A loyal customer base is key to a stable and thriving business nowadays. A loyal customer base who purchases from you on a regular basis doesn’t just help you stabilize the business but also helps in getting the word out. Customers who come back or what we call ‘the repeating customers’ can increase sales by 47%. Customer loyalty programs are proven methods to sustain and grow profits. 5% increase in customer loyalty can increase the profits of the company by 20%. However, in the current market scenario having a traditional loyalty program is just not enough to survive let alone make profits. Brands have to incorporate the customer’s social and behavioral actions and expand loyalty rewards. But customer retention is the biggest obstacle that almost 60% of the business face.
Just having a loyalty program in place isn’t enough. It needs to be engaging, compelling, and beneficial for the business, customers, as well as the channel partners.
Here are a few benefits of having a carefully planned and the right loyalty program:
Many companies nowadays continue to try to attract new customers but what they should be doing is retain old customers. Retaining old customers is far less expensive than acquiring new ones.
The reason behind this is that the customers are already loyal to the brand and are likely to spend more hence increasing the revenue.
Make customers feel appreciated
A loyalty reward program that is personalized according to the social and behavioral actions of every individual customer, they feel appreciated and it sets an emotional connection with your brand.
A good loyalty program is never stagnant. It keeps on creating better communication with the customers, measures loyalty through engagement on a daily basis, gather valuable data from customer behavior, etc.
We certainly know what’s worse than dying loyalty is a dying loyalty program. Undying loyalty is something which is very rare and hard to maintain. So what should a basic reward program constitute of?
Here are a few key elements that every loyalty program should have:
Loyalty programs should be easy for customers to join and use. One thing that customers don’t want is giving out their personal details or information when they are signing out. Make sure the customers know that it’s easy and be sure to reveal the benefits of the program upfront.
One thing that customers love is exclusivity and personalized rewards. If something is available to everyone, it’s usually special to no one.
Rewards should be compelling enough to make the customers do some work too but not too much. You can’t afford to give away rewards for every other purchase, but it can’t require 20 purchases to redeem either.
At the end of the day, it’s all about building your brand and thinking about why your customers come back to you. This should be at the core of every reward you offer.
In conclusion, having a loyalty program is not enough. Keeping up with market trends and consumer behavior is also important. So start with understanding the customer base.