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How Can You Increase Sales and Retain Customers at Once?
Your online store needs a boost at the end of the month. Sales are down and visits to your website are declining since the holidays ended. Your store needs a shot of adrenaline. Something to pick up customer visits and spending. But what can you do?
One of the first things you're probably thinking of is offering a sale or promotion on an under-performing product. Boosting sales of this product should help bring up visitors and revenue, right? Well, yes and no. If you choose the right product, generally it will raise your numbers. But for how long? Once that product goes back to regular price, will people still buy it? Will your visitor numbers stay up or go back down to the levels before the promotion?
Typically, once a promotion has ended, numbers return to about where they were, save for those few new customers that just discovered your website. They may add some to the numbers, but probably not too much.
Plus, a recurring series of promotions has the potential negative effect of damaging your brand's perceived value in your customer's eyes. If you're constantly putting a product on sale, they may see that product as not worth the normal retail value. Or, customers may put off purchasing until they see a bigger and better promotion in the future. That can throw off their purchasing pattern for the rest of the year.
So how can you increase sales and visitors without hurting your product's perceived image, or negatively affecting customer purchase patterns? The answer is with a customer loyalty program.
With a customer loyalty program, you can offer your customers a reason to keep shopping at your store. You create a system of rewards for those customers that are recurring shoppers. Offering discounts and other special offers are ways to do this. And with most customer loyalty programs, you can tailor it per customer, so the discounts and offers are staggered.
Still not sure how a customer loyalty program can work? Think of it like an airline frequent flyer program. If you try to fly one or two airlines only so you can collect the frequent flyer miles, then you already know how successful a customer loyalty program can be. Those airlines are rewarding your loyalty with discounts for future flights with them. The same thing can work for your online store.
Another benefit is automation. Customer loyalty programs take care of themselves. Once you have setup your rewards system, the program usually handles everything else for you, from calculating the value of a customer's rewards based on purchases, to offering the discounts.
There's also the fact that while customers may return to your store to purchase again, knowing that they are getting rewards points, not all of them will cash them in for a discount the next time they shop. Their account will just collect their rewards. They will see that they are getting a benefit from being a dedicated customer, and see value in that, but they may actually never take advantage of it.
Plus, anything you can do to differentiate your online store from a competitor is a good thing. When a new customer visits your site for the first time, and sees you have a loyalty program, chances are they will become a regular customer over your competitor that offers no such thing.
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