Did you know that it costs up to five times more to attract new customers compare to retain the existing customers?
It’s a wise idea to nurture existing customers rather than investing more in bringing new consumers to your business. Brand loyal customers are willing to buy from a particular brand again, and again. Often, customer loyalty is a result of positive customer experience, and satisfaction they receive from the products or services. Customer loyalty is paramount to grow business and sustain market competition.
But, how to Build Customer Loyalty?
No matter how large is your business, customer loyalty is remarkably significant for business growth. Also, enhancing customer loyalty should be a priority for all businesses. There are certain approaches to build customer loyalty. Here you can find it;
- Share your business values with your customers
- Provide exceptional customer services
- Build community and encourage customers interactions
- Try to exceed the expectations of your target audience
- Increase customer satisfaction
- If you make a promise to a customer, never fail to deliver it
- Never delay admitting your mistake
- Attract customers with an innovative approach
- Propose personalized services
- Train your staff to serve respectfully to the customers
- Get customer feedback to improve services
- Periodically conduct surveys to understand your customers
- And, of course, offer a loyalty program
These are some of the important strategies to build loyal customers. Now, let’s understand what is a loyalty program, and how it can be useful for your company.
So, what is a loyalty program?
A customer loyalty program is a rewards scheme proposed by a company to customers who repeatedly make purchases. Generally, loyalty programs give away free merchandise, discount coupons, rewards points, or sometimes even advance released products.
Loyalty programs are all about building more brand loyal customers. The ultimate purpose of a loyalty program is to entice consumers to make a purchase frequently. Hence, own the appropriate loyalty program and retain your existing customers.
Why are loyalty programs imperative for your business?
With the emergence of similar-looking products, market competition increased. If you have noticed, you may find similar products in supermarket aisles. So, it is crucial to stand out among the competition and keep maintaining your customer base. Loyalty programs are key to take a competitive advantage. The more rewards scheme you have for your customer, the more profit you will earn.
Still not convinced that loyalty programs are essential for your business? Have a look at the benefits of loyalty programs.
Benefits of a Customer Loyalty Program
1. Retain existing customers
The prime aim of a loyalty program is to retain more customers by offering them some sorts of rewards. In order to get the perks of rewards, customers make frequent purchases. Numerous research symbolizes a significant relationship between the loyalty program and customer retention. And, once you have higher customer retention, the ROI increases.
2. Improve brand reputation
Customer loyalty programs have the potential to attract repetitive business and new customers. Often, with the rewards, customers feel esteemed and see a distinct value in your brand. Moreover, the chances of WOM (Word of Mouth) increases with the remunerations. It is one of the cost-effective and compelling ways to increase more sales. So, more customers acknowledge your business with a unique view that increments brand reputations.
3. Makes your customers happy
Setting up a loyalty program for your business indicates that you are not only interested in making more money but also you want to build a relationship with your potential customers. Customers recognize values as you offer them additional privileges with the product they purchase. Thus, make your customers happy and keep growing your business.
4. Get consumer data
As soon as customers register for a loyalty program, their data gets register in the system. With this data, you can analyze their preferences, purchase habits, and many other essential details to enhance customer satisfaction. This data also allows marketers to estimate the results of exclusive promotions based on supplementary purchases, the use of new channels, or shortened time between purchases.
5. Attract more new customers
A reliable loyalty program is sufficient enough to attract new consumers. Just market your discount, or reward programs and more new customers will join your mailing list. And, when the customers find good perks within the reach, they are going to drag more customers too.
6. Increase sales
Loyalty programs are designed to offer multiple ways to grow your business. As you are attracting more new customers and retaining existing customers, they are going to make frequent purchases. It means that your sales will drastically expand and generate more revenue.
Ultimately, you are getting positive outcomes with loyalty programs. The loyalty benefits are amazing and contribute long-run success for a business. From getting more customers to increase profit, the right loyalty program drives fruitful results for a company.
How to Build a Customer Loyalty Program?
As every business is unique in its own terms, loyalty programs should be unprecedented according to a different business. Here you can find the fundamental strategies to build a flourishing loyalty program for your business.
1. Perform adequate research
You should never create a loyalty program just because you can, or your business has the potential for the same. You need to do adequate research about your customers and the latest industry trends. Further, you can use the consumers’ data from a variety of sources such as website analytics, mailing list subscribers, sales history, etc.
The research allows a tentative prediction about the likelihood of your loyalty program. Since you are gathering more information while doing research, you will be able to adjust your products/services, program, marketing channels, and many other important aspects of the loyalty programs.
2. Set budget
After you have conducted sufficient research work, now it’s time to focus on the budget. You need to be clear about your spending while offering a massive reward to your customers. A predefined budget allows you to take calculated risks for your business.
A well-managed budget for loyalty programs often revels profitable at the end. You can also consult the industry average when looking for above-average growth during the program is active.
3. Simple attracts more
Simple and easy to comprehend loyalty programs attract more customers quickly. Obviously, when you are thinking about to implement the loyalty program, you are forecasting for the favourable results for your business.
For instance, the giant Flipkart is offering rewards points on purchasing from the e-commerce platform. The point-based loyalty programs are self intuitive. Customers can easily understand the rewards points, and it is also easy for you to manage each point of sale. After gaining certain points, the member can redeem the points and enjoy the discounts or other rewards.
4. Offer worthwhile rewards
Your rewards should have some extraordinary values to offer. It can’t be something that you can afford but does not have any significance. Whether you offer rewards point on the purchase, set a contest, or add sweepstakes look for the customers benefit first.
Customers will attract to your business, once they find distinct advantages in your loyalty programs. So, do not forget to keep your potential customers in mind while setting up a loyalty plan.
5. Keep communication constant
When you have placed agendas for the right program that best suits your business, stay connected with members. Go for email campaigns, direct mailing, or call, choose the right method to communicate the program with your target audience. The constant communication allows you to understand your customers thoroughly. And, based on the communication, you can gauge which program will be more adaptive to the customers.
6. Market your program
It is obvious to publicize whatever loyalty program you have set. If your customers do not know about the rewards, your business is not going to get any benefits. Emails, social media posts, advertisements (offline or online), etc. are excellent techniques to market a loyalty program. Encourage your staff to introduce it to the customers.
For example, if you are planning a loyalty program for your retail outlet, you place posters or sign to trigger customers participation.
7. Tactics to encourage client loyalty
Once you have chosen an appropriate loyalty program, set tactics to measure the success of the program. Setting tactics to encourage client loyalty will help you maintain your brand values. The tactics are essential to trigger clients actions to make a purchase. For that, you set tactics such as premium services while the promotion is going on, annual event sponsorship, emergency contact, and secure website access, etc.
Choosing the right loyalty program is a painstaking task. You need to be extra careful while developing the program because the loyalty program can drive more sales, or it may be non-productive for your business.
Are you looking to build the right loyalty program for your business?
You have come to the right place. LoyaltyXpert is a distinguished loyalty program solution provider that offers excellent solutions combined with compelling retention approaches. We assure a perfect mix of functionality, affordability, and versatility to manage and operate your loyalty programs for your business. Contact us now and get awaited benefits of loyalty programs exclusively for your business.