How a Loyalty Program Can Boost Your Holiday Marketing StrategyArticles • September 15, 2016
A few weeks ago it was raining heavily. Ahhh, I really hate rainy days. To pass time, I was surfing on the net, reading the news. Then my phone suddenly started vibrating. I’d just gotten an email from my favorite ecommerce store, which sells handmade Japanese plush toys and dolls.
The subject was: “Weekly Bonus TOM Points Deals “.
“Oh yeah, the TIME has already come, when all ecommerce stores start bombarding me with holiday offers…” I thought to myself.
But as I read the email, I became more and more curious.
Here’s what it said: from week-to-week, the shop will select different products and sell them with 10-30% discounts. As an extra, by purchasing the chosen item, I can earn more than the usual 1% cash back in loyalty points. Quite a good deal, which aligns perfectly with what holiday shoppers are looking for!
And the icing on the cake is that they’re able to keep their shoppers’ attention throughout the whole holiday season by changing the list of discounted items on every week.
And voila! They took all the necessary steps to encourage customers to shop multiple times during this holiday season! The more points customers earn, the more discounts they can get, which drives them closer to their next purchases. Smart thinking.
How does a loyalty program make a difference here?
Let’s take a look at the 3 main features that make this Japanese store shine with its customer loyalty marketing strategy during the holiday rush:
- Loyalty members-only offers: I didn’t point this out at the beginning, but I received their email because I had previously enrolled in the store’s loyalty program. They call their loyalty currency “TOM points,” so as soon as I read the subject line, I knew that some exclusive offers were waiting for me in that email, something that isn’t available for just any shopper – just for me. That’s what made me open their email.
- Bonus points event: Ordinary shoppers only get the usual 10%-30% discounts, but loyalty members are getting an extra 10% in the form of points during the festive period. (Usually loyalty members only get around a 1% discount in points.) And why is this good? Because they’re encouraging members even more to use their point discounts on their next purchases.
- Time-sensitive offer: Of course, the store made sure that their offer appears as enticing as possible. They set up a 1-week limit for the feature products, encouraging customers to act quickly. On top of that, they change the list of discounted items every week.
Now, why does this last feature work? There are two main reasons:
- The store give customers ideas from week to week about what to buy. Actually, 7 in 10 shoppers are totally undecided or are considering multiple gift options when they start searching during the holiday season.
- The chances that the store may list an item that members are already interested in is high. Now, loyalty members receive a stronger incentive to jump from “I’m considering it.” to “I’ll buy it!”
It’s no wonder that eMarketer also found that 55% of shoppers will be influenced on where to shop based on whether a store has a loyalty program or not. Because shoppers know, that as loyalty members, they can get exclusive benefits and participate in special offers. That’s the thinking that makes shoppers sign up, and it’s also why a loyalty program can really make a difference in helping you stand out from your competitors, especially if you show your loyalty offers to non-members, too.
Emarketer found that, as customers are faced with more options, their shopping decisions are influenced by whether or not a store has a loyalty program.
Now it’s clear how and why a loyalty program can give an advantage over your competitors. But how you can benefit from it even more? When it comes to first-time shoppers, for example, how you can turn them into returning shoppers for the next year? Well, let’s see!
A complete idea bank of loyalty offers for the holidays, based on two customer segments
1. Charm non-loyalty members by showing the benefits of your loyalty program
Remember that email I got from my favorite Japanese store? I shared the content of an email newsletter which was meant for loyalty members. But can you imagine that SMS is also a good way to reach customers with your loyalty offers during this festive time of year? According to another eMarketer report, nearly half of Internet users in the US (48%) prefer to receive loyalty incentives through SMS, while direct mail (8%), app notifications (20%), and emails (22%) work for the rest of them! SMS is dominating the playing field! Shocking? Perhaps.
Internet users in the US and their preferences about receiving loyalty offers. As a comparison, eMarketer found that marketers currently use the next channels on mobile: mobile wallet (28%), push notifications (21%) and text messages (21%).
But of course you shouldn’t depend solely on SMS – especially if you’re targeting non-members. To reach as many people as possible, you should have a complex marketing strategy that involves all of your other channels from social, website, email and mobile, too. So, here are some features that you can use to attract new customers with your loyalty program:
- Points for purchases: Be upfront about your loyalty program benefits. Show shoppers how many points they can earn when they purchase from your store (and how that translates into discounts), right next to your products.
