With large portions of the marketing budget dedicated to acquisition tactics such as search marketing and social media, customer retention often takes a back seat.
But one strategy has bucked the trend and caught on: loyalty or free shipping clubs — paid membership programs that offer participants exclusive benefits, starting with discounted or free shipping. There’s a reason these programs are increasingly commonplace: they’re proven to drive repeat business.
According to industry researcher Forrester, participation in free shipping clubs grew by a third from 2010 to 2011 — from 9% to 12% of U.S. online consumers. And of those participants, 66% say they plan to shop more with the brand whose club they’ve joined.
If your brand doesn’t yet offer an online loyalty club, now is the time to consider adding one — it’s a big investment, but one with the potential to pay off handsomely. If you already have a program in place, maximize its effectiveness and profitability with these best practices:
Put shipping front and center — but play it smart. Shipping costs remain the top reason consumers abandon online shopping carts, so giving loyalty club members a shipping price break makes sense. To offer value while maintaining margins, consider these tactics:
- Make it a flat rate. Taking the variability out of shipping costs may be enough of an incentive for your customers to join the club. Assigning a flat, low rate for ground delivery eases the purchase process for them by making total order costs easy to calculate.
- Offer “free” strategically. Rather than defaulting to free shipping all the time, consider offering club members generous, but periodic, free shipping windows — for the month of their birthdays, for example, or for the last two months of the year for holiday gift purchases.
- Sweeten the deal for the holidays. Whatever your default offer, give loyalty program members an even better discount during the peak holiday season — free expedited shipping once the ground shipping threshold has passed, for example.
Round out the package with other benefits. While shipping discounts may be a primary driver of loyalty club membership, you can increase participation — and compensate for not offering free shipping by default — with a bevy of other enticing benefits. Consider offering members:
- Advance notice of sales, particularly when stock is limited.
- Advance notice of sought-after new products.
- A discount on every order, exclusive discounts throughout the year, or additional discounts during major sales.
- Access to members-only events in stores.
- Exclusive opportunities to give feedback, such as customer advisory panels.
MarketLive merchant Title Nine puts it all together to offer new members free shipping on their first order, combined with flat-rate shipping for the rest of the year, along with a 5% discount on orders and other benefits. Club T9 is given prominent placement in the shopping cart, where consumers are enticed by the promise of instant free shipping.
Promote the program everywhere. To drive maximum participation, give your loyalty program prominent placement throughout the eCommerce Web site and beyond. Feature it:
- Side-by-side with links to shipping information. Wherever shoppers can consult shipping rates, they should also see a promotion for the loyalty club — on product pages, in the customer service section, and on the shipping rates and information page itself.
- In the shopping cart and through checkout. Let would-be buyers know that they can score a shipping discount instantly if they join the club.
- In post-purchase transactional emails. When sending customers notice that their items have shipped, let them know they can save on shipping costs for their next purchase if they join the club. Post-delivery, include an invitation to join the program along with an invitation to submit a customer review.
- On social networks. Let brand followers know they can reap even better deals and score shipping discounts by joining the loyalty program; enable purchase of gift memberships directly from Facebook.
Spell out the benefits clearly — and repeat the message. Create a product page for memberships on the eCommerce site that lists benefits prominently and includes all the related fine print, such as whether subscriptions renew January 1 regardless of signup date. Be up-front about restrictions on free shipping: are gift orders included? How about international or corporate orders? Is there a minimum purchase amount? Once customers have bought a membership, follow up with a detailed “welcome” email that reiterates all the policies and procedures, including how they can log in to take advantage of their discounts and access their account information.
Wine.com aggressively promotes its StewardShip program throughout the eCommerce site, with links to program information from product index pages as well as from the shopping cart, where the difference between the estimated shipping cost and the program membership is displayed so consumers can see how much more they have to pay to join. The program is explained on an attractive page that lists comprehensive details and links to frequently-asked questions as well as member testimonials.
Do you offer a loyalty or free shipping club? What tactics do you employ to boost membership?