Did you know that it costs up to five times more to attract new customers compared to retaining existing customers? It’s a wise idea to nurture existing customers rather than invest more in bringing new consumers to your business. Brand loyal customers are willing to buy from a particular brand again, and again.
Often, customer loyalty is a result of positive customer experience, and satisfaction they receive from the products or services. Customer loyalty is paramount to growing business and sustaining market competition. In a study found by Salesforce, “63% of high-performing marketers are already using loyalty program platforms”
What is a Customer Loyalty Program?
A customer loyalty program is a rewards scheme proposed by a company to customers who repeatedly make purchases. Generally, loyalty programs give away free merchandise, discount coupons, rewards points, or sometimes even advance-released products.
Loyalty programs are all about building more brand-loyal customers. The ultimate purpose of a loyalty program is to entice consumers to make a purchase frequently. Hence, own the appropriate loyalty program and retain your existing customers.
Why Are Customer Loyalty Programs Imperative For Your Business?
With the emergence of similar-looking products, market competition increased. If you have noticed, you may find similar products in supermarket aisles. So, it is crucial to stand out among the competition and keep maintaining your customer base.
To take a competitive advantage. The more reward schemes you have for your customers, the more profit you will earn. Still not convinced that loyalty programs are essential for your business?
Benefits of Implementing a Customer Loyalty Program
Here are 9 benefits of implementing a winning customer loyalty program.
1. Retain existing customers
The prime aim of a loyalty program is to retain more customers by offering them some sort of reward. In order to get the perks of rewards, customers make frequent purchases. Numerous research studies show a significant relationship between loyalty programs and customer retention. And, once you have higher customer retention, the ROI increases.
2. Improve brand reputation
Customer loyalty solutions have the potential to attract repetitive business and new customers. Often, with the rewards, customers feel esteemed and see a distinct value in your brand. Moreover, the chances of WOM (Word of Mouth) increase with the remunerations. It is one of the cost-effective and compelling ways to increase sales. So, more customers acknowledge your business with a unique view that increments brand reputation.
3. Makes your customers happy
Setting up a loyalty program for your business indicates that you are not only interested in making more money but also you want to build a relationship with your potential customers. Customers recognize values as you offer them additional privileges with the product they purchase. Thus, make your customers happy and keep growing your business.
4. Get consumer data
As soon as customers register for a loyalty program, their data gets registered in the system. With this data, you can analyze their preferences, purchase habits, and many other essential details to enhance customer satisfaction. This data also allows marketers to estimate the results of exclusive promotions based on supplementary purchases, the use of new channels, or shortened time between purchases.
5. Attract more new customers
A reliable loyalty program is sufficient enough to attract new consumers. Just market your discount or reward programs and more new customers will join your mailing list. And, when the customers find good perks within reach, they are going to attract more customers too.
6. Increase sales
Loyalty programs are designed to offer multiple ways to grow your business. As you attract more new customers and retain existing customers, they are going to make frequent purchases. It means that your sales will drastically expand and generate more revenue.
Ultimately, you are getting positive outcomes with loyalty programs. The loyalty benefits are amazing and contribute to long-run success for a business. From getting more customers to increasing profit, the right loyalty program drives fruitful results for a company.
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How to Create a Customer Loyalty Program?
No matter how large is your business, a customer loyalty scheme is remarkably significant for business growth. Also, enhancing customer loyalty should be a priority for all businesses. There are certain approaches to building customer loyalty. Here you can find it:
- Share your business values with your customers
- Provide exceptional customer services
- Build community and encourage customer interactions
- Try to exceed the expectations of your target audience
- Increase customer satisfaction
- If you make a promise to a customer, never fail to deliver it
- Never delay admitting your mistake
- Attract customers with an innovative approach
- Propose personalized services
- Train your staff to serve respectfully to the customers
- Get customer feedback to improve services
- Periodically conduct surveys to understand your customers
- And, of course, offer a loyalty programs strategy
These are some of the important strategies to build loyal customers. Now, let’s understand what is a loyalty program, and how it can be useful for your company.
As every business is unique in its own terms, loyalty programs should be unprecedented according to a different business. Here you can find the fundamental strategies to build a flourishing loyalty program for your business.
1. Perform Adequate Research
You should never create a loyalty program just because you can, or your business has the potential for the same. You need to do adequate research about your customers and the latest industry trends.
Further, you can use the consumer’s data from a variety of sources such as website analytics, mailing list subscribers, sales history, etc.
The research allows a tentative prediction about the likelihood of your loyalty program. Since you are gathering more information while doing research, you will be able to adjust your products/services, program, marketing channels, and many other important aspects of the loyalty programs.
2. Set Budget
After you have conducted sufficient research work, it’s time to focus on the budget. You need to be clear about your spending while offering a massive reward to your customers. A predefined budget allows you to take calculated risks for your business.
A well-managed budget for loyalty programs often reveals profitability in the end. You can also consult the industry average when looking for above-average growth while the program is active.
3. Simple Attracts More
Simple and easy-to-comprehend loyalty programs attract more customers quickly. Obviously, when you are thinking about implementing the loyalty strategy, you are forecasting favourable results for your business.
For instance, the giant Flipkart is offering rewards points for purchasing from the e-commerce platform. The point-based loyalty programs are self-intuitive.
Customers can easily understand the rewards points, and it is also easy for you to manage each point of sale. After gaining certain points, the member can redeem the points and enjoy discounts or other rewards.
4. Offer Worthwhile Rewards
Your rewards should have some extraordinary value to offer. It can’t be something that you can afford but does not have any significance. Whether you offer rewards points on the purchase, set a contest, or add sweepstakes look for the customer’s benefit first.
Customers will be attracted to your business, once they find distinct advantages in your loyalty programs. So, do not forget to keep your potential customers in mind while setting up a loyalty plan.
5. Keep Communication Constant
When you have placed agendas for the right program that best suits your business, stay connected with members. Go for email campaigns, direct mailing, or call, choose the right method to communicate the program with your target audience.
Constant communication allows you to understand your customers thoroughly. And, based on the communication, you can gauge which program will be more adaptive to the customers.
6. Market Your Program
It is obvious to publicize whatever loyalty program you have set. If your customers do not know about the rewards, your business is not going to get any benefits. Emails, social media posts, advertisements (offline or online), etc. are excellent techniques to market a loyalty program. Encourage your staff to introduce it to the customers.
For example, if you are planning a loyalty program for your retail outlet, you place posters or signs to trigger customer participation.
7. Tactics to Encourage Client Loyalty
Once you have chosen an appropriate loyalty program, set tactics to measure the success of the program. Setting tactics to encourage client loyalty will help you maintain your brand values. The tactics are essential to trigger a client’s actions to make a purchase.
For that, you set tactics such as premium services while the promotion is going on, annual event sponsorship, emergency contact, secure website access, etc.
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? Suggestion Read: Headless Loyalty Program: Benefits, Technologies & Integration Steps
How LoyaltyXpert Help You
Creating a customer loyalty program in this day and age should be about more than just giving out points and coupons. It’s a one-of-a-kind opportunity to create an experience unique to your brand, which your competition cannot replicate. We at LoyaltyXpert are here to help you by offering sophisticated, enterprise-ready loyalty technology.
We assure a perfect mix of functionality, affordability, and versatility to manage and operate your loyalty programs for your business. Our highly trained experts would be more than ready to help you bring your ideas to life using LoyaltyXpert enterprise technology. Simply contact us today to book a demo!