An online loy­al­ty pro­gram can expand your audi­ence, increase your cus­tomers’ pur­chase fre­quen­cy and order size, and add a new rev­enue stream to your bot­tom line. How­ev­er, it has to be done right. You can’t sim­ply emu­late anoth­er company’s loy­al­ty pro­gram, regard­less of how effec­tive its approach may be.

Today’s con­sumers are going online in grow­ing num­bers to pur­chase a mul­ti­tude of goods that they pre­vi­ous­ly bought in brick-and-mor­tar stores. To suc­ceed in the com­pet­i­tive ecom­merce space, a com­pa­ny needs to estab­lish a strong online pres­ence.

As a recent BI Intel­li­gence report points out, loy­al­ty pro­grams have become an increas­ing­ly pop­u­lar (and often suc­cess­ful) method for doing so among many of the online retail lead­ers. Loy­al­ty pro­grams aren’t the exclu­sive domain of larg­er retail­ers, though; ecom­merce com­pa­nies of any size can enjoy the ben­e­fits they pro­vide – if they know the crit­i­cal fac­tors involved in build­ing them.

Here are three steps you need to take in order to build an effec­tive loy­al­ty pro­gram, and why they’re so crit­i­cal to your suc­cess.

Design Your Program To Fulfill Your Company’s Larger Goals

How does your com­pa­ny mea­sure suc­cess, and how can your pro­gram help achieve those pre­cise goals? Use your business’s key per­for­mance indi­ca­tors, bench­marks, and key dri­vers to deter­mine how your pro­gram can sup­port your company’s main mis­sion, then design your ben­e­fits to direct­ly sup­port those aims.

If dri­ving more repeat busi­ness is a goal, devel­op a range of ben­e­fits that reward shop­pers for return­ing to your web­site and mak­ing pur­chas­es again and again. Be sure to include mes­sages on the trans­ac­tion page that remind mem­bers of their pro­gram rewards and entice non-mem­bers to try the pro­gram.

In addi­tion to increas­ing repeat orders, build­ing cus­tomer engage­ment and boost­ing aver­age order val­ues are pop­u­lar pro­gram goals, but they’re not the only pos­si­bil­i­ties, and they may not nec­es­sar­i­ly be in your best inter­ests.

For instance, if your best cus­tomers’ AOV ris­es slight­ly while your over­all audi­ence remains sta­t­ic, your suite of ben­e­fits may not be serv­ing your com­pa­ny well. Using your cor­po­rate goals to design your loy­al­ty pro­gram will keep your efforts focused on the prop­er pri­or­i­ties.

Constantly Collect, Analyze & Test Program Data

Loy­al­ty pro­grams aren’t “set it and for­get it” endeav­ors; it takes con­stant effort and atten­tion to keep them run­ning smooth­ly and at peak effi­cien­cy. For­tu­nate­ly, they also allow you to gath­er vol­umes of valu­able infor­ma­tion about your cus­tomers.

Embrace the chance to learn as much as you pos­si­bly can about them, and use those lessons to keep improv­ing your loy­al­ty pro­gram – and grow­ing your larg­er busi­ness. Keep test­ing every ele­ment of your pro­gram.

Lis­ten to what the data (and your cus­tomers) tell you, and con­tin­u­al­ly opti­mize their expe­ri­ence based on that infor­ma­tion. Con­sis­tent­ly and reg­u­lar­ly refresh­ing your pro­gram accord­ing to your mem­bers’ evolv­ing behav­iors will help keep them active­ly engaged.

Ama­zon Prime, the biggest and best-known mem­ber­ship pro­gram, launched in 2005 with one ben­e­fit: Free, 2‑day ship­ping. As impor­tant and entic­ing as that offer is to online shop­pers, Prime mem­ber­ship num­bers took off only after online stream­ing video and free Kin­dle rentals were added to the ben­e­fit ros­ter in 2011. Since then, Ama­zon has con­tin­ued to expand Prime ben­e­fits, and even after the annu­al Prime fee was raised from $79 to $99 last year, mem­ber­ship has con­tin­ued to grow at envi­able rates.

