Developing a customer loyalty program can provide a range of benefits, both financial and non-financial. There’s a reason so many businesses have their own loyalty program: research shows that customers who sign up to the program, especially millennials, are over 66% more likely to buy from you again.
Building a loyal customer base is key to a business’ survival, and a good loyalty program can make a big difference in how successful your brand is.
The most immediate benefit of a customer loyalty program is that it can be an essential way of retaining customers. While attracting new customers is obviously the goal for many businesses, keeping your existing customers can have a massive impact on your profitability- research shows that loyal customers spend on average 67% more than new ones. A robust customer loyalty program will give customers more reason to keep shopping with you, rather than a rival. Rewarding a customer every time they shop with you will make them feel good about shopping with you and encourage them to come back more often.
Loyal Customers Can Act as Brand Advocates
Your most loyal customers are more likely to recommend your brand to friends or family. People are more likely to trust word of mouth recommendations from someone close to them over advertising, so having a base of loyal customers can be a great way to spread the word about your business. To make the most of this, your loyalty program could include additional rewards whenever a customer refers a friend or family member to you.
An Effective and Ethical Way of Collecting Data
Customer data is an important commodity for a business. With it, you can learn more about your customer’s wants and needs and easily keep in touch with them. Customers can often be reluctant to share their data with businesses, but a good loyalty program provides an ethical way of gathering customer data. If a customer provides an email address when signing up for the program, you can generate a mailing list that will allow you to easily contact them with special offers and rewards.
Reduces Price Competition
A good loyalty program can give you the edge over your competitors. Without one, you may try other methods of attracting customers, including lowering your prices. But you can only lower prices by so much before you start to lose money. By introducing a loyalty program, you can offer people other incentives without risking your profits.
Build Relationships with Customers
Enticing a customer with lower prices can get them through the door, but consistently giving them a great experience when they shop with you will convince them to stay. Using a loyalty program is a great way of building a healthy relationship with customers. Customers who feel that a brand gives them more than just what they purchase will be more invested in the brand, increasing their emotional loyalty.
Overall, a good loyalty program that rewards your customers is a sure-fire way to build your base. A loyal customer base is key for improving the image and profitability of your brand.