Case Study: How This Loyalty Program Boosted Revenue by 226%

24/09/2018, Marketing, Esther Lowde

In recent years, a wealth of research has demonstrated that online shoppers respond extremely well to ecommerce stores that have a strong loyalty program, are user-friendly and are easy to navigate.

In fact, Bain & Company found that 60-80% of customers who describe themselves as satisfied do not go back to do business again with the company that satisfied them unless they have a loyalty program in place.

Additionally, according to Shopify, the top three influencing factors in the success of loyalty programs are whether they are easy to use, easy to understand and whether they offer impressive discounts to customers.

Want even more proof? Read on to find out how Swanky helped a premium footwear retailer to give their revenue and customer retention a serious boost by overhauling their existing customer loyalty program and improving the user-friendliness of their store’s design.

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When this Shopify Plus footwear retailer initially approached our team, they were looking to boost their conversion rate (the percentage of their website visitors making purchases on their store) and increase their profit margin significantly.

One of the major challenges holding the business back from achieving these goals was their inability to retain customers. This was largely due to their under-performing customer loyalty program, which had few sign-ups and low customer engagement.

If no changes were made, the team knew that they would miss out on a massive revenue opportunity by not utilising their existing shoppers’ brand loyalty, as customers were already regularly checking the website to discover new footwear releases.

With their traffic largely driven through social media advertising, increasing customer retention – and thereby reducing the need to re-market to existing customers – was also crucial for an effective ad spend.

Additionally, the retailer knew that they needed to improve their store’s user-friendliness if they were to reach all of their ecommerce targets for the year.

 

How did Swanky help?

Having established the client’s goals and assessed both their digital toolbox and their website analytics, Swanky were able to gauge customer intent and interactional UX (user experience) problems as well as highlight potential growth opportunities for the business.

After identifying the key problems with the existing layout and functionality of the brand’s online shop, our team quickly got to work implementing a mixture of retention methods to boost customer engagement and to make it easier for new website visitors to browse and purchase footwear products from the store.

This included improving the website’s gender-based and icon-based brand navigation and enhancing the store’s search functionality to make it easier for shoppers to find exactly what they were looking for.

Most importantly, our development team also completely revitalised the brand’s outdated customer loyalty programme.

 

 

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Redesigning the loyalty program

We teamed up with our technology partner LoyaltyLion to create a more customer-friendly sign-up process with more appealing and obvious incentives for new members to join. Our hypothesis was that by providing consumers with a clear and simple incentive to sign up, we would increase our client’s subscription rates.

We also completely revamped the landing page for our client’s new loyalty program. When designing the new layout, we took into account the four key features of the scheme that we wanted to highlight:

 

  • As our client’s brand focuses on new release footwear, we wanted to promote the access to new products that joining the VIP scheme grants customers.
  • We wanted to showcase the exclusivity of the program’s VIP benefits.
  • We also wanted to encourage customers to refer others so that we could grow the client’s user base and sales without any additional marketing spend.
  • By giving customers loyalty points for their birthdays, we aimed to capture more data about them to better personalise their experiences in the future; building a long-lasting rapport between client and consumer and increasing members’ customer lifetime value.

 

The client’s loyalty program landing page before our consultation; text-heavy and with no stand-out offers of customer discounts and member benefits.

 

 

The client’s loyalty program landing page after our consultation; highlighting the benefits of VIP membership and designed in accordance with their specific brand guidelines.

 

Additionally, we wanted all of these perks and features to be displayed above the fold of the page so that they would be the first thing customers would see; attracting their initial attention and encouraging them to scroll down to find out more.

 

Testing the loyalty program pop-ups 

In order to make sure that the changes we were making were going to have the most positive impact possible on the business’ performance, we also began improving the store’s loyalty program sign-up pop-ups through A/B testing.

This process involved comparing different versions of the pop-ups against each other to determine which one performed better (using our technology partner Convert’s testing tool) in order to boost customer sign-up and purchase rates.

 

  

Screenshot from Convert’s dashboard demonstrating the A/B test results for our loyalty program pop-ups. 

 

Our testing clearly demonstrated that of the four potential pop-ups, the one which drove the most sign-ups and customer engagement was the one which displayed the benefits of the loyalty program in one short sentence, featured an immediate call to action with a tangible benefit (“Get £10 off”) and kept its message short and sweet to be less intrusive to customers.

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The winning variant of the sign-up pop-up testing, featuring a strong call to action, an obvious incentive to join and a brief summary of the benefits of the scheme. 

    

Examples of other potential pop-up variants which did not perform as well in tests.

 

“LoyaltyLion, being a nearly native element of Shopify Plus when using their software development kit, was stupidly easy to develop with. All we had to do was tweak the messaging on the pop-up and all of the functional elements were taken care of by LoyaltyLion.” – Dave Shaw, Chief Technical Officer at Swanky

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What were the results?

The positive impact of our team’s efforts became obvious within days of the changes being implemented.

By combining our navigational improvements with a rejuvenation of their loyalty program, Swanky helped our client increase their conversion rate by 61% while upping their website traffic significantly.

As a result, we were able to grow our client’s monthly revenue by an astounding 226% (from £82,000 to over £260,000 per month)!

This was largely due to the new set-up of our client’s loyalty program, which saw 13% of all new subscribers making a purchase within their first 14 days of signing up – and so allowed us to reduce our client’s cost per sale from paid advertising (primarily Facebook and Google Shopping advertising) from $20 to $8.

Essentially, we more than doubled our client’s subscription base and revenue at the same time as significantly reducing their cost of acquisition and increasing their conversion rate

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The client’s Google Analytics dashboard demonstrating an increase in revenue per user, with the blue graph charting sales performance post-update and the orange graph showing performance before the updates were made (during the same period in the previous year).

 

What can other ecommerce businesses learn from this?

Ultimately, our client’s results show that brands who invest in user-friendly website design and a strong loyalty program can safely invest their profits in marketing campaigns for increased traffic – knowing that these new visitors are likely to make a purchase when browsing the store for the first time and will subsequently have a higher customer lifetime value as well.

Once a successful loyalty program has been launched, brands can continue to sustainably grow their revenue and customer lifetime value by introducing new elements to their rewards scheme.

For example, they may introduce a gated VIP collection only accessible by customers who have earned enough points to gain access to the range. Companies may also build customer surveys into their rewards scheme in order to find out more about their buyers’ preferences and so tailor their on-site and email recommendations accordingly.

From here, revenue, conversion rate and customer lifetime value will continue to increase – making implementing a strong loyalty program into your ecommerce store one of the most effective ways of setting your online business up for long-term success.

 

Looking to boost your revenue by increasing your business’ customer retention and lifetime value? If so, please feel free to get in touch with our friendly team today to find out more about how we can help you launch and manage a successful loyalty program for your store.

 

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About the author

Esther Lowde

Esther is Swanky's Marketing Manager and Content Writer. Her blogs specialise in website design, search engine optimisation and marketing strategy, teaching ecommerce store managers around the world how to make the most of their presence online.

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