Loyalty programs are an invaluable and highly effective way to reward and incentivise your employees, resellers and consumers. There are many added benefits to running a loyalty program, all of which can help expand your company and increase profits. Below we list the top 6 advantages associated with running a loyalty program.
Retain your Existing Customers
Naturally, your current customers will spend more than new customers, however, it costs a lot more to retain customers than it does to acquire new ones. A loyalty program is an excellent way to keep your customers as you are showing your appreciation by rewarding them. Customer retention via loyalty incentives is one of the most cost effective ways of increasing your profit margin.
Customers find it easier to justify continually purchasing from a brand or a range when there is an added incentive of gaining rewards or points. By redeeming rewards and collecting ‘points’ a customer’s enthusiasm rises, encouraging them to remain customers.
Gather Valuable Market Data
Loyalty rewards programs are, in essence, a form of market research. You are gathering vital information about your customers and their buying habits. By monitoring the uptake and feedback of the loyalty program, you can fine tune the specifics so that future loyalty programs meet customer demands more accurately. Using the valuable customer data gathered, you can target your existing and potential customers both more efficiently and cost-effectively.
Acquire New Customers
Acquiring new customers is fundamental to business success. However, finding new customers isn’t as easy as it may seem. Keeping an existing customer is 7 times less expensive than acquiring a new one, therefore, loyalty programs should be about rewarding and incentivising future purchases.
In theory, a loyalty program should gain the attention of new customers to your business. How effective it is really depends on the reward structure of the program; are the rewards really valued by the end users? If so, gaining new customers should be made easier.
Loyalty programs can be a daunting thought for business owners who may fear that the hard work invested won’t be justified by the output received. The expenses incurred from initial set up should be outweighed by the generation of new customers.
Although hard work is required during the initial planning and set-up stage, once done correctly, your loyalty program becomes a self-sustaining platform due to the simple cycles involved. As the customer purchases more products, they receive more rewards, therefore encouraging repeat purchases.
After set up, the main focus should be on maintaining the loyalty program. This usually involves keeping the customers engaged by updating the rewards. The potential output from a loyalty program is far greater than the effort input when it is set up and monitored correctly.
Create Brand Advocates
Providing rewards for your most loyal customers puts your business above non-participating businesses. By running a loyalty program you are advertising to your customers, both current and potential, that you want to build a relationship with your customer base that is mutually beneficial.
Often businesses are under the impression that the only customers of value are the ones spending money, however, this isn’t true. An often overlooked crucial element to any successful business is that customers that aren’t ‘spending’ money but ‘generating’ it. These types of customers are known as ‘brand advocates’ as they tend to spread your business message by word-of-mouth to their friends, family and even through social media. A personal recommendation from someone you trust is usually more convincing than promotional material. These ‘brand advocates’ cannot be overlooked.
One way to gain loyalty from your customers is to build relationships. Loyalty leads to repeat purchases and therefore increased profits. A loyalty program is a great start to building a relationship with your customers. It will show your customers that you truly value them. You need to be ready to adapt to your customers and evolve with them as this will produce a unique level of service that makes your customers feel noticed.
At Sales-Promotions, we believe innovation is the key to successful incentive schemes. Our unique software will enable you to create a bespoke platform which will allow you to manage, communicate and deliver rewards to your customers and resellers.
Our dedicated software is user-friendly, versatile and can be completely tailored to fit with your organisation’s requirements. For more information on Loyalty Programs and how we can help your business, contact our team today by calling +353 (0)1 887 1949 or emailing us at email@example.com.