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This is the initial in a series of articles we will be publishing relaying thoughts and concepts from the Internet Retailer Conference in Chicago, which occurred June 5th by way of June 7th. Mark Goldstein, CEO of Loyalty Lab (a company that implements loyalty applications for merchants), and Gary Korotzer, CMO of Red Envelope (a business that specializes in selling gift products), delivered a presentation about loyalty programs. Red Envelope at the moment has a loyalty plan managed by Loyalty Lab.

Loyalty applications are taking off. If you have a retail net website and you do not have some kind of loyalty system...chances are that by the end of subsequent year you will. Jupiter Analysis expects that by the finish of 2007, 78% of retailers carrying out enterprise on the web will have a loyalty plan, compared to 24% now. So what is the big deal?

It charges a lot much more to generate a new client than to sell to a repeat client. Loyalty applications let you to construct a buyer base that is loyal to your merchandise, and will continue to purchase from you, rather than your competitors. A loyalty plan is some type of program that allows your consumers to create up credit to apply to additional purchases, or to redeem for cash. For example, a retail internet site could grant a consumer "points" for each and every acquire he makes. When he has adequate points, he can redeem them for a discount on more merchandise, or possibly redeem them for money.

To implement a loyalty program, you need some way to keep up with your customers' accrued points (or whatever sort of measurement you use). This should be accomplished by maintaining records of a customers' transactions in a database. Goldstein and Korotzer advised tying the details to a customer's credit card quantity. Every time a consumer tends to make purchases with a specific credit card, a record of the acquire is recorded along with the credit card number. In this situation, if a consumer utilized a distinct card than in preceding purchases, her present loyalty account would not receive additional credits.

You ought to try to make it straightforward for a customer to know how several points they have. Out of sight, out of thoughts, as the old saying goes, so make certain your customers are conscious of how many points they have and how several a lot more they need to have to redeem their rewards.

When you start the procedure of deciding on the particulars of your loyalty program (exactly what participants will get, and how significantly they have to purchase for redemption), Goldstein and Korotzer argue that you must discover your company's economics as deeply as attainable. Two crucial statistics to examine are the lifetime value and acquisition expense of your customers. This will much better aid you decide how a lot you can afford to give to your buyers. Another vital consideration is precisely who gets to participate in the program. You may possibly decide on to only extend an invitation into the program to the best 20% (or whatever percentage generates the majority of your revenue) of your consumers. If there is a segment of your client base that represents the majority of your earnings, then it makes sense to concentrate your advertising dollars on that group.

Another point that Goldstein and Korotzer emphasized is that your loyalty system must be cross-channel. In other words, if you operate a physical retail location and take orders by telephone in addition to your net web site, the loyalty system ought to extend to all of the channels. Keep away from confusing your buyers. Make it straightforward for them to gain credits and money in on their loyalty regardless of what channel they use to make purchases.

Loyalty programs have been about for years in certain industries (i.e., airline frequent flyer miles) but are just beginning to gain traction with a lot of retailers. If you sell retail, you must start the process of researching the implementation of a loyalty system now - before your competition does. Feel cost-free to speak to Work Media for info on implementing a loyalty system for your net website. research marketing small business tell us what you think web address