Personalized loyalty programs are fast gaining traction in the corporate world. Tailoring their loyalty programs for different types and groups of customers, businesses can incentivize them to spend more and retain them for a long time.
As per a Bain & Company study, an increase of just five percent in customer retention rate can enhance profit by 25 to 95 percent. That’s the reason businesses are finding out novel ways to retain their customers and personalizing loyalty programs is one of those.
At LoyaltyXpert, a reputable loyalty solution in India, we have helped many businesses develop personalized loyalty programs. In this blog post, we discuss seven ways businesses can leverage personalized loyalty programs to boost sales and revenues. Read on to find out.
1. Provide special offers or services to different customer groups
Providing a unique bouquet of offers and services can go a long way in retaining customers and ensuring their loyalty. Many businesses are using this method to reward and incentivize different groups of customers. Under this, customers belonging to a specific group are entitled to special offers, privileges, discounts, services, and more. It will motivate customers who are happy with their present offers and privileges to continue with the service or subscription. It will also encourage customers who want better offers and deals to upgrade their subscription package.
2. Foresee the needs of loyal customers
Personalized loyalty programs enable businesses to predict the needs of loyal customers and help them come up with the most relevant products and services that can fulfill their customers’ needs. Businesses that have personalized loyalty programs in place know the shopping history and shopping patterns of their most loyal customers. They can use the previous browsing and shopping information to predict what their customers may need in the future. By showing the relevant recommendations, businesses can encourage their customers to make a purchase and avail of attractive offers or discounts.
3. Build strong connections with customers
By providing their customers with exclusive deals and offers, businesses that have personalized loyalty programs build stronger connections with their customers. Such tech-savvy businesses leverage loyalty program software and bespoke programs to nurture robust relationships with their customers. By doing so, they are better able to understand their customers’ unique needs and develop a more personal relationship with them. The businesses that play their cards right and do the right things in their loyalty programs become a part of their customers’ lifestyle.
4. Win the trust of customers
The cost of acquiring a new customer is five times more than the cost of retaining an existing customer. Smart businesses understand this and focus more on retaining their existing customers than investing a lot more money and energy to acquire new customers. Besides, keeping the existing customers happy can bring in a lot of new customers with the former’s word-of-mouth publicity. Businesses that tailor personalized loyalty programs for their customers make them feel extremely special and win their trust. When they win the trust of their customers, they are less likely to lose them to their competitors. Apart from feeling safe doing business with them, their existing customers also feel that they are getting better value for their money.
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5. Get more and positive customer reviews
Some statistics show an interesting correlation between reviews and customer behavior.
- 90 percent of customers visit a business only after reading positive reviews
- 72 percent of customers look for reviews before taking an action
- 31 percent of customers tend to spend more on a business that has excellent reviews
Businesses can leverage personalized loyalty programs to get more and better customer reviews and user-generated content. They can provide additional loyalty points to reward their most loyal customers for their positive reviews. They can also use marketing platforms and loyalty program software to remind their loyal customers to write reviews.
6. Build a community
Successful businesses leverage personalized loyalty programs to build a strong and influential community around their products and services. This can be a slow process, but when done right it will catch momentum over time and snowball its way to massive success. When Harley-Davidson started in 1903, no one could have imagined the level of success it has achieved so far and the massive community it has built around the world. The concept of community is not the monopoly of established companies such as the iconic bike maker, or Japanese conglomerate Sony, which has a community around its video game product Playstation. Relatively new companies such as Starbucks and SAP, which started in 1971 and 1972 respectively, also have dedicated communities.
7. Provide the opportunity to do something good
Some highly successful businesses such as TOMS Shoes built effective and highly-lauded personalized loyalty programs that provided their customers to do something good and donate for a cause. In the case of TOMS, the company pledged to donate a pair of shoes for every pair sold. It touched a chord with those people who want to do something for the underprivileged and give back to the world. When it comes to giving back and donating to a good cause, millennials are more willing than people of previous generations. A study found that more than 60 percent of the former would like to donate their loyalty rewards to a cause compared to 40 percent of baby boomers. More and more businesses are coming up with such loyalty programs to enable their customers to get benefits as well as give back to the world.
Finally, it may be concluded
Personalized loyalty programs are fast gaining momentum among businesses across the world. More and more businesses are looking to tailor their loyalty programs for different types of customers and using different methods to leverage the programs to enhance their sales and revenue.
At LoyaltyXpert, we have helped many of our clients in tailoring personalized loyalty programs for their customers. If you want a customized loyalty program for your business, contact our team of loyalty experts to know how we can help you.