A massive piece of the customer loyalty puzzle is value. Not only value but a tangible value that customers can easily identify.
An enticing, attractive, and thoroughly rewarding customer loyalty program can go a long way toward forging a key point of differentiation for any brand.
And for Peter Cobb, c-founder, executive vice president marketing for eBags.com, because his company is a pure play means that it must win over customers with loyalty.
People are more value-oriented now than ever, Cobb noted.
“And they view the loyalty program as a huge representation of that value they so desperately seek on a daily basis,” Cobb explained to Loyalty360. “Combine that with free shipping and frequent discounts and customers are saying you make it so easy to shop with you. People want to get in, make their purchases, and get out with someone they trust. We really bend over backward to have that simplicity in place. We’ve always had an amazing customer experience. It’s about lifetime value. We need them to be loyal.”
A few years back, eBags relaunched its Rewards customer loyalty program that had existed for eight years but was dormant for about five. Due to the reality of skyrocketing marketing and customer acquisition costs, Cobb said differentiating via a loyalty program is a necessity for any successful marketer.
“A loyalty program successfully implemented is one of the top ways to differentiate today with marketing costs as expensive as they are,” Cobb explained, “and with consumers having so many options. Consumers are more tech-savvy in the shopping environment and a loyalty program is one of the key ways to increase customer engagement.”
Cobb said the company had an “adequate” rewards program before then but didn’t feel it was robust enough or flexible enough.
“We just felt like it was time to really go after people and try and get them to come back more often and put a shine on some of the elements that needed it,” he said. “We did benchmark other programs like Overstock.com, Drugstore.com, Moosejaw, and Amazon. Most of the input we had on changes was internal, and not from customers. We decided to rely less on paid marketing partners and more on free traffic (loyal customers and customer database).”
Cobb described some of the loyalty program improvements as “blocking and tackling” items to “make it easier to let people know they have points, how many they have, and do a better job of institutionalizing the program within eBags.com. We have a very simple thing. A window shade comes down and exposes a number of active points a member has. Every email that goes out has the member’s amount of points in the header.”
Before the relaunch, Cobb said customers viewed the rewards loyalty program as an email program.
“We realized we needed to treat these people differently and give them extra incentives,” he said. “Why don’t we give bigger discounts to people who have been loyal to us? Our feeling is once somebody purchases three times, then their lifetime value goes up.”
Cobb is proud of eBags.com’s thriving loyalty program.
“We’ve stuck with a rewards program that is similar to a traditional airline miles program,” Cobb said. “I think it’s time we branch out from that and add other benefits to it like Amazon Prime does. We’re hoping to do that. We’re looking at tier levels. Frankly, we’re trying to make it more rewarding.”
Sales from loyalty program members are nearly 50% higher than from non-members, Cobb said.
“It’s what you hope should happen,” Cobb said. “People in the program are incentivized. We’ve had a bump in new customers and in lifetime value, and repeat sales rate has improved double digits.”
Ebags.com also has adopted Refer-A-Friend (members receive $10 in rewards points when they refer a friend, and the friend receives 15% off first purchase).
Since the relaunch of the company’s loyalty program, Cobb has noticed a change in customer behavior from a significant migration to mobile, specifically smartphones.
“We’ve been able to integrate into our email program how many reward points you have at any given time,” Cobb said. “We send over 1 million emails a few times a week. You couldn’t have done that a few years ago. It’s getting more and more competitive. You have to have a killer shopping experience. Once they come in, you have to wow them with a memorable customer experience.”