Month: December 2020

Why you should invest in loyalty programs.

Are you looking to have more returning customers? You probably want the kind of customers who spend more and tend to visit your store often. If yes, you need a loyalty program as it is the perfect tool to add to your customer retention arsenal. 

If you are wondering why you need a customer loyalty program, you may want to know that it has the tendency to make you more money. However, making more money with a customer loyalty program is dependent on whether you do it the right way. 

Plus, you should know that keeping a current customer costs you 3 to 10 times less than acquiring a new one. This is also dependent on the industry you are functioning in. Research on WordStream affirmed that small businesses tend to spend between $9,000 to $10,000 trying to attract new leads or customers on Google paid search campaigns in just within a month. 

Dare to imagine how efficient you could be if you could switch that expenses to reactivating customers and getting repeat businesses and sales. So now we know that reactivating customers is, quite important but how should you justify investing in customer loyalty programs or in a loyalty marketing strategy. 

Well, this is the core reason for this article. In this article, we will be discussing several reasons why you need a loyalty program in your business. 

Strengthen a positive customer experience

Based on research by Forbes, 79% of online shoppers will quickly turn to a competitor if they experience poor customer service in the first week of their shopping. This is a fast way to lose a customer. At this stage, it doesn’t just deal with customer support, but you need to have the means to show your customers that you value them for purchasing from you. 

A loyalty and reward program offers the perfect vehicle to achieve this aim, but how can you do this. When customers observe that they can collect incentives or points in exchange for purchases made, their first thoughts would be that they are getting something for their money besides the products they purchased. 

This positive experience evokes a desire in your customers, allowing them to return the favor by purchasing from you again. In a loyalty marketing program, this is known as reciprocity. 

Let customers know that it is worth it to come back to your store

The point we are trying to make here is that customers are loyal because they want to save money. This is the traditional loyalty and reward program approach that appeals to a vast range of customer groups. However, this strategy isn’t enough nowadays as 76% of shoppers expect some sort of recognition aside from monetary benefits. This recognition can come as a special treatment perk that gives them a faster, smoother, and more customized and personalized shopping experience. 

Encourage customer referrals

If you didn’t know the power of word-of-mouth advertising, then you should understand that loyalty programs can give you that. When a customer is satisfied, they are very likely to refer their friends to your business or company. 

The most common strategy to use here is a double-sided reward mechanism where both the referrer and his referral real earn or benefit from the process. The power of customer referrals or word-of-mouth advertising can beat even the most optimized Facebook ads or AdWords ads. This is because friends only refer friends who are genuinely interested in your products. 

Build social proof

Forbes ascertained that 81% of shoppers research products, read reviews, compare prices before making their purchases. You probably do the same thing before buying anything. While a loyalty program would do well to improve your customer satisfaction, it also goes further to remind you to reward customers for leaving positive reviews or using certain Instagram hashtags while posting pictures or making content around your products. 

This is what is referred to as user-generated content, and it increases trust and confidence towards your online store and even assists other customers in making buying decisions faster. 

Maximize brand advocacy

While you may be quick to point the benefits of discounts, you should understand that 77% of transaction-based programs often fail in the first two years. The reason behind this circumstance is that you can’t always win a customer’s heart with special perks and discounts forever. 

This is because your competitors can offer the same monetary benefits, and offering discounts is a sure way to let money leak out of your business. However, you can avoid this failure by leveraging loyalty programs. But you should understand that loyalty marketing programs should be reserved for the top 20% of all your customers who generate more than 80% of your total Revenue. 

Also, understand that these customers who do the most spending are not staying with you because of the exclusive discounts; they are staying with you because they love your brand. And a loyalty and rewards program is a perfect opportunity to strengthen that engagement. 

The more they engage with your brand, they also help you promote it. As compared to other customers, these loyal customers are more effective in persuading others to buy from you. 

Garner valuable data

Loyalty programs are a seamless and legitimate way to gather valuable data. When your loyal customers sign up for your loyalty and reward programs, it gives you an opportunity to offer a personalized experience based on the data you’ve gathered. 

This can help you come up with targeted marketing campaigns that aim to increase your bond with your customers and even help you implement a referral program. 

Having actionable data is one of the best ways to boost sales as you will know exactly how to solve and treat your customers. 

Now, you should be able to see the reasons why you should have a loyalty marketing program in your business. Not only will this drive your business forward, but it will keep customers glued to your company. Plus, customers will come to love your brand naturally, and this comes with other exclusive benefits.

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