Monthly Archives: March 2012

We’ve found that merchants spend a significant portion of their budget on (expensive) customer acquisition. eMarketing is now at a point where, if you have a large enough budget, you can get customers to visit your site and purchase. Most merchants have a strategy for getting customer attention on their website. But surprisingly they don’t have an effective strategy for making these new potential customers into loyal customers who will make repeat purchases and refer new business.

Here we’ll show you how to take a new visitor and turn them into a frequent purchaser and source of new customers.

First, let’s determine what our customer process is, and rank customers in each stage according to how valuable they are to us. Once we do this, we can observe our customers as a funnel from least to most valuable over a lifetime:

Visits the site once

Visits the site often - but doesn't buy

Makes one purchase

Makes one purchase, considering second purchase in the future

Makes multiple purchases

Makes multiple purchases and refers other customers

Now that we are able to rank the value of a customer, our goal should be to take a customer from the top of the funnel to the bottom of the funnel. How do we do this?

By giving an exceptional reward for their first interaction, you can significantly increase the probability of a second purchase.

By immediately giving your customers a reward that they perceive as exceptionally valuable, you are increasing the likelihood of a customer moving from Stages #1-4 to Stages #5+, and are therefore increase the value of that customer.  This may seem trivial at first, but this simplicity sometimes gets lost in a loyalty program’s initial planning phases.

Here are some examples of how you can create an exceptional initial reward and increase the value of your customers:

 

Reward for sign-ups

How much would you pay to develop your email list? How much is a gold lead worth to you? By acquiring customer information you gain some powerful remarketing options. An anonymous guest user is nowhere close to the value of a customer with an account - even if neither have purchased. So capturing this information is extremely important. You can reward for sign-ups with Sweet Tooth by creating a customer behavior earning rule that gives customers points when they sign-up to the store. Make sure your visitors know about this rule by actively promoting it somewhere prominent on your website so every new visitor sees it. Make it a flashy with a great call to action and watch your customer accounts skyrocket.

 

Multiply the amount of points for the first purchase

You can advertise to your new vistors a 10X bonus points for their first purchase at the store. Your customers perceive that they are being exceptionally rewarded for their first purchase. While these kind of multiplier campaigns are usually used to promote the initial purchase, they can also give customers interest in making the second purchase - in order to spend their newly acquired points balance. Make sure that you give them something that they can almost purchase with their new points. With Sweet Tooth, you’ll need to set up two rules to do this. First, set up your base rewarding rule. This will be the rule that every customer gets every time they purchase. Then create an Earning Rule that earns 9X the regular points amount (this is the bonus), make sure you set the maximum customer uses to "1" to reward only the first purchase. Now your customers will earn 10X points on their first order and 1X points on every subsequent order, and feel exceptionally rewarded.

Show a dollar amount value for the first purchase

Your new visitors might not the value of points. One technique we've seen many stores using is to actually display a dollar value of the points being earned on first transactions. This might look like "Earn $20 in store reward dollars when you make your first purchase". You can accomplish this with Sweet Tooth by creating an earning rule, then modifying the design templates to display monetary currency instead of points. Alternatively (and less expensively), you can just advertise the dollar value of the credit they are going to receive. Either way, if you effectively communicate the value to your new visitors, you will see an increase in purchases.

 

Try rewarding for the first AND second purchase more

Instead of just exceptionally rewarding customers for their first purchase, why not reward them more for their second purchase as well? That might be just enough to get the customer in the habit of buying at your store. In fact, you can set up a tiered earning system so that your more regular customers, who already love your store, aren’t taking too much away from your margin. With Sweet Tooth, this type of campaign can be configured by creating Earning Rules and setting the maximum customer uses to "2", then “3”, etc. Note: don’t just set up linear points earning rules and forget about your loyalty program - make sure that you keep things interesting by having special points promotion weekends, and double points items, for example.

