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Web Only Loyalty Programs

Posted on 12.31.2014

By Amberly Dressler, Managing Editor

Loyalty programs, those which reward customers for repeat actions including visits and purchases, are no longer exclusive to local retailers or large multi-national corporations with a “brick-and-mortar” presence.

The availability of such loyalty solutions is helping digital enterprises optimize their customer retention efforts, as well as generate greater profits for retailers, service providers and information publishers without an actual physical location.

500friends

Recently acquired by Merkle, a customer relationship management (CRM) agency, San Francisco-based 500friends is a cloud-based omnichannel loyalty solution. Web-only retailers need not be scared of its “omnichannel” stance, however, as notable companies including 1-800-Flowers and Omaha Steaks are leveraging the platform to drive retention and increase customer lifetime value (LTV).

500friends provides a potentially valuable service as it allows its retail customers to customize point earning/redeeming for its users/members, while using their own branding (thanks to 500friend’s white-label offering). 1-800-Flowers, for example, runs “Fresh Rewards,” where members earn points for every dollar they spend, which can be redeemed across its family of brands (like The Popcorn Factory).


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Depending on the loyalty program objectives, however, brands can allow members to not only earn points for purchases, but also from engagement activities (e.g. leaving reviews or sharing links on social media). 500friends also supports a variety of other loyalty tactics.


500friends client Build.com, for example, encourages its members to earn points to unlock badges (through gamification layer) by completing actions like making two purchases in 30 days, referring friends that make purchases, opening emails and even clicking on links. For the unfamiliar, gamification incorporates traditional game elements like levels, badges, points and leaderboards to motivate participation. For businesses, these activities not only encourage recurring customer activity and assist with acquisition efforts (through referrals), but they also provide them with customer profile data.

PunchTab

A software-as-a-service platform, PunchTab empowers retail and consumer packaged goods (CPG) brands to engage customers and gain actionable insights. It counts big names like Arby’s, The History Channel and Energizer as clients, and, most recently, PURELL, which hoped to understand why people buy its hand-cleaning products, educate consumers about hand hygiene and increase overall brand awareness.

While PURELL is, of course, sold in stores, its loyalty program is Web-based and, for the first time, gives PURELL a direct relationship with its customers. Members can earn points by completing their profiles and participating in surveys (giving PURELL access to direct data about purchase frequency, motivations, etc.), reading hygiene-related articles, exploring new products, watching videos, following PURELL on Pinterest and more. Members can redeem their points for coupons, products and gift cards.

PURELL’s loyalty program offers several takeaways for Web-only businesses. First, it encourages users to register using their Facebook accounts, which gives PURELL access to public profile information and users’ email addresses (if that specific opt-in box remains checked). Finally, PURELL motivates members to complete the daily point-earning incentives by marking actions as complete, which provides immediate gratification and positively reinforces members’ actions.

(Using the PunchTab loyalty platform, PURELL is able to connect and learn about its consumers directly without relying on third parties.)

Joining the Club

According to the Consumer Loyalty Survey conducted by Hotels.com, more than one-third of Americans participate in brand loyalty programs. This means that consumers are not only familiar with the give and take of such programs but, more importantly, are more than willing to participate. As more consumers research and shop online, this means that Web-only businesses (of all sizes) will need to pair themselves with a loyalty platform to earn customers’ digital loyalty, which is clearly up for grabs.

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