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6 Reasons You Should Implement Customer Loyalty Programs
The ability to access exclusive prices and receive loyalty discounts influence a customer purchasing behavior as well as customer retention.
There are different types of rewards and recognition programs that businesses can offer their consumers, but the challenge lies in how effective and efficient the loyalty program is in helping the business grow, as well as making the brand known.
A good loyalty program has the power to transform a business into a customer-centric profit machine. Customer loyalty programs should be part of your marketing strategy because of the innate level of customer service they provide, and the insight into customer purchasing patterns.
Here are 6 reasons you should focus on fully establishing your loyalty programs.
A good program that gives rewards and recognition encourages customers to purchase and use more of your products or services. It also increases the chances of them remaining loyal to your brand.
Having a loyalty program, then, is a great strategy that will help you convert more, boost your sales, and grow your business. Loyal customers buy more and are often willing to pay more, which results in a steadier cash flow on your end. In fact, Gartner Inc. reveals that 80% of your company’s future revenue will come from just 20% of your existing customers. So boosting the loyalty of your customers makes sense.
Maintain, Gain, and Win Back Customers
The primary objective of a loyalty program is to retain existing customers. The loyalty program allows the customer and the business to understand each other better.
Customers need to feel that they are valued and important. An exciting and valuable reward for customers has the capability to attract new customers too, although it can be expensive when compared to nurturing existing good customers.
Moreover, there’s a greater chance of winning back lost customers that are enrolled in a loyalty program. You have certain advantages with returning clients who you do not have with prospects such as backtracking their purchase history, knowing where and how to reach them, identifying their preferred communication channel, and sending more personalized and relevant messages.
All the data from a loyalty program can be used to cater their varying needs better.
More Traffic to Your Site and Marketing
As you better understand your customers, potential customers, and purchasing trends through your loyalty program, data comes in.
These data and insights can help you reduce costs on promotion, advertising, and ultimately, give you a better marketing overall. Since your customers are already aware of your products/services and excellent customer service, they will deliberately go to your site for repeat purchases.
What’s more is that they may even refer your company to their friends, which will give you more sales without exerting much effort on your end.
Marketing identifies customers’ changing needs and provides perceived benefit in a case-to-case basis. Instead of spending time and money to the untargeted audience, the data collected from your loyalty program saves you by helping you segment and target your audience in the aspect of marketing and advertising.
Customers want to be recognized, offered better value, and kept in the knowledge of best offerings. Connecting with customers on an emotional level and building genuine relationships with them improve behavioral loyalty and increase profits.
According to Rosetta’s report “Customer Engagement from the Consumer’s Perspective,” engaged customers are 4X more likely to say they “appreciate when this brand reaches out to me” and 7X more likely to “always respond to this brand’s promotional offers.”
Further, connecting with customers through the medium they prefer such as a text message or email also helps in building relationships, as 56% of participants would switch to another company if an alternative offered more options to connect with them according to Harris Interactive.
Knowing your customers’ specific needs will allow you to develop creative and positive programs that will give them the most value. Trust is the key element which can be built up through excellent customer service management and problem assistance.
Create Brand Advocates
Brand advocates play a big role in every business, as they have the ability to influence other people and encourage them to try and use your product or services. As they bring in more customers, you can avoid spending on marketing and promotional activities.
According to Accenture, 31% of consumers are willing to recommend providers and brands to others. So, when a customer is pleased with your business, there is a great chance that they won’t hesitate to share their experience with the people around them or even through the internet. This is important because people are more convinced by a personal recommendation in purchase decisions.
Cap Gemini also revealed that “Fully engaged” customers (those with a strong attachment to the brand, or brand ambassadors) deliver a 23% premium over the average customer in share of wallet, profitability and revenue.
Concisely, brand advocates become your free word-of-mouth advertisements, considering that they had good experiences.
Helps Improve Overall Business Practices
Carrying out surveys, you can ask customer opinion about product satisfaction, customer service experience, etc. When you utilize customer impressions and feedback, you can strengthen the relationship between your business and your valued customers.
By understanding their needs, you make them feel important to you. This enables you to identify the gaps that still need to be filled to achieve excellent customer service.
Loyalty programs provide a multichannel vehicle through which a business can communicate an amazing brand experience, and which the consumer can become more attached to the company and its brand.
Aside from utilizing loyalty programs, it is also advisable to focus on your customer relationship management. Remember, if you do not treat your customers well, someone else will.
About the author:
Apple Pineda has served a number of clients as a content marketing specialist for 3 years. She’s a wanderlust in the making, often seeking adventures to live life to the fullest. She’s a writer for AVAIL.AT, a company that specializes in digitizing rewards programs for your employees or customers.