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Loyalty Program, the Pathway to Growth

Posted in Business on August 2nd 2016
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Vice President and Co-founder at IT Consultis

Companies in China are paying more attention to loyalty programs than ever before. For a company to retain its existing customers and maximize the profitability of each customer, it is crucial to select and develop a robust program to build customer loyalty. In a study by Jing Daily,

89% of Chinese consumers expressed that loyalty programs have increased their spending on general goods. Such kind of positive feedback illustrates the potentiality and importance of implementing a localized loyalty program strategy in China.

customer loyalty


Though online loyalty programs may seem common, and perhaps easy to overlook, their simple reward systems not only improve sales performance but also in turn, help enterprises improve their brands' reputation and boost organic traffic.

According to business, financial and research specialist Nielsen, 96% of Chinese respondents said they were more likely to visit retailers that offered a loyalty program, proving the fact that such programs are having a direct impact on customer visits and purchases.

Like all marketing efforts, a successful loyalty program requires adequate resources and budgets to be allocated in advance. However, as part of an optimized plan with loss leaders, strategic discounts and giveaways, it can provide an excellent ROI.


Improve customer service

A loyalty program which includes an incentive for users to buy more, or return to buy more often, will generally increase the number of customer service enquiries to validate questions or discrepancies in customer purchases or allowances. Customers who are taking part in a loyalty program will expect fast and efficient delivery of products and services, and for problems to be resolved quickly. For this reason, more investment in improving customer service is a must.

In fact, this can be done simply, through an online chat forum, one-to-one communication on different SNS channels, or your own brand's application. The best and effective approach would undoubtedly be, creating your own e-Commerce platform.

For example, Magento E-commerce service is capable of fast accommodation of the sale both physical and downloadable products. Besides, the platform and its options can fasten the promotions and keep your clients happy.

Creating a quality end-to-end system is vital and will boost a receive of positive feedback, raising the rank of your store on search tools.

Integrate customer loyalty into your digital strategy.

Analyzing e-Commerce data can be difficult, so it's important for both sides gather user data and then apply that to loyalty programs or campaigns. We recommend to link your loyalty program with Magento e-Commerce platform. It will collect the users' purchase information, which you can then use to analyze the effectiveness of your program and help you to formulate a strategy for incentives and giveaways for loyal customers.


Enterprises should combine customer data from social media.

Chinese social media platforms like Sina Weibo and WeChat are opening more Application Programming Interfaces (APIs), which allow organizations to access data about customer location and behavior. Jing Social is a great WeChat CRM tool that helps monitor both data and your following base, which allows you to filter the useful information you demand.

By combining WeChat platform, social CRM tools and Magento, you can achieve a great success of gaining more loyalty customers and build a strong brand image.

Customers will first get credits by bounding Magento account with WeChat account. Magento platform will identify the exclusive WeChat user account and order information will be sent to social CRM tool from which you can know which followers are actual customers. Inside the CRM tool, the customers will be well-grouped into different segments. Communication such as special vouchers and incentives can be generated based on different groups afterwards. Through this mechanism, a message could also be sent to the user on WeChat platform for abandoned carts.

According to Baymard Institute (2016), 68.63% shopping carts are abandoned on an average. What a company could do is to push customized messages to target users and to encourage them to finish the purchase.

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Patently speaking, some of the firms would be concerned that the implementation of the loyalty system or its reward programs might be beyond the budget.

Nevertheless, considering that pursuing new customers is the real cost and seeking a new customer requires 7 times the cost of retaining an existing one (Forbes,2013).

Loyalty programs certainly help to increase growth and improve your brand recognition. Moreover, it will help you to improve customer service and provide a better data of Customer Lifetime Value (CLV) which benefits to the future strategies to retain your customer. After a thorough understanding of the program and proper way of managing it - the Loyalty program will become a central part of your marketing strategy.