The best kind of customer is a repeat customer. Major retailers and restaurants know this, and many have created successful rewards programs to keep customers coming back.
Think of Starbucks Rewards that pays food and beverage benefits to frequent customers, or Costco, which offers qualified members annual cash-back rewards based on their total purchases for the year.
How can businesses do this and still make a profit? As it turns out, rewards programs like these foster repeat business that, in turn, boosts profits. Repeat shoppers spend an average of 33 percent more than new customers, according to Laura Lake, a marketing strategist and author of Consumer Behavior for Dummies.
Moreover, a 5-percent increase in customer retention can increase a business' profits by 25 percent to 125 percent, researcher Gartner reports.
A 5-percent increase in customer retention can increase a business' profits by 25 percent to 125 percent
That's all well and good for large retailers, you may be thinking. But how can a small or medium-size eBay seller offer a rewards program that gets that kind of results? We'll tell you.
A rewards program made for eBay sellers
Auctiva has partnered with MyStoreRewards to enable eBay sellers of all sizes to drive repeat business through their own customized rewards programs. Auctiva's MyStoreRewards offering was recently released from beta, and is now available for free to all users on the Advanced Plan and above.
Getting started is simple. When you join MyStoreRewards through Auctiva, you only need to choose how much of a cash-back reward to give your buyers—as little as 2 percent—and how often to email your buyers about what you have listed on eBay.
If you choose, Auctiva will automatically insert an ad in your eBay listings that lets buyers know they can get cash back when they buy from you using PayPal, or you can manually insert the code into your listings.
Then MyStoreRewards will invite your buyers to join your program and send emails that cross-promote your active listings to those who have opted in. On your MyStoreRewards page in Auctiva, you'll see all kinds of statistics like how many buyers have opted in, how much they've spent and your repeat purchase count. You'll also get numbers on the effectiveness of cross-promotion emails sent to your shoppers.
Rewards bring buyers back
Early results from our MyStoreRewards offering bear out what the experts say. In the first three months Auctiva offered the program to selected customers, nearly 2,000 Auctiva sellers joined and began offering rewards to buyers who opted in. These sellers saw an average repeat-customer rate of more than 30 percent.
Buyers spend more to get rewards
Buyers who opted in to Auctiva sellers' MyStoreRewards programs spent more than 40 percent more per purchase than those who didn't join
Buyers who opted in to Auctiva sellers' MyStoreRewards programs spent more than 40 percent more per purchase than those who didn't join. On average, U.S. buyers who opted in to MyStoreRewards spent $62, compared to $43 for nonparticipating buyers.
Rewards grab shoppers' attention
Buyers responded positively to MyStoreRewards program invitations sent on behalf of Auctiva sellers. More than a third of these emails were opened—that's an impressive open rate that any direct marketer would aspire to achieve. And the click-thru rate, a measure of real interest, was more than 8 percent—which is also an excellent result.
Reap rewards from your eBay sales
To create your own store rewards program through Auctiva, hover your mouse over the My Account tab in your Auctiva account, and select MyStoreRewards from the Settings menu. Click Enable to activate the program, then choose your program settings. The whole process takes just minutes.
There are no fees to use MyStoreRewards through Auctiva. You only pay the rewards to your buyers. Additional PayPal fees may apply.
If you don't see MyStoreRewards on your Auctiva Settings page, consider upgrading your plan, or send a help request to Customer Support to find out if you're eligible. As many of our sellers have learned, offering cash-back rewards can be a very rewarding experience.
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Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.