How Loyalty Can Help Merchants Survive The 'Opt-Out Era' | #128 Fiona Stevens

In this episode of the Ecommerce Coffee Break Podcast, I talk with Fiona Stevens, Head of Marketing at LoyaltyLion.com. Our discussion focuses on the opportunities loyalty programs can bring to businesses. Hint: It's so much more than just giving your customers points.

On the Show Today You’ll Learn:

• How can you make your customers to stay loyal?
• How can a loyalty program help in this modern upgrading world?
• Ideas to make your brand more personalized for your customer
• How can your given points as a brand to your customer can be worthless?
• How often do you think do you need to get in touch with your customers?
• And more

Fiona Stevens is the Head of Marketing at LoyaltyLion at loyaltylion.com, a data-driven loyalty and engagement platform for fast-growth ecommerce merchants. Fiona has 14 years experience in Marketing, having worked in-house and agency side across functions including PR, SEO, and content. She has specialized in loyalty for retail and ecommerce brands for the past eight years and loves to talk about retention and driving revenue from existing customers.

Links & Resources

Website: https://loyaltylion.com/
Shopify App Store: https://apps.shopify.com/loyaltylion
LinkedIn https://www.linkedin.com/company/loyaltylion/

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Transcript

Claus Lauter: Hello and welcome to another episode of the E-Commerce Coffee Break. Today we wanna talk about Loyality programs. Wanna find out what opportunities can [00:01:00] loyality bring to you, and usually it's much more than just giving your customers points. So we wanna find out a little bit more about this Kette. Aha.

Fiona Stevens with me. She is the head of marketing at Loyalty line@loyaltyline.com. A data driven loyalty and engagement platform for fast growing eCommerce merchants. Fiona has 14 years experience in marketing, has worked in in-house and agency side across functions including pr, seo, and content. And she has specialized in loyalty for retail and e-commerce brands for the past eight years.

So definitely the right person to talk to. Hi Fiona, how are you today? 

Fiona Stevens: Hi, I'm very well, thank you. Thanks for having me. 

Claus Lauter: Fiona, gimme a bit of a background of what got you in e-commerce, what got you into the site of loyalty program. 

Fiona Stevens: Yeah, absolutely. , it was really when I was working, , in-house marketing for a content marketing agency and we were working with a lot of e-commerce brands and it was all about the onsite experience.

It was about, , product copy and conversion on site and that kind of thing. , but we also started doing lots of email, post-purchase, email work and things like [00:02:00] that. A lot of it translation. So how do you get the same message across in lots of different markets? And I found that sort of transition from onsite to post purchase really.

Very interesting. And then, , the next company, or the next agency I moved into was loyalty specific for much bigger brands, much bigger retailers. , And I just found it an absolutely fascinating world. And then I was introduced to Lo Lion where bringing together the sort of independent, smaller eCommerce retailer side of things, but still that really fascinating world of loyalty programs as well.

And the two together was a perfect mix. 

Claus Lauter: Okay, sounds great. Now, obviously with increasing at cost, increasing CPAs on, so on and so forth, customer lifetime value becomes more and more a focus of a lot of merchants. Now, different ways to do this, obviously loyalty programs. Is one way to do this, many people just have in mind is like, I give some points out and then hopefully at some point my customer will come back.

But the topic's much more complex than that. Give me a bit of a background on how it actually should work in a perfect world scenario. 

Fiona Stevens: it's absolutely true. Points are behind almost everything. Even the most high end [00:03:00] luxury programs. They're run by points, but the customer doesn't have to see those points.

It should be more about customer experience, I think more and more. With ad cost going up, et cetera, but also with people opting out of those ads , and opting out of sharing their data, it's getting harder to deliver those personalized experiences. You've also got, cost of living crisis, economic downturns, right, left and center.

People are a lot more nervous, a lot more cautious about spending their money, and they want to spend their money with brands that they know and trust. So rather than seeing a Lords program as a points and. Platform. It really should be a way to build a connection with a customer, an ongoing connection, and actually to start building up a customer community of people that know and love your brand so that when they do have the money that they want to spend, there's not really any question in their mind.

They think, who do I know? I'll get good quality, good service, good product, and a bit of additional something and they come straight back to you. So I think. Particularly in the environment we're operating in today, it is much less about rewarding purchases and it's much more about finding ways to keep in touch in [00:04:00] between those purchases.

It's about, , helping customers understand through your program that you share the same beliefs or values. , it's about building a community that they want to be part of, even when they're not shopping, so that when they do decide to shop, you are their first port of. 

Claus Lauter: Okay. You brought a very interesting term up, out era.

So a lot of people opt out of a lot of things, email marketing, and obviously with all the updates from, , apple, for instance, iOS 14.5, and so on so forth, it becomes more difficult , for merchants to get through to their customers. How can a loyalty program help with that? 

Fiona Stevens: , essentially when you join a loyalty program, you're opting into communications, you know, and there's, there's lots of different ways at, you know, at the highest level, They have said yes to receiving transactional emails from you.

