Benefits of Customer Loyalty Programs
Loyalty programs have been gaining new momentum in recent years. They not only offer the business numerous benefits but they have also become a standard in the consumer experience. Having an effective loyalty program is an important factor in retaining exisiting customers and increasing shopping loyalty.
These programs can differ greatly between businesses but at their core they are a marketing system that offers rewards for the purchasing behaviour. A classic example is offering a simple buy 9 coffees and get your 10th free, promoting that repetition to your business.
While implementing a customer loyalty program may seem a daunting task, in the long run it can have several benefits.
With an effectively implemented Customer Loyalty program, your businesses customer retention will be boosted and your overall sales increased. Loyal Customers trust and know your business and will therefore return and likely spend more. Just having a small increase in customer retention can provide a larger boost in revenue. And if you are giving these reoccurring customers incentives that are on trend with their spend habits, you’ll encourage them to return and of course spend more.
Think of your customer loyalty program as an investment. Creating and implementing it initially may take some time and money but if it effectively retains customers it can in fact save your business money. Acquiring new customers costs more than it does to keep existing customers, with figures showing this cost could be five times more. This then makes customer retention a far more cost effective method to boosting your business.
Attract New Customers
There are several ways that a Customer Loyalty Program could attract new customers. Giving your customers a reason to stay and shop with you will make them feel like you care. Growing this relationship by incentivising them will not only keep them coming back, but also encourage them to share their experiences with friends and more. Another way to use the program to attract new customers is offering discounts for signups. This could grow your mailing list because discounts can be a hell of an incentive. Having a loyalty program that has easily achievable rewards is another way to attract new customers. If a customer sees the rewards are within reach they could be more likely to try your brand.
Grow Customer Relationships
A personalised loyalty program will make your customers feel like they have a connection to your business. This relationship can be a huge benefit when those untimely bad days pop up that may impact their visit. Incorporating rewards for occasions like birthdays and anniversaries can help nourish this relationship. With your Point of Sale system tracking their purchases trends and history you can create targeted marketing that can take your relationship to the next level. Notice they buy a particular range of items? Well you could offer them a percentage discount or buy 2 get one free offering that seems personalised and inviting.
Open up Communication Channels
Using your Point of Sale System to record the people in your Customer Loyalty Program will allow you to open up forms of communication. Having channels of direct communication like email is particularly useful in emergency situations like product recalls. Email communication will also allow you to promote sales, especially if you want to run out a particular item. Promote special events and even showcase new and exciting products.
Loyalty programs are an extremely beneficial marketing tactic. They will not only help to increase sales within your business but develop a brand image that is backed by a community of loyal customers.
See Also: Growing Repeat Business