How to Build a Loyalty Program in the Supplements Industry

June 8, 2016 Alex McEachern

There are very few industries that are a perfect fit for the ecommerce world, but supplements are pretty close. This is largely because they have a high purchase frequency, average order value, and customer lifetime value (if you’re able to retain customers). It also helps that margins are very good, especially on house brands!

This makes a loyalty program in the supplements industry a very attractive option. The industry is very competitive and shoppers are relatively price sensitive. While this means that your shoppers will be tempted to switch stores/brands to find a better deal, you can stop that by incentivizing them to stay and shop with you. Give them a deal with points that they can’t pass up.

Here’s how to build a loyalty program in the supplements industry.

loyalty program in the supplements industry title

There are a couple of metrics you need to be mindful of when designing a mind-blowing rewards program: customer lifetime value, purchase frequency, and average order value.  It’s important that each of these metrics be high, otherwise your business might not be able to sustain your killer program.

loyalty program in the supplements industry overview

(Find out how these metrics and your company’s margin are perfect for a loyalty program)

Luckily, each of these criteria are met within the supplements industry.  Since a healthy lifestyle is a long term commitment, your customers will have a higher CLV.  Similarly, shoppers will need to replenish their supplements every few months (keeping purchase frequency high), with each of those purchases having a high order value.  

loyalty program in the supplements industry

(Beat the competition with the Loyalty Programs for Supplements Guide)

Finally, you need to consider the level of competition.  As it turns out, the competition in the supplements industry is fierce, making it a “race to the bottom” to see who can offer their products at the lowest price. Not only is this business model not very sustainable, but chances are you won’t be the winner.  Luckily for you, designing an irresistible loyalty program will help keep you at the front of the pack.

loyalty program in the supplements industry strategy

(Increase profit, build community and more with a loyalty program)

Another byproduct of high competition is that many shoppers are more likely to jump between providers and choose whoever has a sale at the time they need to buy.   A loyalty program creates a switching barrier that your customers will find hard to ignore. The strategy behind an effective supplement loyalty program is to focus on using points to drive purchases that are more profitable by encouraging higher order values, or directing shoppers to higher value items such as house brands.

loyalty program in the supplements industry clear value

(Discover how to acquire, retain, and nurture your best customers)

Your program’s objectives should directly align with this strategy as you strive to acquire, retain, and nurture your customers base.  Providing potential customers with a loyalty program that offers clear value will separate your brand from your competitors, and developing a reward program that recognizes the longevity of your customer’s spending habits is vital to keeping them engaged and satisfied with your products and services.

loyalty program in the supplements industry referrals

(Learn about the power of referrals and how a loyalty program can encourage them)

Another excellent way to keep your customers engaged is by offering them more rewards when they purchase your house brand products.  You can also offer your brand’s swag as rewards, giving your shoppers an item whose perceived value exceeds the actual cost to your business. This is exactly what Muscle and Strength and many other supplement loyalty programs offer in their rewards catalog.

You can also encourage the development of a brand community by rewarding your customers for referring others to your business and sharing their experiences with your products on social media.  As members of larger athletic communities, your customers have the power to bring prospective customers to your business and convert them into repeat business.

loyalty program in the supplements industry multiple ways

(Find out more about the importance of variety in the Loyalty Programs for Supplements Guide)

So now that your customers are going to be falling over themselves to participate, how are they actually going to earn and redeem their rewards?  This is probably one of the most important aspects of your program, and should be approached with an emphasis on choice.  Customers respond better to personalized experiences which relate to their spending habits, and providing them multiple ways to earn and redeem their rewards will make them feel special and valued.

A couple of ways you could do this is with a points-per-purchase model, or rewarding for social sharing and referrals.  You can also set up a tiered program, and then allow your customers to redeem points for rewards such as fixed discounts, store credit, and exclusive products.  Offering them multiple options for how they can earn and spend rewards gives your customers a sense of freedom that will be tough to beat.

loyalty program in the supplements industry summary

So what can we take away about building the best loyalty program in the supplements industry?

 

1. Develop a program strategy which places excellent value and customer service at the core of your program.

 

2. Reward your customers for purchasing your house brand and referring friends to your business to encourage community.

 

3. Provide multiple ways to earn rewards, focusing not only on dollars spent but on the complete experience.

 

4. Offer rewards that inspire your customers and even get them competing against each other!

 

With these recommendations in mind, you can rest assured that your program will not only appeal to your current customers but will also draw new customers to your store.  Make your supplements brand the king of the castle and increase your profitability with a loyalty program today!

loyalty program in the supplements industry supplements CTA

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