune All Necessary Details

When the basics of this program have been set, the next thing to do will be to fine-tune other details in the program. Some of these details include the terms and conditions, the rewards available to your customers, and the mode of communication between you and your customers. Since this is an online store, the best way of communicating with your customers should be through a website or an app.

  1. Use a Beta Program

When all the other details of your program have been set, you should test the quality of your program with a few of your top customers. You can do this by launching a pilot loyalty program that will help you check the responses from your clients and to fix issues that come up.

  1. Implement a Complete Program

To implement your customer loyalty program in UAE, three steps should be followed. Here are the three steps:

  • Step 1: First, make a report of your top clients based on the amount they have spent. Here, you will need to decide which customer qualifies to get a reward from either money spent or points earned. Depending on your specifications, your report can be monthly or quarterly. The report will then guide you on how to properly reward your top clients.
  • Step 2: Next, send a reward to your top customers and explain their eligibility to redeem that reward that they have earned.
  • Step 3: After the first two steps, repeat the same process every month or every quarter and watch the trends as you do this. This will help you identify your customers who have stopped buying your products. When this happens, you can offer them shopping credits or discounts to bring them back into your loyalty program.

On the other hand, if you discover a few clients who have been consistent with shopping and have been redeeming rewards, let them know that you appreciate them with a ‘thank you’ message at regular intervals.

  1. Pay Attention to the Redemption Process

Another thing you need to pay close attention to is your redemption process. The goal should be to motivate your customers to shop more to improve the rate of retention and to prevent them from shopping with your competitors. Thus, you need to make the redemption process as simple as possible while communicated properly to your customers.

  1. Communicate Progress to Members of Your Programs

To make sure that your customers are regularly involved with your program and that they shop regularly, you will need to keep your program members updated regularly regarding their progress. Keep them updated when they are close to receiving their rewards. You can acknowledge other customers who have achieved their goals to encourage those who haven’t.

  1. Try Reducing the Churn Rate After Redemption

A lot of members might decide to leave your online store after claiming a prize. To prevent this, you might need to come up with a few incentives to keep them shopping. You can decide to upgrade their membership or to give them discounts to encourage them to set new goals in your program. Your customers will feel appreciated when they see you taking a personal interest in them. when you recognize and acknowledge your customers, they might be more inclined to stay

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