5 Benefits of Having a Loyalty Program
Just as you would motivate an employee with incentives and bonuses, rewarding customers whenever they purchase from you and promote your business to others is win-win.
Statistics has it— Nielson Global Survey of Loyalty Sentiment presented that providing discounts and free products as retailer loyalty program are biggest attractions for customers.
Having a loyalty program can be a lot of work and can even take up resources, but let’s weigh in the benefits of having a loyalty program, shall we?
1. Establishes Customer Retention.
One way to give value to your existing customers is incorporating a loyalty program that will allow them to enjoy doing business with you. Redeeming perks for buying engages your customers and boosts their enthusiasm to stay with you. Through a loyalty program, it also allows you to understand your current customer’s buying patterns and helps you firm up a better rewards system that they will appreciate. Regardless if the competition is stiff, these customers will pledge allegiance to you if they’re on board your loyalty program.
2. Grows Your Client Base.
An effective loyalty program encourages potential clients to be regular patrons. While it is a fact that attracting a new customer is 6-7 times more costly than retaining an existing customer, the investment may yield good returns by 10%. Also, it is important to note that returning customers spend 67% more than first-time buyers, so you would want to take care of them as well. Evaluate these customers’ spending habits and shape up a loyalty program that is cheaper yet creative.
3. Values Customer’s Worth.
Through loyalty program, faithful and long-time customers are given special privileges for staying loyal to your brand. When a customer has stayed with you for a good number of years, it is only proper that you show them your appreciation and allow them to level up in the hierarchy of your rewards system. This shows that your company acknowledges the customers’ value on the growth of the business.
4. Builds Customer Relationship.
Loyalty programs let you review your existing customers’ spending habits. With this data, you may now engage with them in more ways than offering another product or service. Aside from earning points, customers are also given exclusive opportunities, which allow you to build relationship with them. When companies establish a meaningful relationship with their customers, they will not only become life-time clients but effective advocates of your brand too.
5. Programs can be customized.
Nowadays, with technology and internet paving the way for even small businesses to compete in the global market, companies can customize their loyalty programs to reach specific groups in their clientele. For example, create special shopping hours for customers who frequent your retail store. Provide exclusive access to a special online product catalogue to those who shops regularly on your e-Commerce site. Give special discounts or exclusive giveaways to customers who usually purchase more expensive merchandise. Allow privilege shopping opportunity with a partner business for patronizing a certain product or service. Give special deals for faithful customers who are parents that will also benefit their kids.
The ideas are endless! You only have to understand and get to know your most loyal customers and discover what encourages them to continue doing business with you.
With an effective loyalty program that is well implemented and properly carried out, new customers and faithful patrons will love your brand more than ever. Ultimately, having a high-value and inspiring loyalty program shows how much you value every individual who chooses to spend their money on you and promotes a better relationship that benefits both your company and your customers.
1. Why Big Companies All Have Loyalty Programs