So you can be sending them things like points, balances or available reward reminders and things like that on a monthly or weekly basis. Just , those check in points that are really highly personalized, they're entirely unique to that customer because they've got their points balance in. But then there's also ways you can use loyalty programs to collect more of that data.

So for example, we have a dog food brand who awards [00:05:00] points for people that take the time to fill in their pet profile. So it asks questions like, what colors your dog wins it's birthday, et cetera. And they can then provide personalized coms or personalized loyalty offers, et cetera, based on the profile that they've built.

And I think that works for a lot of D to C brands, especially things. Skincare or hair care where you've got people filling in profiles with a little bit more information around what works for them or what kind of skin they have, and it just allows you, as a merchant to carry on delivering that level of personalization that we're struggling to do a little bit more at this point.

Or actually just to move beyond that first name personalization that we've done for a long time. , we all think we're doing it, but really what we're doing is putting very light detail, Dier first name or something. , and the more you can use points to encourage people to share more and more information, the more you can personalize.

Claus Lauter: Okay. Very interesting example. Maybe you can give more of these so people, when they enter more details about their dog for in a pet niche, get more points for every answer. Is that right? 

Fiona Stevens: for you get points for filling in the profile and then , [00:06:00] you may receive things like bonus point promotions on products that would suit your dog.

is. Gathering the information and incentivizing a customer to share their data, but then it's using it in a reef level way as well to get that next purchase through. 

Claus Lauter: Okay. Can you give some more examples? I think a lot of merchants are struggling to get their head around us on how to come up with ideas.

Maybe from your experience, you can give us some ideas there. 

Fiona Stevens: There's lots of different ways really, I think. that is one, , profiles. You've also got things like quizzes. Octane for example, and I think now, , a kendo, they have quiz, , functionality built into their apps.

, you can integrate that with your logic program. So again, offer people, , points or rewards and exchange for filling in those quizzes. Again, you just gather more data about them. , it's a little bit of fun as well. , We also see people using Tier as a kind of gamification in their Lords program to collect more of that data and again, then be able to use it to personalize experiences.

So actually the vast majority of people using Lord Line have separate tiers in their program. And the more points you earn, the more you share data. The more points you earn, the more [00:07:00] points you earn, the more you move up the tier and then you unlock more experiential rewards. Things like early access to sales or , early access to new product lines, the opportunity to feedback on products, that kind of thing.

Okay. 

Claus Lauter: Points in itself are worthless. So how would you convert in the best case scenario points to something that gives some kind of benefit to a customer? 

Fiona Stevens: I a hundred percent agree, and I think it's also a big concern for stores. If I offer loads and loads of points, does that mean I'm gonna offer loads and loads of discount rewards?

, so I can completely understand why people worry about that. , in reality, there's lots of experiential alternative kinds of incentives that you can use, which people actually value just as much A few examples I already mentioned, , early access to sales people absolutely love the v i p feeling of being able to get to a sale before anyone else can.

And that also works really well with, , either new product lines that you're jumping or when you have something really exciting, like a collaboration, , a new that some design has put forward for your range or something like that. , people love getting early access to that kind of thing.

We also see a lot of people tier their shipping and their [00:08:00] returns policies, , so that the more loyal the customer, the faster the delivery or they can access free delivery where other people can't. We've actually seen some people, , offer curbside pickup and things like that to their most valued customers as well.

, my absolute favorite that we're seeing more and more at the moment is people designing rewards in a way that supports their brand system or their brand, , values and brand beliefs. For example, that same dog food, They allow you to redeem a reward in the form of a donation to a dog shelter for a doggy dinner.

, we have a jewelry brand who give you, , rewards if you recycle old jewelry with them. And it doesn't have to be their brand, it can be any brand. I think if you can redeem your points in exchange for planting a certain number of trees. It's finding common ground and common values to connect with on, and then prompting that emotional connection.

But it, doesn't cost you as much as a brand to deliver these, it's not impacting your bottom line in the same way, but it is allowing you to connect with your customers and show them that you actually do care about the same things. 

Claus Lauter: Yeah, I think these are great examples when it comes to[00:09:00] sustainability and donations , in that direction.

I think there's a lot of, , power there for brands , to build up a stronger connection with the merchants. when it comes to frequency and getting back to your client, , to build up the program, how often do you think do you need to get in touch with your points? with the clients?

Stay in mind, basically. 

Fiona Stevens: I think it depends on what your, purchase frequency is and what the life cycle of the customer is. So for example, if you are selling something like, , handbag, Someone's only gonna come back and buy one of them. It depends how big a handbag habit you have, but you're probably looking at three to six months max.

So if you're sending somebody weekly points reminder, they're gonna start to ignore it. However, if it's something like a hair care brand, then you may want weekly, probably is the right answer because you wanna make sure that when somebody is running out, they come out of the shower and they're like, oh, I must order some new ones.

Are there and you're top of mind. So I think it really does depend on purchase frequency, but It's about finding enough check in points and enough slightly different check in points that you don't start to be ignored. It's not the same message going each time, but you are regularly [00:10:00] appearing in their inbox with information that is really useful and really relevant.

