I recently teamed up with the folks at RJMetrics to write about the importance of identifying and retaining your best customers for long-term revenue growth. As a follow up to that post, I wanted to dive deeper into one strategy that I touched on in particular – customer loyalty programs – specifically with Sweet Tooth and their rewards extension. Why do I like these guys? Aside from being a Magento Platinum Industry Partner, Sweet Tooth Rewards remains as one of the highest rated Magento extensions on the Magento Connect marketplace to date. So, I reached out to Sweet Tooth’s Co-Founder and Marketing Manager, Steve Deckert, and interviewed him about what they’re doing in the customer loyalty space. Enjoy!
Interview with Steve
What's your role with the company?
I’m one of the Co-Founders here and actually helped come up with the name Sweet Tooth. These days I focus mostly on our marketing efforts and partnerships. We have a great culture here which makes working hard very easy. It also makes ping pong matches very intense.
How would you describe Sweet Tooth Rewards in an elevator pitch?
Sweet Tooth Rewards gives retailers the ability to run their own loyalty programs that reward customers for their purchases and behavior. As a result, Sweet Tooth-enabled stores keep customers engaged and see an increase in orders.
How was the idea of Sweet Tooth born?
Prior to creating Sweet Tooth, we (founders of Sweet Tooth) did custom eCommerce software development. We noticed that a lot of our clients were focusing on acquiring new customers, but weren’t able to retain their customers beyond a single purchase (this group usually checked out as a guest). After talking to a few dozen retailers, we determined that there was a huge need for retention in the eCommerce space. So, we developed Sweet Tooth and brought it to the eCommerce community; it was so successful that it is now our only focus.
Why do you feel loyalty programs are so important for eCommerce?
I think that loyalty programs - and customer retention programs in general - are an under-utilized strategy, especially in eCommerce. Online retailers tend to focus most, if not all, of their budgets on customer acquisition. With a loyalty program, the customers you acquire will spend more per order, will purchase more frequently, and will be engaged with your brand over a greater time period. They will have a higher “customer lifetime value.” This means that a loyalty program actually increases the ROI of customer acquisition spending. Without a loyalty program, you have less sustainable revenue because you have to keep spending more to generate sales. A loyalty program increases profit and decreases the variance in revenue.
How many clients do you guys serve at the time of this interview?
At this moment we have just over 3,500 clients around the world -- loyalty is a successful strategy everywhere!
Do you have a typical client profile?
Our typical client is a medium-sized retailer who wants to increase revenue and improve customer experience. Some clients have “brick & mortar” retail operations, some are online-only. They are usually frustrated with increasing costs to acquire a customer, especially on paid search. Our clients’ customers are usually capable of making repeat purchases over their lifetime, but aren’t - or they are purchasing at a competitor’s store instead. Their customers are capable of referring their friends, but aren’t. All of our clients want to have happy, loyal customers who love their brand and spend more - but who doesn’t want this?!
Do you have any brand case studies that you like to particularly highlight?
One of my favorite case studies of ours is Delicious Karma, who was awarded the Most Innovative Magento Enterprise Website at the Magento Imagine conference in 2013. They used Sweet Tooth in a very unique way: to “gamify” the onboarding of their new customers. Using Sweet Tooth, they were able to increase membership 200%, increase average order size 58%, and increase repeat purchases 20%. You can read more about their successful loyalty program in this article; their original onboarding challenge is shown below:
Do you receive any common push back from companies starting a rewards campaign?
The number one objection that we receive from companies starting a rewards campaign is that they simply don’t have time to do this. It is a matter of prioritization. Most retailers will agree that they want to have loyal customers that buy more often and bring their friends to buy. Most retailers will agree that a loyalty program can be successful. The problem is that they focus on short-term revenue goals instead of thinking about how their brand is going to be successful over a longer period of time.
You guys had a big change when moving to the cloud and locking down $2.25M in funding last year; any other big milestones or updates since then?
We have had a ton of new features developed for Sweet Tooth Rewards, like:
Rewarding for Sharing on Facebook, Twitter, Pinterest, & Google. Customers can now share your products, your brand, their most recent purchase, or even a referral link on social networks. This is a great way to increase traffic and social activity.
Customer Milestones. You can now reward customers with points for lifetime orders, lifetime referrals, or how long they’ve been a customer. Automatically change their customer group (if you’d like) so that you can have perks and promotions specific to these high value customers. Example: If a customer places 100 orders in their lifetime, send them a “congratulations” email with 1,000 loyalty points, and move them into a customer group that receives 3X loyalty points on any purchase as well as free shipping.
Reactivate Inactive Customers. You can now send customers points and an email if they haven’t logged into their account for X days/weeks/years. You can even automatically change their customer group if they’re inactive so that you can run targeted promotions with them, such as 10% off their next order, or a bonus 100 points.
In addition to the added features mentioned above, a huge recent announcement for us was that we launched an entirely API-based version of Sweet Tooth Rewards. After working on it for quite some time, we finally have it ready. What this means is that any system can now have a Sweet Tooth powered loyalty program. Any eCommerce platform, any point of sale system, any ERP system, any accounting system...anything! This is a big milestone for us and we’re really excited to see how retailers use Sweet Tooth in all of their business systems to create loyal customers across all channels.
What's on the horizon for Sweet Tooth in 2014 and beyond?
In 2014 we want to become a platform of our own. We would love to see others developing integrations between our loyalty platform and their system, similar to MailChimp or our friends over at Yotpo. Doing this will make it easier for retailers to bring more channels into our platform, and will create some amazing omnichannel loyalty programs.
In the not-too-distant future, we want to leverage data to become even greater authorities on loyalty. The reason why loyalty programs were initially invented was to incentivize customers to identify themselves so that retailers could collect better customer data. I am really excited to be able to empower our clients with even more advanced insight into how their customers behave and how to improve their customers’ experiences. Being able to publish new research to the world about customer loyalty will be really rewarding for us and something that I personally look forward to.
After interviewing Steve and hearing more about Sweet Tooth Rewards, I can safely say that I'm even more of a proponent of this great extension.