Loyalty programs — are they worth the investment?
Of course, they are. However, customer acquisition is equally critical to grow your eCommerce business.
On the latest episode of The eCommerce Toolbox: Expert Perspectives podcast, host Kailin Noivo is joined by Nate Kennedy, VP of Customer Experience at Horizon Hobby. Together, they explore how insightful eCommerce analytics are, how to balance customer acquisition and loyalty, and whether it’s worth spending your way into a market.
Leveraging eCommerce Insights
eCommerce businesses are unique. By operating online, they have insights into their customers that are simply unavailable to brick-and-mortar retailers.
eCommerce brands can easily see where their customers are engaging, where they’re leaving the funnel, and, with the right tools, where they’re frustrated by your site’s functionality.
For brick-and-mortar retailers, this is limited to what you see when your customer is in-store, or the feedback they give you, not their experiences throughout the entire funnel. These unique insights are invaluable for understanding exactly where your customers are and where they would like you to improve.
You need to leverage this data, as it can help you to build fully customized journeys for your customers, and aid in predicting exactly what they will need and when, as Nate explains:
Balancing Customer Loyalty and Acquisition
Nate says, “If you don’t have a good loyalty program today, you are just bleeding customers to Amazon, or to whoever gives them the best deal.”
It’s no surprise then that Hobby Horizon is committed to their ‘pay-to-play’ style loyalty program that was ranked second in the hobby sector by Newsweek last year. Members of the program are given a ‘white glove’ treatment, and often become unofficial salespeople for the brand.
However, even with the importance of this focus of loyalty, Nate emphasizes that you cannot neglect acquisition efforts. Horizon Hobby have had to find an intricate balance of funding the program while also bringing in new customers, something which they are so far succeeding at:
The next step is to transform the program into a robust referral scheme, thereby further strengthening the fine balance.
Gaining Traction in an Experience-Based Market
Nate believes that it is feasible to spend your way into any market, but it is by no means cheap or efficient in the hobby sector.
The hobby market is experience-based, so you need to capitalize on that to gain traction. Instead of trying to do everything all at once, he recommends starting with either manufacturing or retail, building that out, and then expanding.
If you are entering a commodity-based market, it will be easier to spend your way in than the hobby sector, but you will most likely just compete away your profits, so you should probably think twice before going with that approach.
Listen to the Full Episode Below!
Tune in to this episode of The eCommerce Toolbox: Expert Perspectives with Nate Kennedy to learn more about balancing customer loyalty and acquisition.
👉 Apple: https://apple.co/3OQJC4m
👉 Spotify: https://spoti.fi/3OQWWFJ
Nate Kennedy is the VP of Global eCommerce at Horizon Hobby, an international developer, distributor, and marketer of radio control vehicles, model railroads, and other hobby products. Prior to this, Nate spent sixteen years as Executive Vice President of SelectBlinds, where he collaborated in launching the business as a minority shareholder and then grew it to a multi-million dollar sales and profit producer.
