Keeping up with your competitors in the electronics industry can be difficult. Customers shopping for new tech are notorious for doing extensive research in-store and online to find the best deals, meaning many businesses end up engaging in price wars and slashing their profit margins.
You can avoid this type of undercutting by focusing more on retaining your existing customers instead of fighting for new ones. A customer who makes one purchase at your store is 27% more likely to make another one in the future, which means you can’t afford to forget about them!
Although margins and purchase frequency aren’t exceptionally high in the electronics industry, expensive technology means that average order values are. Just by getting a customer to make one more purchase, you are significantly increasing their lifetime value and contributing a significant portion of revenue to your bottom line. Building a rewards program is an extremely easy way to retain your existing customers and give them a reason to keep coming back.
Reward Programs Work for Electronics Brands
With more customers making large electronics purchases online, the level of competition has increased significantly. Now it’s not uncommon for customers to evaluate products in-store and purchase online, resulting in a huge influx of new businesses.
This leads many brands to intensively compete for these price conscious customers by heavily discounting products, which can actually damage a brand’s image. Building a rewards program gives these customers the value they seek and makes it harder for them to switch to one of your discount-focused competitor.
3 Tactics to Structure Your Rewards Program for Electronics
Implementing the following rewards strategies will allow you to create a community of loyal customers that save you from the burden of high acquisition costs.
1. Offer Valuable Rewards to Lock in Long-Term Customers
A points-based rewards program is one of the best ways to create a switching cost that keeps customers from shopping with your competitors. Customers can earn points to redeem for valuable rewards in the future by interacting with your brand in a number of ways, such as making purchases, engaging on social media, or leaving product reviews. These points and rewards make choosing to shop with a competitor more difficult. By abandoning your brand, customers are losing out on the opportunity to take advantage of the value your points represent, making the decision to leave a lot more undesirable.
You can make that decision even harder by offering the right rewards. Incentives like gift cards and free products look extremely valuable to price-conscious shoppers looking for the best deal, making your brand and products more appealing. More importantly, though, these rewards require a customer to interact with your brand multiple times in order to earn them. This locks customers in for the long term by making it obvious that your store is the one that offers the most value.
Shipping is another highly valuable reward in the electronics industry because a lot of electronics are harder and more expensive to ship, stacking up lots of additional customer costs. Nanoleaf offers their customers the ability to save on shipping costs by earning points in fun and interactive ways such as celebrating a birthday or sharing their brand on Facebook. I’ve already almost unlocked enough points to save $13 in shipping costs for a future purchase, and I just joined the program!
With this type of convenience and value up for grabs, it’s nearly impossible for me to consider buying this type of product anywhere else, keeping me a committed customer for life.
2. Build a Community by Incentivizing Referrals
When it comes to trying new brands or products, customers are much more likely to trust each other than your marketing efforts. They want to know that other people like them have found value in your brand, and are drawn to businesses that offer the chance to join a strong, like-minded community.
The easiest way to start building community is by implementing a referral program because it incentivizes your existing customers and their friends to shop with you. If your customers are offered a discount or reward points for sharing your brand with friends and family, they’ll be much more likely to follow through and actually tell people about their experience at your store.
This makes referral programs a win-win situation: customers don’t have to go through the hassle of search for the perfect product, and you don’t have to pay for additional marketing.
This type of strong referral community is particularly effective in electronics because of how quickly trends change. This is especially noticeable in the gaming industry where particular games can gain millions of passionate players in just a matter of weeks. When a new player asks me why I’m absolutely addicted to Fortnite, my response is always the same: “because everyone else is playing it!”
This “me, too!” mentality is the reason Spigen incentivizes their customers with rewards for every successful referral. Rather than spending a tremendous amount of money on ads, Spigen offers their customers valuable savings that they can pass on to their friends. This strategy turns their customers into a large network of advocates who are also part of a passionate brand community.
3. Make It Exciting with Gamification
Gaming makes up a huge portion of the electronics industry, which is why gamification is one of the most powerful things you can add to your rewards program. Not only do gamification elements attract gamers, but features like progress bars and milestones also help keep all of your customers engaged.
A VIP program is the best vehicle for using gamification to get customers excited about your brand. By offering more prestigious rewards at each successive level, you can easily encourage customers to earn points and stay engaged with your brand to unlock them. These elite rewards can be anything from exclusive access to free products or invites to new product launches.
Progress bars are the perfect complement to prestigious rewards because they let customers know how close they are to the next level. SUBPAC’s rewards program makes good use of them by clearly showing me how close I am to my next reward. This makes it really easy to stay motivated, especially because I’m already familiar with ranking up and achieving checkpoints from the video games I play.
The biggest reason VIP tiers like SUBPAC’s are so successful has to do with a concept called the consistency principle. This theory states that people will always try to present a consistent image of themselves because change is often perceived as negative.
If you were to dethrone the master of a video game, they’d feel very uncomfortable and motivated to regain their top position. VIP programs work the same way, as your elite customers are motivated to preserve the social status associated with top tiers and are willing to do whatever it takes to get their hands on those top-notch rewards.
Implementing Rewards in Electronics is Simple and Effective
You can maximize your success with a different approach than your price-slashing competitors by reinvesting your margins into a rewards program that:
- Offers customers gift cards for their loyalty points, showing them that your business provides more value than a competitor
- Builds a passionate community with a referral program that saves new customers from a lot of researching.
- Gamifies your program to make it exciting to the large crowd of gamers (and non-gamers!) who will be pumped to level up and earn prestigious rewards.