Loyalty programs are powerful and effective tools for brands, offering numerous benefits. They help businesses drive more meaningful and lasting relationships with their customers and increase sales.
Launching a loyalty program could be a smart business decision that helps you overcome key loyalty challenges.
Before investing in a loyalty program, discover all the benefits that it can offer to your brand and the value that will add to your customer retention efforts.
Benefits of customer loyalty programs
Implementing a customer loyalty program can benefit a business in many ways. Find below all the reasons why launching a loyalty program can transform your relationship with your customers and maximize their lifetime value.
Get a deeper understanding of customer motivations
Loyalty programs can help you collect useful knowledge about your engaged customers. They help you explore the categories your current customers belong to, the value of each group of customers and get to know their shopping behavior, interactions and motivations. The key is to use these customer insights to deliver a compelling customer experience which then leads to incremental sales.
Create brand advocates
Your end customers are people and people talk about their experiences with each other. They also like to share their experiences all over social media, either positive or negative. Through a loyalty program, you are giving them one more good reason to talk about you, your products and your services!
Did you know?ThinkwithGoogle
89% of people are likely to recommend a brand after a positive brand experience on mobile.
Retain existing customers
According to Gartner, 80% of a company’s revenue comes from just 20% of its existing customers. Taking into consideration that attracting a new customer costs 5-7 times more than keeping an existing one, you should start focusing more on marketing to the shoppers you already have. Customer loyalty programs will help you nurture and keep the most profitable customers engaged and happy.
Increase Customer Lifetime Value (CLV)
Measuring customer relationship is essential for getting closer to your customers. Invest in a loyalty program to be able to track customer satisfaction and identify which messages have higher engagement and conversion rates. You can use collected data to cross-sell and up-sell and increase demand during low seasons. By knowing what works best for your customers, you can make smarter decisions and maximize Customer Lifetime Value.
Related: 6 + 1 tips for successful CLV
Drive customer engagement
Today’s connected customers have access to more choices and can easily switch to other brands. Basically, they have fewer reasons to be loyal than ever before. But consumers aren’t necessarily just interested in saving money. Enhanced customer service, mobile rewards, and the ability to earn special treatment have become more important over the past few years. Provide this kind of experience to your customers and give them reasons to engage with your brand through a loyalty program.
When it comes to loyalty programs, emotions can have a great impact on how customers engage with your brand.
The following video will help you get a deeper understanding of which emotions matter to consumers and how they really feel about participating in loyalty programs.
Boost business growth
Loyalty programs can truly transform your business. How? They are an effective way to identify your most valuable customers and convert them into repeat buyers. So, you keep your focus on the value you provide to your best customers in order to come back and spend more.
Enhance customer experience
61% of consumers say they want loyalty program points & rewards in return for personal data, and 61% expect discounts and other special offers.Retail Dive
The typical approach to customer loyalty emphasizes on discounts and offers rather than building a relationship. As a result, loyalty programs fall short of creating real and lasting loyalty. Loyalty has become synonymous with points, discounts, and rewards — not with the customer’s emotional loyalty and devotion to a company, product, or service.
So, the best way to create customer loyalty today is to rethink your approach and invest in tools and technology that enable you to build memorable customer experiences.
Whether you are designing a new loyalty program, refreshing an old one, or evaluating a current one, QIVOS has the know-how to help you build a loyalty strategy that will accelerate profits and build long-term relationships with your customers.