 

Decrease the spending points cost for the first purchase

Once we have customers purchasing multiple times, we need a boost in customer experience in order to get them to our #5 position. To do this, we will give them a full customer experience - one that includes spending their points. Give customers 2x the discount the first time they spend their points, and ensure that the first full customer engagement (discovery>purchasing>rewarding>spending) they have is a positive, enjoyable experience. This will incentivise customers to come back to the store a second time to spend their points on another purchase. Sweet Tooth can allow for an increased first spending discount by creating a spending rule and setting the maximum customer uses to "1", similar to the way we set up the earning rules.

 

Ask your customers for referrals

Now that our customers have had a full experience, and are completely satisfied with our products and services, it’s time to motivate them to become the most valuabe customer: #6 (a referring customer). 75% of customers trust recommendations from their friends & family more than any other type of advertising. This means that an effective referral is the most effective type of marketing. Setting up a referral program is easy to do with Sweet Tooth. Make sure that you not only reward for a referral’s first purchase, but also for a referral simply signing up (remember what we said in “Reward for sign ups”). If you want to create a full affiliate program (where every referral purchase is rewarded), you can also do this here. Regardless of how you choose to reward referrals, they’re important. This brings us back to where we started with this article: customer acquisition. Organic growth via referrals and word of mouth are an underused tool for most eCommerce websites. If we invest in a positive & complete customer experience, we can reap the rewards of a growing customer base. Companies like Zappos are perfect examples of organic growth by turning their existing customers into promoters.

There are several other ways you can reward customers for their initial interaction. If you can think of any other creative ways, be sure to share with us by commenting below. It's clear to see that the initial interaction is an important one, and if it's handled correctly by the merchant, it can result in a long term, massively valuable customer.

The following is a guest blog post by Nathan Ciprick of Sweet Tooth partner Points.com. Nathan attended PrestaShop's Barcamp.5 to get a sense of the PrestaShop community.

 

 

PrestaShop landed in the U.S. this past week with an intimate conference in SOHO, NY.  While it may have been a smaller event than some other shows, it had an energy that seemed larger than expected (especially from their own people!)

Barcamp.5’s latest feature on the French-based five year-old company PrestaShop was meant to be their stake in the ground in the North American market, but it was also used as a team-building event for the company.  They brought the whole gang to New York on Saturday, giving them a few free days to explore the city, before getting down to business on Tuesday.

To me this was symbolic of the strength with which PrestaShop intends to merge into the North American market.  More on that later.

When I arrived early to set up my booth I was greeted by no less than four employees with genuine, welcoming “Hello’s” (not to mention some charming French accents).  This right away was a different start than any other conference I’ve attended.  Usually its hired event staffers who meet you with the warmth of a big box store greeter.  It was unique.

Who am I?  Why was I there?  Glad I asked.

I’m Nathan Ciprick, Director of Consumer Products for Points.com.  Very briefly, Points Intl. powers key parts of the loyalty business for many of the world’s largest airline, hotel and retail chains.  Chances are if you hold one of their cards, we play a part in it.  Points also has a corporate program which allows companies to purchase volumes of points/miles to distribute to their customers or employees to reward behavior.  Lastly, I head up Points.com, a consumer portal which allows users to track their balances, trade or exchange points/miles, and redeem their balances for gift certificates, online subscriptions, and more (more = points/miles converted to PayPal money, the first of its kind).

Also in that ‘more’ category is Points.com’s entry into the e-commerce space, and the reason for us to travel to New York from Toronto to the PrestaShop show.  Internally called, “Distributed Earn” and part of ongoing move into an externally focused e-commerce plan, Points.com now gives merchants of any size the ability to reward their customers with loyatly currency from some of the world’s largest loyalty brands.

Such as?

Ok, since I asked: Alaska Airlines Mileage Plan, American Airlines AAdvantage, Best Buy Reward Zone, Frontier Early Returns, Hawaiian Airlines Hawaiian Miles, Icelandair, Priority Club Rewards, U.S. Airways Dividend Miles, and Virgin Atlantic.  And more to come.

Points.com has partnered with Sweet Tooth Rewards as the platform that merchants install through PrestaShop.  With that single install, they then have the choice of loyalty currency: either create a white label self-serving brand through Sweet Tooth, or use Points.com’s integrations to the above mentioned loyalty brands.

