- Think Z
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- Shopify for Wine is Finally Here!
The TL;DR:
Let’s Chat D2C - You’re wasting your time and money with loyalty programs. Think outside of the box and focus on reducing customer friction!
The D2Z Podcast: Word of Mouth, Referral Programs, and Free Customer Acquisition with 2 of my favorite people in Ecomm, the Co-Founders of Superfiliate, Andy and Anders.
App Highlight - Ecocart: Shopify's leading sustainable shopping experience platform.
I’m in LA until 8/20; let me know if you're around and want to get together!
Email tip: Try testing a simple text-based email from the founder. 99% chance it outperforms your beautifully designed templates.
Let's Chat D2C - Loyalty Programs are Broken
You're Wasting Your Money
If loyalty programs were a stock, I would be shorting it with all my money.
Why do most Loyalty Programs fail?
I think there are a ton of potential reasons depending on the brand, but I'll list my top 5 here:
1) Friction
Most loyalty programs I see and interact with are filled with friction throughout the entire buyer’s journey. If you’re a subscription customer, it’s even worse to try and utilize the loyalty program. Let’s walk through an example of a traditional points-based loyalty program to highlight the pain points you would experience:
You land on the site and get prompted to “follow the brand on Instagram” to get 100 points. Two issues here! Number one, what the hell do 100 points equate to? Is that worth $100 or 1 cent? Number two, why are we sending the potential purchaser off of the site, disrupting their buying experience?
So now you have your points, will they just automatically apply at checkout? Nope! 99% of loyalty programs I see require going to a separate landing page to redeem your points for a code you need to copy and paste into the checkout. More steps and more friction!
Now you’ve finally made it to checkout, congrats! Enter the code you got from the loyalty program… Oh, you want to use the 15% off welcome pop-up code you got as well? Surprise! You can’t combine them :)
Customer adoption for repeat purchases is extremely low (less than 2%), especially for subscription customers. Why? Subscription customers need to check their points balance, redeem them for a code, log into their subscription management portal, and find where to place the code before their next order goes out. What is the purpose of all this friction? Why do the points not just get automatically applied to their next order?!
All of the reasons above are why I am such a strong proponent of NOT using a loyalty platform except in very specific use cases. Instead, focus on how you can surprise and delight your customers and completely remove the friction from the #1 thing you want them to do - buy and keep buying! Here are some creative ways and examples of structuring this:
Utilize spend tiers that kick in rewards automatically for customers i.e.
Silver: $50-250 in spend get 5% off
Gold: $250-500 in spend get 10% off and free shipping
Platinum: $500+ in spend get 15% off
Utilize order tiers that kick in automatically i.e.
2nd order comes with a free product
6th order comes with exclusive VIP merch
2) Just Thrown up on the Site
So many Shopify stores I audit have a loyalty/referral program that they just downloaded, threw up in the bottom left corner of their site, and have no plan for how it fits into the customer journey or how they’ll encourage adoption of the program. It’s not their fault either! The consensus over the last few years has been, “you need to have a loyalty and referral program!”
Instead, it looks disconnected from the site, consumers are confused because they also see the same program with different point values on tens of thousands of other sites, and it doesn’t do anything except cost the brand money.
3) Lack of Resources
Having a successful loyalty program requires a team or person who is responsible for monitoring it, integrating it with the customer journey, and driving adoption. A place I see a lot of brands falter is thinking that they don’t need to put resources against it (or they simply don’t have the resources for it, so they should wait before getting started) and don’t get the results they are hoping to see because of it.
4) Not integrated with the Customer Journey
This extends point 1 a bit, but where I see the biggest disconnect here is in the post-purchase experience. If you’re not leveraging the Klaviyo integration to segment your customers based on the number of points they have, whether or not they are a member of the loyalty program, etc. you are missing out on increasing adoption and making it a core component of your customer retention strategy.
5) Financial Liability
All of these points are a financial liability!!! These points represent a promise for future transactions, so their monetary value counts as a liability on the brand’s balance sheet. I strongly recommend having an expiration period for all points. You can also use this in your marketing messaging to encourage customers to redeem!
Wrapping it Up
Overall, if you couldn’t tell, I am bearish on traditional loyalty programs. I’ve found much greater success by automatically rewarding customers for the #1 thing you as a brand should want them to do - buy and keep buying!
What I'm Thinking About This Week - Shopify for Wine!
Drumroll… it’s finally here! We’ve removed the headache of shipping wine direct-to-consumer and are enabling a historically underserved industry with best-in-class ecommerce technology on Shopify. 💻
The DRINKS app, providing real-time tax and compliance directly within Shopify checkout, is now publicly available! In fact, it’s the ONLY real-time compliance solution in the market for wineries, Shopify or otherwise! 👀
This has enormous implications for the wine industry, allowing wineries across the US to leverage the world’s best commerce platform to help grow and scale their DTC presence. Gone are the days of external checkouts, clunky solutions, and a litany of tax and compliance issues. Wineries can now focus on what matters – growing their business! 📈
For Electriq, I couldn’t be more excited to leverage our team’s deep Shopify expertise and understanding of its technology ecosystem to help wineries learn how to better market to and retain their customers. I’ve been hosting a 10-part educational series, “DRINKS Presents: Wine Online 101”, which is just a small step towards all the in-depth resources and enablement materials we will be putting together. ⚡
I’m including links to all of the relevant resources here and the sales deck I’m using when speaking with wineries:
This Week's The D2Z Podcast
Word of Mouth, Referral Programs, and Free Customer Acquisition
🎧 Listen Now 🎧
I sat down with Andy Cloyd and Anders Bill, the Co-Founders of Superfiliate, a new player in ecommerce that enables brands to maximize the effectiveness of word of mouth by automating the creation of personalized storefronts for customers and creators.
We discuss the current problems with customer acquisition, the importance of diversifying the marketing mix and not relying on paid media, optimizing channels beyond traditional marketing tactics, and focusing on word of mouth.
We explore:
👨💻How authenticity drives effective influencer marketing
😎How to align influencer and brand values
📲What loyalty programs need to have to provide value
🚀And more!
App Highlight - Ecocart
❓What is It: Shopify’s leading sustainable shopping experience platform.
🏅Differentiator: The ability to calculate the ecological footprint of manufacturing in addition to shipping, the flexibility for merchants or their customers to pay to offset the carbon emissions of orders, the largest database of ecommerce product lifecycle emissions data, and the native ability to implement sustainable communications across the shopping experience.
💰Starting Price: It is free to implement the checkout widget on your cart page, and if you select customer-paying, then it has no cost to the merchant.
🚀How we use it: First and foremost, the platform enables ecommerce brands to calculate the ecological footprint of their product's lifecycles. This information can be used to report and communicate your footprint or to help you figure out where you could reduce your footprint.
Second, the platform allows brands to create carbon-neutral checkout experiences by informing and educating consumers on the carbon footprint of their orders in real-time at the moment of purchase.
Finally, the platform helps ecommerce brands create multi-touch sustainable shopping experiences with native capabilities that power cross-page communications around the ecological footprint of a company and its specific products.
Upcoming Events
I'm in LA until 8/20; let me know if you're around and want to get together!
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