So I would probably look at alternating, to be honest, between a points based message, available rewards, this is your points balance, and also really important to tell them how to use it. So often those programs forget to actually say, This is how you redeem it. And then for the customer, it's like, well, great, I've got those points, but I'm not really sure what to do with them.

I'm not sure what they amount to, I'm not sure how they're gonna of any value to me. So I think those slightly more transactional messages, points, balance, rewards and what to do with them. , but then alternate that with really great content that doesn't sell, that is not a product or discount heavy.

It's , perhaps examples of people using your products or really inspiring stories. I think actually there's a real opportunity for people, particularly in sort of independent retailer space to tell their brand story. So introduce your founder , interview your founder. Try and use those emails to share some of the history of the brand, why you exist and why you're selling the products you are.

And then I think you get this beautiful. Synergy between the sales messages and the prompts to actually [00:11:00] purchase, but then why you would want to purchase from that brand. And again, with the lost cost of living and everything, I think it's important to straddle that line quite carefully.

Claus Lauter: Okay. Now was loyalty line, obviously you were helping merchants in implementing a program. It works with Shopify and other platforms. Tell me a little bit more about the app and how it. 

Fiona Stevens: As exactly to say, we, do work predominantly with Shopify, Shopify Plus, but we work with other platforms and via API as well.

And essentially with Loyalty Line, you have the opportunity to create your own loyalty program so you can brand it how you, like, you can, , offer the points and rewards , that you want. You can create something that reflects your brand entirely. The level of customization depends a little bit on the plan that you're on, but the idea is that anybody should be able to build their own loyalty program without the need for a developer.

or if you have development expertise, then fantastic. You can make it that little bit more customized. But yeah, we believe that everybody should have the opportunity to retain their clients, which is not easy to 

Claus Lauter: Okay. When it comes to a timeline what kind of [00:12:00] homework does a, , potential user of your app need to do before they approach you?

do they need to have on the list before they can get started? That's a 

Fiona Stevens: really great question. I think. The important thing really is to just understand your customer's lifecycle. So how often are they repeat purchasing? What should you expect in terms of repeat purchase rates? how many years are they staying with you?

What, the full lifetime value looking like? What could you expect it to look like? How often are they likely to purchase that? I think that's the kind of information that you really need. Average order value as well. What was it before you started? If you have those benchmarks, then you can see how things impact.

I think the tricky thing about loyalty is it doesn't happen overnight. They want it to be a silver bullet. They want it to work straight away, but unfortunately customers don't. Loyal overnight. And even if they do join your loyaltys program, they may not return to spend straight away cuz they have to have time to build up that points balance.

They have to have time to need that product again. Unfortunately, yeah, we can't promise results overnight what you need to do before you start is understand what the metrics [00:13:00] are you are trying to move and make sure that you've got a good steer on what they are. So you can compare over time, but also, Loyalty often is a set and forget type thing.

people create a program. They run it in the background, people join. They don't see much value from it, but they never quite get round to tweaking it or changing it. So the key thing is to know where you want to start. Start really small, start just by rewarding a few activities. Start with purchases, but also a couple of simple additional things like points for birthdays or incentivizing social shares and follows and maybe incentivizing reviews, that kind of thing.

Start small, but make sure you've got somebody who has dedicated time to that loyalty program. Don't let it just run in the background. Make sure somebody is taking responsibility for retention because , if you just leave it running, it won't perform. If you have somebody that's just regularly going back, checking.

Seeing what's working, adding a little bit of extra functionality here or there, then you'll start to see success. in terms of homework, know what metrics you want to improve and know who's going to manage it. 

Claus Lauter: Okay. I think you just gave away a lot of [00:14:00] golden nuggets there for someone who wants to get started and it already answered a few of my questions that I had.

So in regards of pricing structure, how much does it cost immersion to work with you guys? And it 

Fiona Stevens: completely depends on the plan size. So we start as little as $159 a month. So we do have a free plan on the shop by app store as well. , and our pricing increases by, , order number rather than member count because we know that not every loyalty program member will engage with your store every single month.

So to charge you for all of those members every month is unfair. , the pricing really depends on the number of orders that you're processing per. 

Claus Lauter: Okay, where can people find out more about you guys? 

Fiona Stevens: , so you can either head to loyalty line.com, , or you can find us on the Shopify app store, or we are, , on all the, typical social media channels 

Claus Lauter: as well.

Okay. Sounds great. So I think giving the idea that, , loyalty programs is a bit of a long term game. I think that's a very important point. There don't, come and think that a day later you will make huge lifetime customer value from the app. , so good takeaway there. I think it's a, , strategy that most merchants should [00:15:00] have in their repertoire to build up their customer base and to get more returning customers to their store.

Fiona, Thanks so much for all this information. I will put the links in the show notes. Then you just one click away and have a great day. 

Fiona Stevens: Fantastic. Thank you.

[00:16:00]