Businesses are practising a wide range of tricks and strategies that attract customers. With an increased customer base, companies have higher chances of improving profitability. A promotional offer is a great way to increase sales for a certain period. They are enticing customers to make purchases with various promotional offers that include coupons and vouchers. Besides, companies use loyalty programs too. It helps in retaining more brand loyal customers.
However, marketers often get confused about choosing between a loyalty program or coupons/vouchers. Go through this blog, and you will get your answer.
Before we move on exploring the topic in detail, let’s clear the basics.
What is a loyalty program?
A loyalty program is a technique to entice customers buying behavior, where a customer is making frequent purchases with a brand or business. When customers make a purchase, they earn some kinds of rewards. It is a marketing strategy to attract and retain more brand loyal customers.
What is a promotional offer?
Promotional offer is one time discount to the customers. Usually, it is in the form of coupons, vouchers, or sale. Shoppers easily get attracted to promotional offers due to the massive price discounts. However, it does not help in gaining brand-loyal customers.
Now, let’s explore which scheme you should use to generate more revenue; loyalty programs or coupons.
Whether you choose a loyalty program or introduce a promotional offer through coupons, you need to make a financial investment. But, offering vouchers demands expenses every time you introduce a new offer. Your offer will not be the same all the time, so you need to print separate coupons each time. Besides, you may not use it all to distribute to the customers, which causes loss.
On the other hand, the loyalty program requires less frequent investment than offering coupons and vouchers. Loyalty program software only requires a one-time investment to reward your customers and keep them attracted to your business.
Studies indicate that offering coupons may not be viable for some businesses since some people may only redeem the coupon without returning to make another purchase for the full price.
On the contrary, a loyalty program provides some kinds of rewards on each purchase. This is a sustainable approach that helps to sustain market competition. It also facilitates offers of special discounts through coupons within the system.
Sometimes coupons and vouchers, lessen the value of your products. Special discounts negatively affect the perceived value of your brand. Plus, you can not always offer discounts with a promotional offer.
Nonetheless, the loyalty program allows you to reward the customer on a purchase that adds value to your products/services. You are not reducing the price necessary through the loyalty program. You are offering a value-added experience while customers’ do business with you.
keeping a purchase track record is beneficial for companies. The details help in making a vital decision for a business. When you emphasize publishing coupons to increase sales, the tracking becomes a bit complicated process. Sometimes, you may not be able to get accurate insights as well.
Conversely, a loyalty program usually operates through software that offers easy tracking of all the details, from the customers’ profile to purchase and rewards. The system stores all the details accurately.
This data is essential to adopt new business strategies. Also, it helps significantly in business expansion.
Why choose a loyalty program over any other promotional offer?
The loyalty program offers a feasible way that creates win-win for both entities; customers and businesses. Shoppers get rewards for the purchase. They will make a frequent purchase to access more rewards. Eventually, they become loyal to a brand. Have a look at the key considerations to choose loyalty program for your business;
- Improves communication with customers
- Delivers value-added experience to customers with each purchase
- Gather valuable customers’ data and insights
- Boost sales and increase revenue
- Attract and retain new customers
- Reduce unprofitable customers
These benefits indicate that loyalty programs are far better than any other promotional offer for a business.
Besides, these days, businesses are using loyalty program software on a serious note. They use an app to track users’ activity and reward them accordingly. Loyalty program apps are a widely accepted approach that helps to gain loyal customers.
A company with more brand loyal customers can sustain market competition and expand business growth quickly and efficiently. Further, loyal customers are an asset to a business. They not only make frequent purchases but play an essential role in word of mouth marketing. And, a loyalty program is topmost alternatives to retain brand-loyal customers.
Hence, choose a loyalty program over any other promotional means, including coupons or vouchers. It is a cost-efficient and lucrative method to entice customers to make frequent purchases with a brand. Loyalty programs not only retain the existing customers but also helps in attracting new customers.
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