Loyalty programs are among present-day trends. In order to retain their customers, advertisers use various rewarding mechanisms. Admitad Head of Publishers, Anna Gidirim, has told us how loyalty programs work in affiliate marketing and what specific features should be taken into consideration.
– We all know what loyalty program is in general. But what specific features do affiliate marketing loyalty programs have?
– In the affiliate marketing, a loyalty program implies a possibility of obtaining rewards for online shopping. Loyalty programs in the affiliate marketing are mainly distinguished by the fact that only buying online counts though we have started working with offline too. Launching a loyalty program though an affiliate network provides direct access to a huge number of online stores where users can obtain rewards for their actions, be it in points, miles, bonuses or rubles. In order to have this reward accrued, a user has to follow a special link, which means it is not enough to just come and buy. If a brand wants to expand its loyalty program, they can contact us and obtain a huge pool of customers at once.
– Why is it more convenient for a brand to delegate this to the network instead of doing it themselves?
– As I have already said, the first advantage is a single access to the largest online stores. The second advantage is a well-established workflow. We work based on CPA which means paying for particular actions. This is similar to a conventional loyalty program and it is the most transparent working model for advertisers. The third advantage is the ease of integration: you can integrate through api or arrange file transfer on ftp.
– For example, I am a bank and I need to retain and additionally motivate my clients. Retaining clients is about 3-5 times cheaper that attracting new ones. I have a choice: whether I start making a loyalty program myself or I resort to my affiliate network (Admitad, in this case) wishing to use its tool. Is my understanding correct that we create a landing page representing affiliate stores?
– Yes, this is almost what it looks like. When somebody contacts us in order to have their existing loyalty program expanded or a new one launched with a possibility of accruing points for online actions, the step-by-step launching process will be as follows: registration in our system and selection of advertisers; then, the client creates a landing page on their side where they provide our affiliates’ flypages containing detailed description and a rewards based on our affiliate rates. Of course, users’ personal accounts have to be provided where points (money) can be accrued.
For Admitad, as for any other affiliate network, the key point is to track all online actions (any affiliate network is first of all a tracking platform). Therefore, we need a loyalty program to provide a link on the flypage through which we transmit the user’s id to determine which user and for which action has to have an accrual from the loyalty program. Then, all the data go to Admitad statistics. Detailed statistics is provided in the personal account including the time of the click, the cart amount and the duration of the website visit. All the information can be later additionally analyzed, segmented by subID and attention can be paid to the fact that a user, for example, often shops on Lamoda. Therefore, if we send an offer to the user, he or she is highly likely to make a purchase.
– And how do you search for stores and affiliates to be represented on the landing page?
– The right thing to start with is to find out the goal of the loyalty program and, most importantly, what the target audience is. If we take World of Tanks as an example, a loyalty program successfully launched last year, there is definitely male audience. We have noticed that clothes shops are doing well for them but the best results have been shown by Sportsmaster, Media Markt and Vse Istrumenty (All Tools). Generally, it all depends on the audience’s interests. Cosmo.ru was among the first in the media to launch a cashback service. They know what their audience needs, make fashion trend reviews and show where you can purchase some products and, most importantly, how much you can save by means of cashback. In other words, they are on close terms with their users. When choosing stores, you should keep in mind what the audience will like. Is it important to consider the tariff that is the reward the store is ready to pay. Other things to pay attention to are conversion and the rejection percentage. If the latter is very high, you should think twice whether to cooperate with the store, perhaps, the matter is that they do not call customers in time or deliver low quality products.
– But what is the brand’s idea? They come and say, “I would like you to help me arrange a loyalty program.” How are stores selected after that? You ask about the brand’s audience and what it wants from them and then select stores for the landing page, don’t you?
– Most often, we recommend that they make the selection themselves. We provide top 30 advertisers most popular among cashback services and loyalty programs. But clients make decisions on their own considering all the factors listed above when selecting some offers. Some clients place only top 30, others allow users to choose and try to find as many online stores as possible. Approaches can be different.
– And have you ever had any unique, narrowly targeted requests?
– Yes, sometimes loyalty programs are created for narrow segments. For example, we once had a request for creation of a traveler’s card for young people. At Admitad, all offers are conveniently targeted, there is a filter and, if necessary, you can select only tourist offers or only electronics, for example.
– What are possible risks when working with a loyalty program?
– A loyalty program is an additional tool you have not had before, so the only risk is to create a poor loyalty program. In fact, when we suggest that the online area of those programs be developed, we say, “Just imagine: your users are now buying actively but the profit is going past you. And now you can turn this financial flow, let it go through you and help your client make money too.” The main problem is unaccounted orders, we call them “lost ones”: for some reasons (there are lots of them), they have not been attributed to users on the Internet. This kind of orders makes up to 5% of the total number of requests. This is why we let clients transmit those requests through us, in order to find out their status.
The second problem is fraud on the part of users. There is a great variety of cashback platforms and programs now where clients can obtain some benefits. This gave rise to forums where fraud schemes are described in detail, how you can deceive affiliates and what schemes can be used. For example, a call center operator placed all orders via a cashback service or a customer made clicks in each loyalty program or cashback hoping to obtain rewards everywhere. Therefore, we recommend that analytics be adjusted in such a way that each customer’s click on the store as well as their purchase frequency could be traced. And, since most similar affiliates cooperate with us, we have implemented a special feature: before making a claim you can check if the order is present in our system in connection with another affiliate to decrease the load on your support service and reduce the possibility of fraud.
