Loyalty programs became popular among companies when competitiveness commenced between producers of similar products. The more market was expanding the more competition was getting. Sellers encountered a problem with goods marketing, so that was the starting point of loyalty program development and implementation.
According to the stats, only a few of the new customer return back to the same store where they already made purchase before.
The key advantage of any loyalty system is that you can always stay in contact with your customers. It is very helpful in terms of building a trustful relationship and “buzzing” — production advancement and promotion.
Nevertheless, just having a traditional loyalty system is not enough. 2017 survey says that 42% of customers stop shopping with a brand that they are loyal to after 2 bad experiences.
So, what exactly is the loyalty program? Though the specific features of each system may be different, the main intention of such a program is still the same — this is a marketing system developed by a business that encourages purchasing behavior making customers stay loyal to the company. Thus the company offers convenience, store credit, prizes, or any other benefit that would entice the loyalty of a customer.
Still, hesitate about its implementation? Let us then see why this will be an extremely efficient program for your business too. We have prepared 5 main reasons for you to prove such a marketing strategy is worth creating.
Loyalty program will help you to increase the revenue
As far as customers trust your brand and are always in contact with your “being”, they will spend more. So, task #1 for sellers is to create an efficient “tool” to retain customers with the main aim of providing them the telling arguments to buy again. According to recent research, a well-prepared and implemented loyalty system leads to the following:
- Loyalty programs increase overall revenue by 5–10%
- Loyalty members spend 5–20% than non-members on average
- Loyalty program members buy 5–20% more frequently than non-members
Summing up, proven for use that increasing retention by only 5% rises revenue by 25–95%. We believe, there is no need in additional explanation why loyalty system could have a great impact on your business, is it?
Get more customers’ data
When a customer becomes a part of your loyalty system, all the related information remains lodged and hereby creates your database. This data provides exact numbers and statistics about customers’ behavior. Thus, you can monitor their choices and demands due to which you can transform your offers and make them more luring.
It will also highlight specific groups of customers and will allow to create the best prices and promotions for each of them. Moreover, you’ll see which channels and ways of promotion are the strongest ones so you can work more on them to increase purchases as well. After all, there are customers loyalty systems powered by Artificial Intelligence and Blockchain that are available to automate the data processing and introduce personal shopping in just a few clicks. This is something that giant companies spend billions before, now it is available just for a few hundred bucks for anyone.
The best way to diminish the payout to unprofitable customers is to separate them from the profitable ones
Who wants to pay more money than is necessary? A well-implemented loyalty system helps to fall off the customers who always buy only discounted goods. Such customer profiles are money-consuming for you and, consequently, unlucrative.
Spend more time on those who bring out the most part of your company’s profit. It also concerns the ways of promotion, channels and discount systems. Special offers also should be segmented.
Direct communication is the core of any loyalty system
That’s why it is so important to understand that emailing and mass text messaging are more powerful today than billboards and sign over the entrances. Thus, you’ll be able to reach all your customers with new products and service announcements, special discounts and coupons, while, otherwise, only those passing by your billboard by chance will be aware of your offerings. The input also helps to collect the statistics and analyze what kinds of offers are most effectual. It will help you to retain customers which we noted at the very beginning of the list.
The correct rewarding systems that business owner develops according to these statistics will never stop as it is an ongoing process. It works in a cyclic manner the following way: the client makes a purchase and is advantageously rewarded for that what inspires him or her to make more and more new purchases.
You don’t earn loyalty in a day. You earn loyalty day-by-day.
Loyalty program is one of the rightest ways for business owners to win fame
The aim remains the same — to earn customers’ appreciation and to boost customer database. Recollect yourself when you buy something or service and you are really impressed by its quality. How far your admiration goes? Sure, you will share your great experience with your friends and advice to employ these services or do shopping at this very place. This case works especially when the client is rewarded for his purchase. By this route, he will surely stay with you supporting your company and helping to promote it because of your generosity.
It is a great value for each customer to understand that, for example, this store not only wants to make money on them. It is a big deal to set ongoing communication with them and to maintain this connection with a special attitude. That brings a positive impact on your business.
So, do you still have doubts about the colossal benefit of such an effective marketing tool?
