Promotions and loyalty program management in digital commerce

Promotions and loyalty program management in digital commerce

Promotions and loyalty program management in digital commerce

Promotions and loyalty programs in digital commerce are widely used as a means to engage the customers, increase sales, and get rid of the surplus stock. It is considered to be one of the most important segments of online trading operations, and carrying those in a proper manner always brings benefits on multiple levels.
Apart from increasing sales and revenue, it also helps customers feel important to the brand or retailer, and that is something that is always rewarded heavily. Engaged and happy customers will always be a backbone of any online trading business, and that is a factor that often makes the difference between long years of success and an abrupt end of all your efforts.


In order to cover this extremely important segment of your operations, you definitely need to follow certain guidelines that will help you ALWAYS come with the right solution and the promotional campaign that will give the best results possible.
The variables you need to consider when devising eCommerce loyalty programs and promotions are:

  • eCommerce platform capabilities
  • Channels through which the promotions will be pursued

 

eCommerce platform capabilities
It is of the utmost importance to consider what the platform you are using is capable of providing. The best eCommerce platforms have the entire package of functionalities to carry out any strategy you wish to employ, but these options are rather pricey and not all companies can afford them. On the other hand, the weaker and cheaper platforms don’t always have the option to run multiple promotions or loyalty programs under different rules, and at the same time.


This can be a disrupting factor to some extent so it is best to make things clear before even starting with the strategy.


What needs to be done: You need to make sure that the eCommerce platform you are using is capable of providing the rules you wish to pursue.


How to do it: Consult the experts. Web agencies know exactly which customer loyalty and promotion options are available.


Useful tip: When you wish to run these operations on external marketplaces, the rules are limited by their offer. It means that it is possible that the platform can provide specific rules in the standard storefront, but cannot provide them on the marketplace (eBay is the best example of this issue). Your web agency or consultancy will know how to deal with this and you will get the proper data on your options.

Channels involved
Promotions and loyalty management become a complex issue if you want to pursue them in multichannel or omnichannel operations. Running a unified campaign over all geographies and via all channels is not only unwise, but also can be extremely harmful.


In order to really comprehend what is the best direction to take, you need to realize that there are significant cultural differences between different geographies. That means that the peak of the shopping season in one country does not have to coincide with the peak in sales in other countries. This fact alone is enough to show that running the same type of promotions at the same time, via different channels is not going to work! Period!


Also, when we bring things to another level, and involve omnichannel operations into the equation, the things start getting even more complicated. Simply, you will have brick and mortar stores in some geography, and in the others you will be focusing on other channels due the very fact that you have no other choice.
All of this clearly shows the need to run the promotional campaigns differently on different markets.


When it comes to loyalty programs, the things get even more complicated. In many cases, these loyalty programs are covered in both online and physical shops. Combining different loyalty cards between eCommerce website and the physical stores can be more than a complicated ordeal.


The only way that this is going to work is to clearly split the campaigns and to run them locally, for each channel and geography under different rules. In each and every case the rules need to be in alignment with your capabilities, as well as with the financial projections.


What needs to be done: You have to split the action plan for both promotions and loyalty programs in segments that target specific geographies and the specific conditions you will face there.


How to do it: Collect as many data as possible concerning shopping habits and the peak seasons in all the geographies you wish to cover. Also, make a list of your resources and adjust the campaign that you will run in each separate geography to it.


Useful tip: Focus on the markets where you are already operating well. Huge promotions and any kind of loyalty program will give slim results without a solid customer base.


These are just the rough guidelines on what dangers lurk along the road, and it still provides little help to someone who wish to bring his business to the next level and start using these options. In the next segment, we will explain the best practices that can be applied in order to run these operations in a proper way. All guidelines will be explained through three different segments:

  • Promotions
  • Loyalty programs
  • Customer retention

Promotions
The best reasons to run promotions are rather simple – either you wish to expand your brand presence, or you are looking to offload surplus stock without heavy losses. In both cases, you will be offering your wares at the discounted prices.


Doing so without any particular reason may look like you are trying too hard, and the customers are not always ready to fall for it. In order to avoid this from happening, it is best to run promotions during the peak season, or to run them as a way to mark some significant date. In the entire western world, the best periods for such endeavours are around New Year (Black Friday, Cyber Monday, Christmas, and New Year) and around Easter.