- Points for account registration: The main problem during the holidays is that shoppers often use guest-checkout. But if they can gain loyalty points and see clearly the kind of discounts and perks they’ll get as they make their very first purchases, then they’re more likely to take that extra step and sign up.
- Points for sharing contact information: I’ve already mentioned how customers prefer receiving loyalty offers through text messages, emails or app notifications. Now, here’s a good chance! Give a small amount of points for customers who share their phone number, sign up to your newsletter list, or download your mobile app.
Where should you communicate these great features? In every possible place. Share posts on Instagram, Twitter, Facebook or even on Pinterest and Snapchat – depending your target audience’s favorite social networks. On your website, use banners, pop-ups and on-site notifications. And don’t forget to run ad campaigns to promote these features, including remarketing.
Last year, OshKosh B’gosh announced that they launched a rewards program near the holidays, and notified their Twitter followers that they can earn $10 after their purchases if they enroll.
2. Offer more exclusivity to your existing loyalty members
I’ve already analyzed some great loyalty features to attract existing loyalty members (e.g. bonus point events for members only, and time-sensitive offers), but I’ve got some more great ideas. Here’s a quick list of tactics that work, and are sure to please your loyalty program members:
Double points for different customer tiers
With Sephora’s Beauty Insider, program members can reach three loyalty statuses: VIB Rouge, VIB and Beauty Insider. Now, these members – based on their status – can earn more points, the more they spend. For example, in their limited time campaigns, VIB Rouge members can earn 4x more points compared to the usual rate, while VIP members get 3x more points and Beauty Insiders get double points. So it’s easy to see that it pays to keep shopping. And the promotion is only available for their members through mid-September, encouraging shoppers to act.
In Sephora’s loyalty program, members who have higher membership status have opportunities to earn more loyalty points.
Charitable rewards mixed with sweepstakes
Now, let me show you a thrilling example from My Coke Rewards program! The promotion that I’m talking about is actually a Back-to-School loyalty campaign – read more tips on back-to-school loyalty offers from our previous post – BUT! Their loyalty program concept can be used perfectly for the holiday season! First, what I love the most about their program is that, by entering in their sweepstakes, you can win a gift card worth $1,000, and at the same time, you can give the same amount of money to K-12 schools of your choice! With this they are killing two birds with one stone – nicely, of course! They offer a fun and an absolutely free reward to win for their loyalty members, AND also show that the company cares about the same issues as their target customers! It’s simply… perfect.
In the My Coke Rewards program, members can enter in sweepstakes to win a $1,000 gift card and donate the same amount of money to a school of their choosing!
Extra rewards for customer referrals
Way before the holidays – and during – referrals can really come in handy for you. Your existing customers can get you prospects whose chance of purchase is higher than those who you acquire through advertisements. Actually, referred customers drive 2x more sales than ads. Let’s see how ShotDeadInTheHead, a family T-Shirt store with a funny and extravagant style encourages customer referrals in their loyalty program. First, their referrers get 200 points after their friends’ first purchase. But the story continues… The store clearly knows that they can benefit more from returning customers, so they make sure that those invited friends will keep buying from them by encouraging their referrers to invite customers who purchase more than once. If this happens, the referrers got 5% reward points after every purchases their friends make in the store.
ShotDeadInTheHead gives 200 points for referring a new customer. But they’re aiming to get more returning customers, so those who refer get 5% in rewards points after every purchase that their newly-referred friends make.
What happens after the holiday season?
All of these loyalty program incentives have one main purpose: to help you retain holiday shoppers on the long-run, even after Q4. It’s okay that your targeted revenue goal is reached in this holiday season – reports say that ecommerce sales increased by $9.33 billion last year, and this number will be even higher this year.
But you need to think what you’ll do afterwards.
The good thing is that during Q4 you can encourage your holiday shoppers to sign up to your newsletter and share their contact details. With this information at hand, you can use your loyalty program features to retain them in the next year. To find out how, check out our latest infographic.
All fired up to involve a loyalty program in your holiday marketing strategy? Then sign up for a VIP demo, and see how Antavo can help to you capture and retain your holiday shoppers in the long-run.