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This is the 1st in a series of articles we will be publishing relaying thoughts and concepts from the Net Retailer Conference in Chicago, which occurred June 5th via June 7th. Mark Goldstein, CEO of Loyalty Lab (a company that implements loyalty applications for merchants), and Gary Korotzer, CMO of Red Envelope (a firm that specializes in selling gift items), delivered a presentation about loyalty applications. Red Envelope at present has a loyalty plan managed by Loyalty Lab.

Loyalty programs are taking off. If you have a retail internet site and you do not have some kind of loyalty program...chances are that by the finish of next year you will. Jupiter Analysis expects that by the finish of 2007, 78% of retailers undertaking business on the internet will have a loyalty program, compared to 24% now. So what is the massive deal?

It costs a lot far more to generate a new consumer than to sell to a repeat customer. Loyalty applications enable you to develop a customer base that is loyal to your products, and will continue to obtain from you, rather than your competitors. A loyalty plan is some kind of program that enables your customers to create up credit to apply to additional purchases, or to redeem for cash. For instance, a retail web web site could grant a client "points" for each and every obtain he tends to make. When he has enough points, he can redeem them for a discount on far more merchandise, or possibly redeem them for money.

To implement a loyalty plan, you require some way to preserve up with your customers' accrued points (or whatever sort of measurement you use). This ought to be accomplished by maintaining records of a customers' transactions in a database. Goldstein and Korotzer suggested tying the information to a customer's credit card number. Each and every time a consumer makes purchases with a particular credit card, a record of the purchase is recorded along with the credit card number. In this scenario, if a customer utilized a distinct card than in preceding purchases, her existing loyalty account would not get additional credits.

You should attempt to make it simple for a consumer to know how a lot of points they have. Out of sight, out of thoughts, as the old saying goes, so make sure your buyers are conscious of how several points they have and how several a lot more they need to have to redeem their rewards.

When you begin the approach of deciding on the particulars of your loyalty plan (specifically what participants will get, and how significantly they have to buy for redemption), Goldstein and Korotzer argue that you ought to explore your company's economics as deeply as achievable. Two crucial statistics to examine are the lifetime value and acquisition price of your buyers. This will greater assist you determine how a lot you can afford to give to your clients. An additional important consideration is specifically who gets to participate in the plan. You could pick to only extend an invitation into the plan to the top 20% (or whatever percentage generates the majority of your income) of your consumers. If there is a segment of your client base that represents the majority of your revenue, then it makes sense to concentrate your marketing and advertising dollars on that group.

One more point that Goldstein and Korotzer emphasized is that your loyalty program should be cross-channel. In other words, if you operate a physical retail location and take orders by phone in addition to your web website, the loyalty system must extend to all of the channels. Steer clear of confusing your buyers. Make it straightforward for them to obtain credits and cash in on their loyalty regardless of what channel they use to make purchases.

Loyalty programs have been around for years in particular industries (i.e., airline frequent flyer miles) but are just starting to gain traction with a lot of retailers. If you sell retail, you ought to start the method of researching the implementation of a loyalty program now - ahead of your competitors does. Feel totally free to get in touch with Function Media for data on implementing a loyalty plan for your web site. [http://www.linkedin.com/in/steveiervella partner sites] [http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=160868535911 marketing a small business critique] [http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=160868535911 marketing for small business]

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