By applying certain discounts and pushing the message that your goods are on sale, you will be able to quickly make substantial gains. These sales and promotions can be also used around significant holidays in each and every country (often connected to the bank holidays in those countries).
The best effects will be obtained if you run the promotions during strictly predefined timelines. Usually a week or two for smaller holidays and up to 1 month for larger holidays is the ideal timeline.


If you are looking to offload surplus stock, make sure that you apply different discounts. Generally, the stock you want gone should be put on with a higher discount. In cases when you are looking to expand the customer base rapidly, the best approach is to put higher discounts on the best-selling items. They are the most popular ones, and offering them at a lower price will get you more sales. As these are the products that people generally like (and that is why they are selling well always), the effect of word to mouth will get you the expansion you want.


Promotions can be also limited by the stock quantities (you can offer only a certain amount of items at discounted prices). Using promo codes is also something that can additionally engage the customers, and provide you with a lot of data that can be later on used in loyalty programs.

What needs to be done: You need to predefine the time duration of each promotional campaign, goals, discount values, and means to broadcast the message about the promotion.

How to do it: We already mentioned the rough guidelines on how to pick periods for running promotions. Simply make sure that they are in line with the market you want to push them on. Adjust discount values to the goals you want to achieve. Push a strong marketing campaign on all levels that are at your disposal. This simply has to include social media, posts on the website, email marketing campaigns, and announcements in physical stores, where present. Also, according to your budget, it is possible to run traditional marketing campaigns in the targeted geographies. This includes press, radio stations, TV channels, leaflets, and every other means that you have at your disposal.


Useful tip: When launching email marketing campaign to announce promotions, make sure that you contact only the customers that can actually participate. Segmentation of the mailing lists according to geographies should do the trick completely.

eCommerce loyalty programs
Loyalty rewards programs are used to stimulate customers that are already creating a lot of revenue for your company and to tie the customers that have bought something for the very first time.


The system is rather simple, and includes various options. In omnichannel operations, it is usually based on loyalty cards, but these cards can be easily used in every segment of trade, including both online and offline sales points.


The system behind this is rather simple – you can dedicate a certain amount of loyalty points to each item in your stock, and then you can offer discounts based on the number of accumulated points during the next purchase. This is a great way to obtain data from your customers, tie them to your business, and improve your online marketing efforts. During the first purchase you need to condition customers with signing up with the loyalty program. In that way, they will obtain their loyalty card, and you will obtain their contact details. It leads to the expansion of your mailing lists, and greater reach during promotions through those channels.

What needs to be done: You need to devise a loyalty program plan and offer it to the existing and new customers.


How to do it: The old customers that are already in your database should be offered this option via mailing lists you possess. The new customers should be provided with an easy way to notice and sign up for the loyalty program. Popups on your website usually do the trick. Consult with your digital agency for expanded options.

Useful tip: You can manipulate loyalty points and discounts provided by them in any way you wish. You might want to apply the same rules on these as it has been already explained in promotions section.

Customer retention programs
Customer retention programs are targeting the potential customers that started the purchase process but abandoned it at some point. You wish to retain those customers, bring them back on your website, and turn them into regular customers. It is not too hard to do if you devise a right strategy and combine traditional customer retention programs with promotions and loyalty programs you are already running.


The first step is always an email reminder, in case they have registered on your website. You can easily devise a campaign to ping them via email and offer to finish the purchase at discounted prices, and with the sign up to the loyalty card. Also, with more advanced operations, there is a possibility in using the SMS. This is a bit harder to carry out as it requires the phone number which customers are less eager to leave during the first purchase. It can also drive them away in many cases, so the entire strategy should be taken with a pinch of salt.
The third, and the last way is the most often used, and it involves cookies that allows tracking the potential customer, and offering the discounts after they abandon the cart via paid advertising. They will be getting suggestions wherever they go, so it is not impossible that they will come back. Still, this is the option that costs the most and gives rather slim results compared to the previously mentioned ones.

If you follow all these steps properly, you will be able to come up with a strategy that will work. Of course, consulting the experts is more than recommended, as they usually know what works the best. We at Studioworx are able to provide advice and guidance, and even to completely devise the strategies you require and implement them. You are free to give us a call and we will give our best to help you out!


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