An ecommerce website has a lot of jobs. First and foremost, it has to showcase products, provide information, facilitate sales and process transactions. It is also the virtual “face” of a brand, reflecting the personality, appearance and overall experience of interacting with that company. As such, ecommerce websites have a major opportunity to increase customer lifetime value by encouraging repeat visits and purchases over time with thoughtful and well-integrated content.
Two key elements of ecommerce that can positively impact KPIs are loyalty and gift card programs. While many websites feature loyalty and gift, the success of these programs depends on how they exist within the greater ecommerce experience. Following, we’ll discuss some key benefits as well as best practices for setting up and executing on an integrated loyalty and gift card strategy.
Capture Valuable Data
At the core, loyalty programs are a data capture strategy. Brands offer an incentive – either immediately or in the future – in exchange for a customer’s information. But for successful programs, that initial exchange is just the beginning. From there, they will begin to attach meaningful data points to that customer’s profile such as product preferences, browsing behaviors, or demographics, feeding those insights back into the business to increase conversions, optimize spend and improve the overall customer experience.
While often overlooked for this capability, gift cards, merchandise credit and promotional strategies also offer numerous opportunities to identify and understand customers, especially when it comes to ecommerce. eGift or digital gift cards “gifted” from one customer to another can reveal the demographic and product preferences of entirely new audiences, enabling brands to use that information to build audiences used for marketing on social or ad platforms.
One of the key factors that makes a well integrated gift card experience best-in-class is that customers are able to both buy and redeem gift cards through any of the purchase channels a brand is employing, including in-store and online. This means that cards bought in store can be redeemed online and those purchased online can also be redeemed in store, and all of that data becomes part of the customer journey.
Increase Engagement, Growth & Revenue
While new customer acquisition is important for any organization, fostering loyalty among existing customers makes great business sense. Loyalty program members generate 12-18% more revenue than non-members, and over time, returning customers will spend 67% more than new ones. For an ecommerce-only store, 40% of the revenue comes from 8% of their customers. Who makes up that 8%? Repeat visitors!
To motivate positive behaviors like repeat visits, higher AOV and even customer referrals, loyalty programs can employ a variety of tactics. Offering benefits such as points, real-time discounts exclusively for members or triggered communication via the consumer’s preferred method can translate into discounts, VIP access to products or sales, or even just the feeling of being known or valued by the brand.
A well integrated ecommerce loyalty solution offers the opportunity to communicate “events” that occur on the site to be recorded on the customer’s profile and even rewarded upon if desired. For example, a customer’s product review might trigger a thank you email and an award of additional points as a result. The more a loyalty program can make a customer feel appreciated and unique the more impactful it will be.
Similarly, gift and stored value programs can complement these efforts by generating opportunities for repeat visits and purchases. Merchandise returns are a great use case for this. Offering a $5 bonus to customers that elect to have a return applied to a merchandise credit versus an in-kind refund not only ensures that the revenue will stay with the brand, the vast majority of shoppers will spend more 2X the value of the credit upon its redemption. (Clutch).
Loyalty Program Basics: Set up for Success
When it comes to integrating loyalty into an existing ecommerce site, proper representation of the program is critical for awareness, adoption and engagement. To motivate signups, the most common – and successful – methods occur as close to the checkout as possible and include some element of instant gratification.
To encourage loyalty program enrollment, most brands utilize the ecommerce account creation flow by either automatically enrolling upon account creation or adding an enrollment checkbox to the flow. A best practice is to offer a monetary or value-based incentive like free shipping that can be immediately redeemed at checkout.
Once a customer has enrolled in the program, there are a few key functional areas to drive awareness and engagement going forward:
My Rewards: Generally included within a customer’s “my account” section of the website, this area features a customer’s loyalty member information, program benefits and may also include the following:
- Current reward status with optional visual indication of distance to next reward
- Any available rewards and balances
- Member account information such as member ID and any other information that is part of the customer profile (i.e. demographic, preferences, etc)
- A stand alone enrollment/opt-in form
- General information about the rewards program including Terms and Conditions
My Profile (Preference collection): This page should also live within the “my account” section and is used to understand preferences that are specific to a brand. For example a shoe retailer may seek to understand preferences such as shoe size, style preference, favorite color and favorite recreational activities. These preferences can be made available for segmentation purposes, powering highly relevant communications from the brand. Preferences for a shoe retailer might inform an offer for a discount on red running shoes if the member’s profile shows she loves red and her hobbies include running.
Cart & Checkout: Here customers should be able to view, apply, and redeem loyalty rewards during checkout
Enrollment, Rewards Status & Balance Widget: This widget can enable customers to view reward balances while browsing on other areas of the site
Potential Rewards Widget: This widget can show possible points earned on various pages to incentivize conversion improvements
Each of these sections should have conditional views depending on whether a visitor is enrolled and/or logged in. In general, if a visitor is not logged in or enrolled, they should be encouraged to enroll or login. If they are enrolled or logged in, they should be shown contextual information specific to their account such as total points or available rewards.
When implemented correctly, these functions can provide customers with a location online to easily manage and view their rewards accounts while serving as an important tool in helping convert browsing behavior into checkouts.
A Hidden Treasure: Showcasing Gift
If they’re deliberately searching – and have sharp vision – most ecommerce visitors will eventually locate a teeny tiny link in the footer menu labeled “Gift Cards”. This obscure placement is not only difficult to find, it doesn’t capture the attention of visitors who may not have gift cards top of mind.
Instead, some great placement options for gift card items include:
- Product Category Menus
- This works well alongside wedding, baby, shop by price, and designer collections
- Great for seasonal or themed gifting
- Site exit or tab closure
- A pop up might include a link and message: “Can’t find what you’re looking for? Choose a gift card as the perfect option”
Decisions, Decisions: Physical and Virtual or eGift Cards
Wherever the gift card link is placed, it should lead to a gift card decision page where customers can decide between physical and eGift, custom designs, as well as recipient information.
- Physical Gift card – user will choose denomination and apply the card to the cart. In some cases, the user is given the option to ship this card to an alternate address (the recipient) instead of themselves. A brand can consider providing multiple design choices such as seasonal holiday designs, Happy Birthday or graduation themed cards.
- Virtual Gift card – user will specify their name and email as well as the name and email of the recipient to whom the gift card should be emailed. This provides an opportunity for the recipient information to be collected and stored for reference in the database. Several options of virtual ‘card designs’ can be created to speak to occasions, seasons or design collections to give the buyer options.
Like many things in life and work, the more invest, the more you’ll get out of your ecommerce loyalty and gift card programs. Integration, setup, program design and user experience on your website are key to driving engagement and success over time. Fortunately, when you use these programs to compliment your data strategy, they’ll work as a bridge to connect you to your customers so you can truly learn what’s working – and what isn’t – when it comes to your ecommerce loyalty and gift strategy.