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e-Commerce sites require loyalty programs

e-Commerce sites require loyalty programs

People may be true to their school or their home team, but they don't show much loyalty to e-commerce Web sites, despite the fact that more than 75 per cent of online shoppers participate in some type of loyalty program, according to a study released by US-based Jupiter Communications.

Jupiter said the survey of 1200 US online consumers revealed that only 22 per cent of them cited loyalty programs as an incentive to buy products or services from a Web site. Consumers placed a higher value on easy returns (40 per cent), customer service (37 per cent) and product selection (37 per cent).

Even the travel industry, which innovated frequent flyer and preferred guest programs, has been unable to effectively extend its retention efforts to the Web, Jupiter said.

"Consumers return to sites where they receive tangible value for being loyal, whether the value is priority service, personalised offers or e-mail updates," said Melissa Shore, a senior analyst at Jupiter. "Commerce players must create an online experience for users in which their customers see transacting on the Internet as a benefit, not a deficit."

At an online travel conference in New York recently, Travelocity.com's CEO, Terrell Jones, said his company creates a personal profile for each of its 19.2 million registered users.

"We know an awful lot about the customers," Jones said. "We know their addresses, their shopping habits, their preferences." And when Travelocity sends direct e-mail to a customer, he added, it makes sure that missive contains information the customer actually wants.

"If you send them a bunch of junk mail, you'll lose them," Jones said. He also stressed that his company handles all of its customer service in-house instead of outsourcing those functions. "In many ways, we're a service company that also sells tickets," he said.

Jupiter's Shore recommends e-commerce companies improve customer loyalty by beefing up customer service and improving response rates, streamlining product research and purchasing navigation and enhancing product information and broadening product availability.


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