Rewards and loyalty programs happen everywhere you go say – at a clothing store, a restaurant, a supermarket, and an eCommerce store. Loyalty programs increase overall revenue by 5-10% – Consider the commercial impact of loyalty programs.
People love loyalty programs and as a marketer, I’m wondering how many loyalty and rewards programs you personally have joined over the years.
A Well planned loyalty program benefits not only customers but also businesses, they help with customer retention and bring more loyal customers. Today’s most common loyalty programs are:
- Cashback rewards
- Points that can be redeemed on products and services, and
- Tiered benefits at different levels of the program.
So, keeping this in mind, let’s talk about loyalty programs. It’s important to examine the pros and cons of loyalty Programs and choose what’s right for your company and audience.
Here’s what you need to know.
Pros of a Loyalty Program:
Let’s start by talking about the benefits you’ll reap if you start a loyalty program that appeals to your customers. There are several that make loyalty programs a must for marketers and business owners.
- According to the advisory firm, Bain & Co. study found that Loyalty programs increase customer retention by just 5% boosts and profits by 25 to 95%.
- 61 percent of loyal customers buy more frequently than other customers.
- Do you know that it costs 5x times more to acquire a new customer than to keep an existing one? The cost of a loyalty program is less expensive when compared to the cost to attract new customers.
- Customers who feel high levels of trust and valued tell their family and friends about positive experiences. Word-of-mouth marketing is more effective at driving new customers. As per the 2018 retail, CX trends study shows that 75 percent of loyal customers will recommend a brand to friends and family.
- Research shows that loyalty programs increase sales. According to one study, members of loyalty programs generated between 12% and 18% more revenue for businesses than non-members.
- As loyalty program data gives the businesses a complete picture of customer behavior, buying habits, and preferences which can be used in Segmenting best customers profiles to tailor them with the latest and best offerings.
Loyalty programs offer a direct line Communication between you as a business owner and Customers. IT offers loyal customers a good reason to return to your business, where it increases purchasing, and recommend your business to their friends and social media followers.
What effective features should your loyalty program have?
There’s no right answer, but there are common things that most successful loyalty programs offer. They are:
- Properly structure the Incentive plan to get more spend and purchases.
- Early access to special offers and products to make your loyalty program members feel valued and special.
- Ease of use and join in your loyalty program.
- Personalization. Offer loyalty program members more personalized offers on products & services.
- Freebies! A reward program will offer your customers extra benefits.
- Brand relevance. Finally, Choosing the Right Type of Loyalty Program that matches your brand and deliver what your customers want.
Amazon Loyalty Program – Prime Members
Airtel Loyalty Program – Wynk Free Music
“The key here is to think about your business, brand values, and customers and create a loyalty program that delivers on your customers’ expectations while helping your bottom line.”
Make sure that your business, brand values a key part of your loyalty program strategy that builds good relationships with customers.
Suggestions for Loyalty Programs
Here are some suggestions for how to structure your loyalty program in a way that makes customers want to participate.
- Use a simple point-based system
- Charge-free for VIP benefits.
- Structure programs around your customers’ values.
- Make a game out of your loyalty program.
- Create a tiered system to encourage more purchases.
Once you initiate your loyalty program, track and measure the results of your success. Increase Your customer’s happiness and it will let you know if something’s working – and your bottom line will reflect their increased loyalty.