The third problem lies in the fact that some users do not understand how to do shopping and get rewarded. In the event of bank loyalty programs, it is easy: you buy something and receive some money. And here you have to clear cookies and disable ads blocker as it is normally prescribed by rules, delete all extensions, be sure to follow the link, make a purchase at once, without sending products to the cart, and so on. There are lots of restrictions but they are all conventional and simple. Some users are already familiar with it to some extent but there are always those who need explanations. You have to create clear rules in a language which your audience can understand, for example, you can make instructions on YouTube or create an online helper. These are probably the main challenges you have to face when creating an online loyalty program.
– Which of our companies start those programs most often?
– In our domain, the situation is not different from that in other marketing areas: if someone has done something really cool, competitors start copying it at once. There were some individual projects such as “Malina”, “Mnogo.ru”, then “Svyaznoy Club” appeared, then, electronics took up, banks started launching their projects simultaneously. There has just been a wave of mobile operators: MTS, Beeline, Megafon and Tele2 have started their loyalty programs.
– What trends can you see in loyalty programs in Russia or globally? How are they going to change? Or are they going to remain in their present form for now?
– While a year and a half ago it was something new, stores were happy to get connected to banking products and willing to participate in programs, now they have calculated the costs and realized that it is expensive to pay for just placement in a loyalty program. You have to provide benefit, not only to your customers but also to the store that pays a reward. You do not generate value by just placing an offer like “From now on you get a bonus – 2% of the transaction in the store X”. Why should the store pay 2% for each transaction in your loyalty program for a year? When it deals with a new, little-known store, it’s a good chance to come into the spotlight.
But for popular stores it is not a long-term affair, and to make it long-term, you have to know how to target your audience in order to, for example, come to a user at the store B and offer them an increased percentage at the store A. Offers are seldom dynamically reorganized for a particular client visiting a website and customized promotions are rarely prepared. But future belongs to those able to select promotion campaigns faster and better.
– As far as I can see, this targeting can be implemented based on Customer Jorney analysis. In Russia it is basically acceptable but in Europe… They are introducing new GDPR rules on May 25, then there will be e-privacy and it is unclear what it will look like exactly… Sooner or later we are going to face it as well, in one form or another. What can be done about it?
– Well, we are unlikely to have it in the same format and if it comes to us, it won’t be soon. If it happens, you can use the data you already have. For example, I have a Perekrestok card and I provided my personal data to receive it: my phone number, age, etc. If you set analytics, you will see which stores I have visited and where I have bought something. Information about transactions can be seen in our personal account. This can be used as a basis to arrange good activities, adjust triggers and make money. Actually, everybody is starting doing something about it but nobody has yet implemented it so that we could say, “That’s great!”, perhaps, only Tinkoff – they are doing a good job.
– And is anybody trying to do it together with you?
– Of course, all the loyalty programs we have are already starting looking that way. It all depends on how mobile they are inside and experience shows that in many organizations bureaucracy is flourishing.
– How big does the customer base have to be to make a loyalty program reasonable? Or is it specific in each case?
– The main goal of a loyalty program is often rather clear: to provide new possibilities for your clients, thus increasing the value of your product for them. So, the goal is not to make money. If the goal is to make money but your customer base is less than 250 thousand users, I think you shouldn’t even try because you won’t be able to earn much; you will spend more efforts on support, integration and other things than you will then receive.
— There have been a lot of loyalty programs launched with Admitad in the recent years, can you give us a recipe of a successful loyalty program based on your experience?
– What we need is:
- 1 good programmer
- 1 excellent marketing expert
- 1 smart manager
- Some resources for user support
- A desire to make your product the best
Let’s start: first of all, the “Good Programmer” has to create a landing page where all offers will be shown. It is better if the he or she stays for a couple of nights to think over and adjust a dynamic display of promotional offers depending on the users who open the section. It will also be necessary to disable click through with ads blocker, set click-through tracing and a form for unaccounted orders. The better the programmer copes with it, the less work the support service will have as the number of claims will be reduced to minimum.
After that, the “Smart Manager” and the “Excellent Marketing Expert” start working actively to notify users of the new option and, most importantly, to familiarize them with it. It is vital not only to launch a loyalty program, because it is what everyone has, but to provide continuous support telling users how it works and what promotional offers are available. By the way, the manager can coordinate some unique offers from online stores via Admitad; they are usually associated with some holidays. You should get ready in advance: if you know that you are going to have some activities associated with Saint Valentine’s Day, you should start preparation 3 weeks before in order to provide a high quality selection for your clients.
I recommend that your internal currency be supported by conversion with other loyalty programs to make accumulation of your points attractive for users. For example, you can create a landing page where users can spend their points to get the brand’s promotional items.
You should not forget about the advertisers as well: the more successful promotional offers will be, the more customized and interesting offers the advertiser will give you.
To sum it up: try to create a unique and attractive product that you yourself would be pleased to use.
Posted by: Olga