With Ecommerce becoming crucial for retail business leaders to drive revenue and greater customer engagement the world over, there is a massive requirement for rewards and loyalty programs for brands to stand out from their competitors and retain their loyal user base. MarketsandMarkets forecasts the global loyalty management market size to grow from USD 7.6 billion in 2020 to USD 15.5 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 15.3% during the forecast period. The market’s primary growth drivers are omnichannel and multi-channel programs, technological advancements, and a growing need for competitive differentiation.
What is a Customer loyalty program?
Customer loyalty programs are key retention strategies that never fail as they build long-term relationships with their customers. Brands experiencing churn or looking forward to expanding customer base are adopting loyalty programs to predict subscription and renewal chances.
The reward program data gives a real-time snapshot of customer health and their interest in purchasing products, upgrading services, and interest in referring the brand to their friends and family.
There are various loyalty programs such as points programs, cashback loyalty programs, tiered loyalty programs, premium loyalty programs, and hybrid loyalty programs. The best loyalty program rewards their loyal customers when they least expect it. Rewarding a user on his/her birthday is a great way to enhance the customer experience. Let’s look at the most effective ways to implement loyalty programs in Ecommerce with examples.
Points based loyalty programs:
The Myntra insider program is a loyalty program that is open to its registered users. Users have to join the program to avail of the starting bonus of 100 points and 10 points for every 100 rupees spent on shopping.
Users can redeem their points for an exclusive 1-on-1 session with a renowned stylist. Being a Myntra insider member in the insider community, users can get fashion tips and advice from India’s top celeb stylists. With VIP access, users can get access to all Myntra sale events and launches.
As per a business insider, the program has amassed close to 6.8 million members who contribute over 40% to its overall sales. That’s huge, isn’t it??
Tier-based loyalty programs:
We often see tier-based loyalty programs in airlines-ecommerce. Budget-friendly airlines Spicejet launched its – frequent rewarding flyer program.
Users can earn reward points on every flight booking, upgrade, meal, and add-on by opting for this flyer program. For every 100 rupees spent, users gain 10 SpiceClub points.
The SpiceClub is segregated into four tiers – each tier with its own set of benefits. Once users opt-in to be SpiceClub members, every completed flight journey takes them closer to the next tier. Upgrade to the following tiers is based on the completed flight journeys and the total amount spent by the user in that tier from entry.
A member can enjoy Classic Tier privileges for a lifetime; however, the flight count and spending would be reset to zero at the end of every 12 months.
Thus, Spicejet uses its tier-based loyalty program for rewarding points and encourages the members to spend more to upgrade tiers and qualify for better service and rewards.
VIP Loyalty programs:
Some companies offer VIP service with a paid membership program. VIP members can have exclusive access to premium content, products, and services.
Amazon prime is a great example of VIP loyalty programs. Launched in 2005, Amazon prime has embedded pay2play mechanics into its paid membership program. Prime users can enjoy free and expedited shipping, access to premium content on OTT channels, free music, and many more. Being straightforward with no coins and tiers in action, Amazon prime is ruling the paid subscription era for a very long time with loyal customers.
There are many more loyalty programs like perk loyalty programs, cashback loyalty programs, intelligent card loyalty programs, which are more or less the same and are self-explanatory. The underlying concept remains the same for all these loyalty programs – retain users with exclusive services and offers. The best things about loyalty programs are that they never fail if the program’s design and implementation are straightforward which makes it a no-brainer for customers..
How Upshot.ai rewards and loyalty programs work–
Users can earn and redeem rewards and loyalty points through multiple channels using the app, website, or engaging in-store using Upshot.ai.
Upshot.ai enables you to customize reward programs according to your brand and integrate them across every channel, with no need for code. Using customized rewards improves your conversion rates.
Monitor and evaluate your rewards campaign performance using our comprehensive analytics dashboard, which provides more than 50 analytics reports.
Create an event or action-based trigger to reward behaviors such as purchases, product reviews, social shares, and more based on your business goals.
Rewards for rating the app – Upshot.ai use case:
One of our premium clients wanted to increase its app rating. Our experience told us that users vent out more but were not motivated enough to appreciate any improvements. We created opportunities for an engagement loop that motivated users to leave a review and rewarded them in return.
Every reviewer got a guaranteed 1000 coins and entered a lottery where five lucky reviewers would get 100,000 coins. Each reviewer needed to ensure the reviews were genuine by submitting them against their nicknames. After the lucky draw, the five winners were notified
Result: App rating improved from 3.2 to 4.2 in 5 days. The app received around 219 positive reviews in App Store and 191 in PlayStore.
Rewards and loyalty programs are just the mechanisms that facilitate a medium to interact with users. The client requirement and business goals frame the core of the concept, and rewards are built on top of the business need. Thus pay more attention to what the user wants, appreciates, and loves to interact with for a longer time rather than offering perks and coins.
Upshot.ai is an omnichannel, user engagement, and gamification platform that helps digital product owners and marketers improve their product adoption and conversions. Fortune 1000 companies such as GE, UHG, Puma, Sony, ITC, Tenet healthcare are using Upshot.ai and observed a massive increase in product adoption YoY increment in revenues.
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