Customer loyalty programs have been criticized in the industry as cheap promotional devices, always giving for nothing. Despite this they’ve stayed for more than a decade; and more companies are jumping in on loyalty pays. Why? Because it is effective.
What are Loyalty Pays?
A loyalty program is a marketing strategy designed to encourage customers to continue to shop at or use the services of a business associated with the program.
What’s its purpose?
As the name suggests Customer Loyalty Programs are adopted by companies in pursuit of higher sales and boosting the brands affinity. The point of starting such programs is to continuously attract and keep customers happy.
Why it’s important
It costs five times more to acquire new customers than it does to retain current customers.
And did you know existing customers are 50% more likely to try a new product of yours as well as spend 31% more than new customers?
Members of top-performing loyalty programs are 77% more likely to choose your brand over the competition.
20% of your current customers will make up 80% of your company’s future revenue.
A 5% increase in customer retention increases profits by 25% to 95%.
Whether or not you currently have a loyalty program that encourages your customers to return and conduct more business with you, the above statistics clearly show the importance and impact of a successful customer loyalty program.
How it affects you
Customers convert and spend more time and money with the brands to which they’re loyal. These customers also tell their friends and colleagues about those brands, too which drives referral traffic and word-of-mouth marketing.
Customer loyalty also fosters a strong sense of trust between your brand and customers — when customers choose to frequently return to your company, the value they’re getting out of the relationship outweighs the potential benefits they’d get from one of your competitors.
How do you do it today?
Be as generous as your customers.
Offer them a great deal for both you and them. Customer loyalty programs tend to look more like a scheme for customers to spend more – that’s why loyalty programs that are truly generous stand out.
Show your gratitude.
Offering loyalty programs does not express your gratitude. Don’t forget to include thank you messages and notes after purchase.
Scratch the program completely.
Build loyalty by providing customers with awesome benefits related to your business and product or service with every purchase.
This minimalist approach works best for companies that sell unique products or services.
Conclusion
While loyalty pays have been proven to be effective one’s brand/company should simply not rely on such programs to keep customers loyal. It all comes down to the quality and purpose of the brand. Loyalty rewards should only be another incentive on top of buying a good quality product from a well presented brand.
Always keep in mind that a happy and satisfied customer equals a loyal one.
Also read, 15 CONVERSION RATE OPTIMIZATION TACTICS TO INCREASE YOUR ONLINE STORE OR ECOMMERCE STORE SALES
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