Ama­zon prob­a­bly has access to more con­sumer data than any com­pa­ny in the coun­try, but it still offers a valu­able les­son to all com­pa­nies. By con­stant­ly ana­lyz­ing the pur­chase and brows­ing behav­ior of its online vis­i­tors to rein­vig­o­rate the Prime ben­e­fits, Ama­zon has man­aged to retain many of its exist­ing mem­bers and attract mil­lions of new ones, despite the high­er cost.

(By the way, don’t be afraid to charge your cus­tomers for their loy­al­ty. As Ama­zon Prime proves, shop­pers will hap­pi­ly pay to receive ongo­ing sav­ings and oth­er offers if they think those ben­e­fits are worth the price of mem­ber­ship.)

Personalize The Program & Expand Your Audience With Multi-Motivators

Build detailed, behav­ior-based pro­files for indi­vid­ual mem­bers, and use this infor­ma­tion to share rel­e­vant offers and mes­sages spe­cif­ic to each of them. Pro­vid­ing them with instant access to sav­ings on the prod­ucts they pre­fer will dri­ve high­er pur­chase fre­quen­cies, add val­ue to your pro­gram, and enhance their expe­ri­ences.

Today’s con­sumers also expect online com­pa­nies to cater to their spe­cif­ic needs and inter­ests; you need to meet those expec­ta­tions if you want to build brand loy­al­ty. No two con­sumers, let alone demo­graph­ics, are iden­ti­cal. Try a vari­ety of deals and ben­e­fits (i.e., mul­ti-moti­va­tors) to widen your appeal and build a robust mem­ber base.

Again, Ama­zon offers proof of this con­cept. Among its Prime-relat­ed offer­ings, the com­pa­ny mar­kets:

• Ama­zon Mom, which includes Prime ben­e­fits plus sav­ings on baby needs.
• Ama­zon Stu­dent, which offers Prime at half-price for col­lege stu­dents.
• Ama­zon Fresh, which offers same-day and sched­uled deliv­er­ies of gro­ceries and oth­er com­mon house­hold items.
• The Kin­dle tablet and Fire smart­phone, both of which offer easy access to Prime ben­e­fits (a Fire phone pur­chase cur­rent­ly includes a full Prime mem­ber­ship year to entice peo­ple into the pro­gram).

All of these offers dri­ve con­sumers fur­ther into the Ama­zon fold, sup­port­ing its larg­er goal to be “The Every­thing Store.”

That said, any pro­gram that serves more than one demo­graph­ic group can ben­e­fit from a mul­ti-moti­va­tor approach. To do so, pin­point the spe­cif­ic offers and com­mu­ni­ca­tions to which indi­vid­ual mem­bers and larg­er seg­ments respond (and don’t respond), and scru­ti­nize non-mem­ber cus­tomer data to see what does and doesn’t moti­vate them. Based on all of this:

• Test new deals and mes­sages.
• Adjust your ben­e­fits accord­ing­ly.
• Revise your pro­gram strat­e­gy as your audi­ence changes and grows.

Summary

Loy­al­ty pro­grams are increas­ing­ly pop­u­lar tools across all seg­ments of ecom­merce, from gro­cers and depart­ment stores to research ser­vices, enter­tain­ment out­lets, and many, many oth­ers. These pro­grams have been shown to dri­ve high­er cus­tomer spend­ing, expand audi­ences, and bring in new rev­enue, but to achieve max­i­mum effect, you need to keep three things in mind:

1. Your pro­gram must sup­port your larg­er com­pa­ny goals.
2. You need to con­tin­u­al­ly opti­mize the pro­gram through ongo­ing test­ing, data col­lec­tion, and analy­sis.
3. You should use mul­ti-moti­va­tors to ensure that you appeal to the largest audi­ence pos­si­ble.

Is your brand or busi­ness enjoy­ing the ben­e­fits of an effec­tive loy­al­ty pro­gram? What have you learned about loy­al­ty pro­grams?