My intent at the PrestaShop show was to hear what they and the other speakers attending had to say about the e-commerce space, to meet with merchants who are PrestaShop users or looking to be converts, and to see the landscape of other service providers circling the PrestaShop world to see how we can interact.

For what was available I felt I had success; so thank you PrestaShop.

This Barcamp presentation was put together quickly, within 90 days, and they’ve already stated they intend to have a larger show presence later in the year with stronger marketing support.

North America is in their sights to conquer.  Where their geographic stamp stands right now is: 14% North America, 6% South America, 66% Europe, 1% Africa, 12% Asia, 1% Australia.

Prestashop has impressive growth: 200 stores in 2007, and now 120,000 stores so far in 2012.

They have varied leadership: Founder/Co-CEO Bruno Leveque as the young brain behind the original idea and code, paired with Christophe Cremer with a strong business acumen to lead [I’m missing the accents on their names; apologies].

They also have big plans.  I paraphrase, “This Barcamp session is held in the same building where Facebook first announced themselves to the world.”

So lets get into the show, who was there, and what they were saying.

“PrestaShop is very easy for a merchant to get up and running with limited technical barriers.”

“I only develop for PrestaShop.”

“PrestaShop’s has proven they’ll keep innovating to provide me more to give to my clients.”

I spoke to a few system integrators who work solely with PrestaShop.  Personally, I am not handing them the crown just yet.  They have steep competition from others who are already doing a fantastic job delivering e-commerce solutions to online merchants.  I’m also not saying that just because Points.com works with these other merchant networks as well.

We are agnostic and want everyone to do well.

Different problems have different solutions.

PrestaShop knows they need to impress themselves upon the Enterprise-size companies to make a quick and noticeable dent in their competitions lead.  They know they need to gather many (many) small to medium sized merchants to organically grow their N.A. presence.  They know they need to put on a grander show to really splash into the scene.

But I also know that Points.com and Sweet Tooth intend to come along with them.

While I wish there were more merchants to show off our Points.com solution to, I know I saw lightbulbs go off over the heads of the other developers there when I told them of our offering.  The wheels turned on how we could work together.

I also appreciated the intimate setting/opportunity of the event to personally get to know some of the staff, community managers, and developers that will also help me succeed along with PrestaShop.

Authorize.net, their Platinum sponsor, gave an insightful talk on notable trends in e-commerce.  Templatemonster.com demonstrated how they believe in this space as well, since they lead the innovation of making it easier for companies with small budgets to become online players.

There was also a nice presence from System Integrators like komilfo and Carolina Custom Designs who are experts at bringing merchants into the PrestaShop e-commerce space.

I left the show feeling I achieved my goals. I know I gained a greater insight into PrestaShop’s world, and world domination plans.  And I am increasingly encouraged that Points.com is continuing to play a significant role in loyalty and the evolving e-commerce space.

Watch for Sweet Tooth and Points.com to be major players in your purchasing power, today and tomorrow.

We can't wait for Magento Imagine this April! We're sponsoring the conference, and hope to have a blast with the whole Magento community. We'll be giving away some awesome swag (hint: you'll be much cooler with them, except at night).

We're also running in the Pre-Imagine Run with the rest of the Magento community runners. To get ready for this some of us are running on treadmills and outside, while others prefer to eat hamburgers to "carbo-load".

In addition to training for the Magento run, we are also training for the Las Vegas lifestyle. A film crew documented our Vegas training...watch it here and let us know if you think we're ready!

At Sweet Tooth, we've seen thousands of retailers implement loyalty programs. We've seen them all; some big, some small. Regardless of their size or budget, the most successful loyalty programs always have certain elements in common. One element that seems to boost a loyalty program from okay to highly successful is Customer Engagement!

What does high customer engagement for a loyalty program mean?

When designing a loyalty program, you need to make it an integral process of your customers' experience. It isn't enough to simply give your customers the ability to earn & spend points; you need to put it in the front of their mind.

