How to Prepare Your Loyalty Program for The Holiday Season

August 15, 2018

How to Prepare Your Loyalty Program for The Holiday Period

The holiday period is one of the busiest times for eCommerce retailers. However, for 64% of merchants, customers acquired during the holidays have a lower lifetime value than those acquired at any other time of year. Data also shows that only 6.5% of customers who buy on Black Friday make another order within a month.

Retailers should focus on using the run-up to Black Friday & Cyber Monday (let’s shorten to BFCM) and Christmas to engage and retain existing customers and maximize their spend over the holidays.

From reactivating ‘at risk’ customers and recognizing your most valuable shoppers to encouraging positive reviews and referrals, here’s a month-by-month plan to prepare your loyalty program to connect with your existing customers, and generate more revenue.

Three Months Ahead: Re-Engage Your At-Risk Customers

Re-engaging at-risk customers ahead of the holiday period is far more cost-effective than acquiring new ones. This is the time to look closely at your customer base and determine who hasn’t purchased for a while, so you can bring them back to your brand in plenty of time for the holiday period.

Start with personalized emails, demonstrating that you value your customers and understand their individual buying behaviors. Encourage them to return and shop in advance of the holiday period with content, recommendations and offers based on what they’ve previously purchased.

At-risk customers can also be re-engaged with incentives such as bonus points on particular products you know they would be interested in, or free shipping on their next purchase. If your loyalty program has tiers, consider moving at-risk customers into a higher bracket ahead of the holidays.

Each of these actions shows at-risk customers that you value and understand their individual preferences. Secure holiday spend by ensuring that you have completed re-engagement campaigns well in advance of BFCM and Christmas.

Two Months Ahead: Engage Your Biggest Advocates

It’s increasingly difficult for eCommerce brands to compete on price. Even more so around key discounting periods such as BFCM and Christmas. Brands should do everything in their power to differentiate themselves in other ways to avoid getting caught in a race to the bottom.

According to Ogilvy, 74% of consumers identify word-of-mouth as a key influencer in their purchasing decisions. Even during key sales periods, social proof carries a lot of weight for consumers as they make difficult purchasing decisions. Generating that social proof before the holiday season starts will help drive conversion and sales during periods when others are being forced to discount.

Your most valuable customers (i.e. those who shop frequently and have the highest average order values) are the most likely to act as advocates. Identify this pool of shoppers before the holidays. Motivate them to make referrals by awarding points each time they recommend your brand to friends and family. You can also incentivize them to leave positive reviews for both your products and your store.

The social proof generated by these activities will give you a key differentiator over and above price for customers making online comparisons over the holidays.

One Month Ahead: Check in With Your Loyal Customers

As the sales season draws near, brands need to ensure they are top of mind with their loyal customers. Consumers will be bombarded with marketing messages at this time. However, LoyaltyLion data shows that loyalty emails drive greater engagement, achieving click-through rates as high as 35%. Use these emails to cut through the noise and engage customers as BFCM and Christmas get closer.

Members can be engaged with emails including points statements, available reward notifications, and reminders of how they can earn points during the holiday season. This is also the time to incentivize non-members to join your program. Customers who join your loyalty program are 47% more likely to purchase a second time, so reward signups with points in order to secure repeat purchase once customers start their holiday shopping.

Loyalty emails sent ahead of BFCM and Christmas also provide an opportunity to communicate special member promotions—for example, double points or early access to sales or specific products. These incentives give shoppers a reason to start their holiday shopping with you, over other brands.

Finally, post-purchase emails can be instrumental in maximizing engagement during the holidays. Our data shows that the average basket size of a customer that uses a loyalty reward in a purchase is 36% higher. Encourage customers to return and repeat purchase to unlock more rewards.

Post-purchase emails should be optimized before the sales season starts. Ensure that they include information on the number of points earned with each purchase, as well as rewards available for redemption, and the number of points required to unlock the next reward.

One Month After: Increase the Lifetime Value of Your Newly Acquired Customers

Loyalty programs help successfully retain existing customers during periods of heightened competition. However, they can also drive retention of new customers gained over BFCM and Christmas.

Reconnect with customers who shopped during the sales period but didn’t join the program. Make them aware that points are waiting for them if they become members. Our data shows that customers who redeem points from a loyalty program spend two and a half times more than a non-member and one and a half times more than a member who doesn’t use rewards.

Increase the lifetime value of customers acquired during the holidays by planning double or triple points promotions in the New Year, encouraging them to return for their next purchase sooner. Reduce seasonal slumps that follow BFCM and Christmas by offering program members exclusive gifts if they make their next purchase in January or February. Plan promotions ahead of time to avoid the inevitable sales slump that follows the holidays.

Tie It All Together with Segmentation

Each element of this month-by-month plan requires segmentation of your customer base, using the run-up to BFCM to engage customers in relevant and targeted ways. This will help you to demonstrate to each individual customer that you see them as more than just another holiday shopper. Don’t miss this opportunity to show shoppers that you genuinely value their loyalty and want to build a longer-term connection with them that lasts beyond the holiday season.

About Charlie Casey & LoyaltyLion

Charlie Casey is CEO and Co-Founder of LoyaltyLion, a data-driven loyalty and engagement software for fast-growth eCommerce merchants. Thousands of retailers worldwide use LoyaltyLion to add their own fully customizable loyalty programs and increase customer engagement, retention and spend.  Stores using LoyaltyLion typically generate at least $15 for every $1 they spend on the platform. For help preparing your loyalty program for the holiday period, contact the LoyaltyLion team.

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