A good online store loyalty model adds value and supports the synergy between brick-and-mortar stores and online platforms. However, since everyone has one, even the neighbours, it's worthwhile focusing on refining quality. How do you assess the needs and resources for the right loyalty model, and how do you determine which suits you best?

Every retailer's dream scenario is that the customer concentrates their purchases and customer loyalty is long-lasting and resilient. There are many routes to this point, one of which is loyalty programmes.

In previous years, customers were issued with wallets full of cards, now the focus is on the trinity of online stores, physical stores, and digital services. It is not a trivial matter, but a significant investment where it is important to know what, why, and how.

Therefore, we present the three different levels of a loyalty model that can be adapted according to the company's size, goals, and operational prerequisites. We will also discuss other ways to achieve the retailer's dream. But first, let's talk about money for a moment.

Loyalty Programme, what's left on the bottom line?

The loyalty model initially requires thorough deliberation. What are the goals, what kind of technological solution is needed, what resources are available, and most importantly, how does the investment pay off financially?

There are industry-specific differences in the profitability calculations of customer loyalty - a restaurant has different variables than a car dealership. 

Regardless of the industry, at least consider these three things in your calculations: 

1. The number of customers committed to the programme

2. The time spent on operations

3. The budget available

It's also wise to estimate how much the average purchase of a loyal customer is. Is a high average purchase the only goal or are there other indicators?

And now, let's shift our focus from the wallet to the alternatives; next, we will open up the three models of the loyalty programme. All of them are designed to engage the customer with your business, within the scope and conditions of your business operations.

Scale The Loyalty Model According to Needs and Resources

Loyalty programmes do not require a large apparatus behind them to produce benefits for both the customer and the company. 

At its simplest, engaging a customer can be achieved with an old-fashioned stamp card. More advanced programmes offer added value on a broad spectrum, from themed evenings to personalized service and, for example, insurance or a sense of community. 

When considering a loyalty programme, think about what kind of customer base and product portfolio you have. Is it necessary to try to engage customers by rewarding them for concentrating their purchases? Or would it suffice for customers to register online and give marketing consent?

In addition to technical aspects, also take into account the development of the rest of the industry, that is, the competition, the growing demands of customers, and your own available resources.

In marketing, in turn, it is essential to provide customers with enough information to aid in comparison and decision-making, and the terms and conditions must be fair and clear to the consumer.

1. Loyalty Model Without a Loyalty Programme

Suited for: A startup or a company with a small turnover.

You get a hold of the customer and the opportunity to offer them added value when they register online and give marketing consent. With this solution alone, you gain a lot of information about your customers' purchasing behaviour and can target marketing, such as discount codes, according to customer interest. 

Registration provides the customer with a faster purchase path and order history. Offline purchases can be linked to the customer account via phone number or email address. You can motivate the customer to provide their data by offering an electronic receipt.

💡Note: Engagement occurs more through the customer experience and daily marketing.

2. Loyalty Programme with a Ready-Made Package

Suited for: A growing company with an established customer base.

If the previous model is too limited and you want a loyalty programme, the solution may be found in loyalty add-ons offered by online store platforms.

Typically, add-ons offer point collection systems, loyalty tiers, and the definition of benefits available with points. In some add-ons, it is possible to reward customers not only for purchases but also, for example, for sharing and liking social media content, which can enhance your store's visibility. 

💡Note: The customer always expects a seamless customer experience regardless of the purchase location. Ensure at least that online and offline purchases are seamlessly recorded into the loyalty account and that online services are user-friendly and accessible.

3. Loyalty Programme with Deep Engagement

Suited for: Premium brands, higher-priced products, or brands wishing to associate themselves with phenomena such as lifestyle or mode.

If you want the most engaging loyalty programme possible and have sufficient resources to implement it (enough staff and budget), you can take advantage of a wide toolbox. This may include not only accruing bonus points but also a custom mobile app for your store, loyalty events, and benefits from partner services. 

This model is like a marriage: prepare for a long and rewarding relationship where monotony and everyday greyness are not welcome. Remember anniversaries and sometimes make ordinary days special.

💡Note: Know your customer and charm them! A well-executed loyalty model can create a phenomenon that broadly and diversely benefits your business. For example, you can sell additional products and services with a one-time purchase, which can increase your cash flow from other sources as well.

Loyalty is Just Part of a Good Customer Experience

At its best, a loyalty model creates more value for the customer than just the purchased product. It creates status, significance, and the important feeling of belonging to something. 

There is an intrinsic need to feel part of a larger phenomenon, connected by a shared interest. This need is already being utilized, especially by premium brands, where products are pricey and a single purchase is significant. On the other hand, brands related to home and living also strive to capture this feeling. 

A returning customer is the best customer. Loyalty models are an excellent way to foster engagement but certainly not the only way. We have previously highlighted the importance of understanding customer experience and have described three tiers of customer experience, which provide an easy way to evaluate the current state of your online store and gain practical advice on how to elevate the level.

Do you want to expand your online business? Crasman is an expert in digital commerce for whom nothing in online sales is unfamiliar. We are eager to assist you in developing your online business and look forward to discussing it further with you.