Jupiter: Loyalty Programs Aren't Enough to Keep Customers

If you’re counting on “points” or other rewards to keep customers coming back to your Web site, think again. A recent survey from Jupiter Communications reports only 22 percent of online shoppers cited loyalty programs as incentives to purchase.

According to Jupiter, which surveyed 1,200 US online consumers, more basic things like easy returns, customer service, and product selection were more important. Forty percent of those surveyed cited easy returns as an incentive to buy at a site; 37 percent mentioned customer service as a reason for loyalty; and product selection was given as a reason by 37 percent of those surveyed.

While these survey results may seem like common sense, they do serve to shed light on the need for tried-and-true customer relationship management techniques, rather than a reliance on gimmicks like loyalty programs — which should still play a part in the overall customer retention mix.

“Loyalty is not only about loyalty programs, but also about rather unique and differentiated products or levels of service,” said Melissa Shore, a senior analyst for Jupiter Communications.

“Consumers return to sites where they receive tangible value for being loyal, whether the value is priority service, personalized offers, or email updates. Commerce players must create an online experience for users in which their customers see transacting on the Internet as a benefit, not a deficit.”

The Jupiter report suggests that e-commerce players improve customer service response rates, improve site navigation toward a purchase, enhance product information, expand product selection, and make the return process easier.

In addition, Jupiter suggests that e-tailers take a long, hard look at their loyalty program to determine the likelihood of customers actually participating, given that consumers are reticent to join several programs.

E-commerce players should also analyze data they have collected about their customers and use demographic information to determine which are most likely to be return customers. Loyalty and customer retention programs should then be targeted toward those most likely to respond.