Loyalty programs are a great way to establish and prolong profitable customer relationships. According to Accenture, over 90% of companies run some kind of loyalty program. Harvard Business Review has stated that loyalty marketers increase revenues approximately 2.5x faster than their competitors. Loyalty programs make a difference.
Let’s explore how this works in a marketplace environment:
The foundation of a loyalty program is a two way value exchange between a business and its customer. The more relevant the exchange the more the relationship strengthens.
Now think of the customer as anyone your company touches – end user customers, sellers, your employees and even vendors. Having stronger relationships with each of these constituents will strengthen your business overall.
A marketplace loyalty strategy can and should encompass your customers and your sellers. Recognizing and rewarding these customer groups will yield strong gains. Here’s how:
The fundamental premise of the marketplace is “trust”. Winning customer loyalty via forming trust and meeting customer expectations consistently, each time, repeatedly on transactions, delivery, and service. The trust is built on goodwill and the goal of serving the customer right – which is achieved through:
- drawing insights from analytics and giving personalized offers
- understanding their needs and wants and taking strategic decisions to
- deliver marketing campaigns and messages that resonate with customer values.
Specific benefit to sellers, the marketplace is able to understand brand preferences, purchase preferences, customer buying behavior, and trends across product categories that are not available to single brand programs.
A great example of a marketplace loyalty program is Uber’s Uber Rewards program for customers which is a four-tier loyalty program, level up by availing the service often, wherein drivers are offered Uber Pro, a loyalty program that earns points to be able to obtain bonuses, like car maintenance discounts.
Alternatively, a marketplace can also enable sellers to run their own rewards programs like Amazon and Etsy do. This is a great way to engage sellers because it gives them more control over how they want to foster their engagement with their customers. Also, a loyalty program can essentially be created for sellers or partners only, offering perks, incentives, or other benefits like sales training, to reinforce the connection and ensure the marketplace remains a favorable sales channel.
Designing successful marketplace loyalty programs:
- Marketplace customer loyalty programs should provide enough reasons to attract & engage the members through a combination of personalization, recognition and rewards
- Derive customer insight to understand customer and seller behavior. Then using that insight to deliver personalized value.
- Allow program insights to be accessible to sellers to enhance their targeting, offerings, and incentivize purchase.
- Continue the two way value exchange; the two way dialog across all channels including outside your environment, in social environments.
Reasons to add loyalty to your online marketplace:
- Accelerate Growth – Loyalty programs motivate customers to increase their purchase behavior and not only that, even lower spending customers can be motivated and goosed into action. According to research, companies with strong loyalty marketing programs grow revenues 2.5 times faster than their competitors. Amazon Prime has been a major catalyst for the company’s growth, in fact, it took Amazon from $7B in sales revenue in 2004 to touch more than $107B in 2015. This makes perfect sense since loyalty members buy more often and spend more. Forbes reports loyalty programs increase lifetime value up to 30% or more. Annex Cloud’s Loyalty Experience Platform™ collects zero- and first-party customer data at scale and pushes it across your tech stack. This enables a data-led strategy that allows you to inform your marketing and growth strategies while increasing ad revenue. It also empowers you to create timely, relevant engagement beyond transactions that effectively changes customer behavior in ways that translate into growth. Loyalty allows you and your sellers to really differentiate your customer experiences.
- Understand your customers and sellers – Today’s customers are more empowered than ever. Consider data an ongoing process of understanding your modern customers. Improve your loyalty programs by taking action on your insights. The most successful loyalty programs consider effective data points capturing meaningful behavioral and emotional data. Merging this data with the demographic data your customers share with you by choice will enable you to better identify who your customers are, what motivates them, their purchase history, buying behavior, how you can meet their needs, and how to reward them. Loyalty’s mutual value exchange creates an on-going win-win where, in exchange for sharing personal data, you use that data to deliver unique value to that customer or seller. Annex Cloud’s loyalty solution builds a unified 360-degree profile that can inform recommendations, offers, exclusive benefits, and more.
- Personalize customer and seller experiences – Today’s marketing world is tough, personalization is fundamental. According to SmarterHQ, 80% of customers who shop frequently prefer brands that personalize their shopping experience. Go deeper with your data diving, take past purchases and browsing history to create more personalized messages and experiences. Harnessing the full potential of first party data in your personalization strategy is the need of the hour because a truly personalized experience adds tremendous value and engages your customers with your brand while also ultimately driving real sales for your business. Annex Cloud’s Loyalty Experience Platform offers flexibility to action on any data point or combination of data points allowing you to personalize your message and overall experiences to both customers and sellers.
- Increase repeat purchase, frequency and lifetime value – Loyalty programs are an important aspect in becoming more customer centric and driving stronger, more valuable bonds that translate into repeat purchases and greater lifetime value. Those who return to shop a brand purchase 31% more, on average, than new customers, that’s how important loyal customers are. When customers know that they can earn rewards, special offers, or opportunities they can’t get anywhere else, they will choose your brand each time thus driving repeat purchases, advocacy and referrals. Annex Cloud offers the widest range of engagement options—including gamification, UGC, Refer a Friend, Ratings & Reviews, contests, and more—and the flexibility to leverage different options for sellers and customers.
- Deliver a better experience – One of the main reasons consumers buy through marketplaces is convenience. Optimize the customer experience across various touchpoints, while improving your customer experience, make it personalized and relevant by embracing experience driven commerce. Experience driven commerce can be achieved when you connect with your customers on their terms, meet them when and where they want to be met. This is possible through drawing multichannel data. Deep and meaningful insights into customer behavior and activities help provide relevant and engaging experiences thus maximizing sales. Annex Cloud enables you to embed loyalty messages across their experience including messages around available rewards, rewards earned, and how to hit the next tier across their marketplace experience.
90% of your customers are also shopping with a competitor and 90% of your sellers are selling on other platforms. Give both groups a stronger reason to spend more time and money on your marketplace. Do this through a marketing strategy powered by Annex Cloud Loyalty Experience Platform technology.
For more than 10 years, Annex Cloud has been the worldwide leader in technology and service solutions that transform customer loyalty experiences for organizations, extending valued customer engagement, and collecting valuable customer information for enabling data-led strategies. Powered by the comprehensive and scalable Loyalty Experience Platform™, Annex Cloud customers capture and use zero- and first-party data to seamlessly deliver hyper-personalized experiences across the entire customer journey–from awareness to purchase to retention, loyalty, and advocacy. Brands partner with us to take advantage of our robust platform capabilities as well as get industry expert recommendations that help ensure the success of their loyalty programs. The company is recognized by industry respected organizations like Gartner and Forrester and integrates with 100+ market-leading technologies. Get in touch with us today!