When we say an integral process in customer experience, we mean it! Don't just make your customers see your loyalty program, make them want to interact with it. Make it fun and desirable. Make it so that a brand new customer notices it, and a returning customer would miss it if you removed it.

Where can we see this kind of high engagement success?

At some gas stations in the USA, loyalty members can roll-back the cost of the gas right at the pump. That's right, they can swipe their card to spend their points, and the cost of gas actually decreases on the pump. What's great about this loyalty program is that customers are reminded of it every time they buy gas. The positive feeling of spending points to receive a discounted rate on gas is transferred to every purchase at the gas pump that customer makes. So even when the customer doesn't have enough points to discount their gas, they still feel excited about the future - when they be able to. While it sounds simple, it is surprisingly effective; this loyalty program has displayed significant lifts in customer spending & satisfaction.

What can I do with Sweet Tooth to engage customers more?

One of our most successful features that works just like the gas pump discount is our "Points Slider." The point slider allows customers to play with their points before they've even earned them. When a customer - even a new one - sees the point slider they can actively engage with your loyalty program and instantly see its benefits (a decrease in product price). By making the discount an engaging and fun process, customers will be more than happy to get to know, and participate in, your loyalty program.

Another way to make your loyalty program engaging is to tell customers when they have earned points. A simple notification is all it takes! With Sweet Tooth, you can always display a (customized) message to your customers when they earn points. Make it positive and tell them what they have just earned. "You've earned 30 points for Liking this on Facebook - 200 points gets you a free tshirt!"

If you've got any other ideas about how customers can be engaged more and suggestions for features to add to Sweet Tooth, be sure to let us know! We'd love to hear from you!

Every Friday we'll post the best five articles related to loyalty, customer experience, and eCommerce from that week. Have a suggestion? Contact us here!

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1. 25 Ways to Honor Your Customers

Do you have a great customer experience???
Just because this is simple, concise and straightforwards doesn't meant that it is any less true. 25 rules that businesses need to live by if they want to deliver a great customer experience.

2. The End of Bricks and Mortar As We Know It

We definitely recommend you check out this post. It is one of the coolest blog posts on the consumer shift from instore purchases to a more complicated purchase process. Also it includes two cool videos, one of which demonstrates a virtual shopping mall in a South Korean subway station that has turned "waiting time into shopping time."

3. Calculating Customer Lifetime Value in Magento

Put together by Demac Media of Toronto, this practical & simple post shows you exactly how to calculate your CLV using a mysql query. This is extremely useful for any marketers on Magento. If you aren't familiar with CLV, check out this supplementary post to understand why it is so important.

4. Creating A Cross-Informed Customer In A Multi-Channel World

If you've seen our presentation video from Meet Magento UK, you'll know that we believe today's consumer no longer remains in one purchasing channel or another, but rather hops in between channels on what is becoming an ever increasingly complex purchase path. Consumers might hear about your brand on Twitter, research your products on their laptop, visit your store to demo a product, then purchase on their mobile while waiting for a train. This article gives you some great advice on how to best approach this new customer.

5. 11 Tips for Entrepreneurs on Dealing With the Press

Clearly, you're going to be a retailing all star...after all, you're reading this blog! So we thought that we'd prepare you for how to deal with the massive press storm that is bound to be sweeping your way in no time!

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Thanks for reading, join us next Friday for another selection of the week's best articles. Thanks to everyone who submitted articles last week, topic and article suggestions can be submitted here!

Hey loyalty fans!

Sweet Tooth 1.6.1.0 is now available for download!

There are some great changes in this release: Sweet Tooth is now entirely plug-and-play, with content auto-integration enabled by default; the translation CSV has been updated with all our latest phrases; and many other significant bug-fixes and improvements.
You can see a list of changes in this version on our change log available through the Sweet Tooth wiki.

To update, you can either download this release directly from our site, or contact the support team to get a copy. In both cases you'll need an active license key.
If you're updating to Sweet Tooth 1.6 for the first time, please take note of these additional steps.
Happy rewarding!