Customer loyalty is hugely important. Research shows that it can cost up to 5 times more to acquire a new customer than to retain an existing one. At the same time, an increase in customer retention for as little as 5% can have a huge influence on companies’ profits.
Good digital marketing practices can have the same impact as face-to-face interactions, so merchants have resorted to specific methods to gain their customers’ trust.
In last years, Social Media has had a huge effect on the way a brand can engage with its customer base, as it allowed them to become brand ambassadors in their social circles.
Another way to engage with customers was by creating an online help section. This way, customers were able to get help without the hassle of waiting on a phone line. Email forms, chatbots, and other online contact options have become the minimum requirement for an online business.
Reviews allow customers to express their opinions, stimulating the decision to buy, and increasing confidence in new customers.
Magento Commerce comes packed with features like Wish lists, Private events, and gift certificates. Social Marketing can easily be achieved with a variety of extensions available in the Magento marketplace.
But one of the most powerful way to increase your brand loyalty is through loyalty programs. Customers spend more time and money with the brands they’re loyal to, not to mention that they also tell their friends and colleagues about those brands too, which drives referral traffic and word-of-mouth marketing.
This can be done in many ways, may them be through email coupons, loyalty points, free shipping, or “Buy one get one free” campaigns.
All of these are done seamlessly by Magento Commerce, but this time, let’s have a more detailed look at how businesses can use it to grow their brand loyalty through loyalty reward points.
The first step is to implement the common customer tier approach, based on customer segmentation through their yearly spending. These segments will then be used as conditions for variable experience elements such as Dynamic Blocks and Promotion eligibility.
A Loyalty Points system will then be implemented, where spending earns points with redemption value. This can be done with the Cart Price Rules.
Once the customer has triggered the set conditions, the reward points will be saved in the customer’s records. Reward points can be assigned a specific currency value, so customers could use them to purchase specific items.
This is a simple example of how Magento can create loyalty programs to suit your business needs.
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