Do you know, more than 50% of consumers are returning for repeat business after 3 purchases?
It means that if you have brand-loyal customers, you are likely to earn more profitability than your competitors. In fact, more and more companies are converging on acquiring more loyal customers to sustain their business growth. Go through this article to get more details on how you can empower a loyalty program for your business.
What is a loyalty program?
Loyalty program is a structural marketing effort to introduce a scheme to retain more existing customers. Companies verily launch this program to entice customers’ participation in repeat purchases to increase sales.
As the competition is high for every industry in the market, often businesses opt for giveaways to attract more loyal customers. For instance, companies provide additional benefits to their current customers through contests, coupons, goodies, vouchers, cashback, etc.
In fact, according to Bain & Company's study, a company can bring at least 25% of more profit by increasing customer retention by 5%. These statistics clearly suggest that customer acquisition is the key to increase profitability.
Why your business needs a loyalty program?
Do you know more than 70% of loyal customers bring in more customers with word of mouth?
It means that loyal consumers are vital to maintaining the steeply upward growth for your organization.
Customers who are loyal to your brand or product not only make a repeat purchase but also drive more customers. And, a loyalty program is a key to attract and retain more brand loyal customers. Have a look at the top essential benefits to create a loyalty program;
- Increase ROI by retaining more existing customers
- Sustain market competition
- Lower the customer acquisition expenditure
- Improve social participation
- Impact product selection
- Accumulate important consumer data
- Enhance brand value among the target audience
- Boost AOV - average order value, and many more.
Even though you are offering giveaways to your customers, loyalty programs help to recuse the discount you need to offer to increase sales. Successful creation of a loyalty program brings more advantages to your business that helps you maintain the stability of your business too.
Once you have built up a large base of loyal customers, your business will never be in crisis. Thus, Since the customer rewards program helps to safeguard the brand loyal consumers, frequent purchases will be increased more than ever before.
Want to scale up your loyalty program? Have a look at the below points:
1. Identify the rewards you want to offer
In general, successful loyalty programs are more focused on the single most effective action such as attracting more customers to make frequent purchases. So, in order to fulfill this requirement, you should identify the possible rewards that you could offer to customers. The most common rewards are coupons, free passes, rewards points, contents, sweepstakes, etc.
Depending on the types of your business and customers' preferences select the right rewards at the right time. In addition, keep in mind to offer a distinct value proposition with giveaways so that you can build up the emotional connection with your audience. This empathic relationship with your potential consumer accommodates you to retain more brand loyal customers.
Recommended: How To Increase Loyalty Using M-Commerce?
For instance, Amazon, the largest online retail store worldwide, offers a prime membership for a flat annual fee with the exclusive benefits of free shipping on more than 100 millions of merchandise.
Also, the giant retailer provides perks of free reading materials and video content. With these tactics, the company has attracted millions of members until now.
2. Reward your customer with their specific actions
After introducing a customer loyalty program, you need to decide which customer actions will be rewarded. Usually, the sole purpose of this type of programs to get more brand loyal customers, however, the ways to obtain this objective might be different.
For example, you can reward your customers' actions such as referral, survey completion, contest participation, registration, social shares, and many more.
Hence, perform enough research work and recognize the pinpoints that will help to get maximum customers’ active participation. If you understand what your audience wants, it will be easier for you to offer the right rewards for the right customers.
And, once you opt for the appropriate actions to reward your customers, you will bring in more sales. Sometimes, this action triggers word of mouth publicity that aids in getting more new customers too.
Sometimes, loyalty programs fail because of not rewarding the right action, so be careful while opting for the most suitable actions to recompense your target audience.
3. Decide on the marketing channels to publicize a rewards program
It is crucial to identify the marketing channels, while you want to create a successful loyalty program. The channels will allow you to communicate with the audience about the program you are establishing for them.
Based on your business requirements, you may select email marketing, social media promotion, direct mail, or direct information to the consumer on the counter. Whichever way is convenient for you, specify the ways you are going to use the forces to publicize the rewards program.
Specifically, a newsletter is one of the best ways to keep your consumers informed about any important updates. You can run a curiosity campaign even before implementing the rewards program.
Further, your potential customers should know about the benefits your offering via a loyalty program. Once they get to know about it, they will come to you. Thus, you can fulfill the goals of getting in more loyal customers for your business.
4. Set agendas for customers to redeem the rewards
When you have executed a loyalty program for your consumers, it is indispensable to set a specific plan for the redemption process. Answer the questions below and you will be close to setting up the right tactics to redeem the rewards;
- Have you decided how your customers will obtain the rewards?
- Are you providing an online facility to redeem the points?
- Is your program locally accessible to get rewards?
- Is the redeem procedure intuitive?
- Does the redemption policies align with your business goals?
It is crucial to decide the agendas for the accessibility of the rewards program. Once the customers have earned the rewards, there should be simple and clear cut directions for them to redeem the rewards. The predefined agendas to redeem the rewards will help you stay organized during the loyalty program. It will also help to gain insightful statistics to generate reports.
5. Do not forget to implement the rules and regulation
The rules and regulations of your loyalty program enable you to protect yourself from legal complications. As a rule of thumb, apply sensible and straightforward rules to be on the safe side.
- Have a look at the simple rules, to begin with;
- Only registered customers will get benefits of rewards.
- The rewards points are not transferable.
- Tax and shipping charges are excluded on the points earned or redeemed.
- The rewards are collected by current purchases only.
- Points may only be reclaimed for purchases, not for cash value.
- We hold the right to terminate any account at any time.
These rules will help you stay organized while running a loyalty program, Also, it will be easier for your target audience to understand the terms and conditions to earn the rewards. This practice will not only lead you towards the success of your program but also impact your consumers too.
Tips to create a successful loyalty program
Creating a loyalty program that brings desirable results is imperative because you are investing in statutory resources, finance, and time. If you have established the above-mentioned strategies to scale up the program, you will achieve the goal effectively. However, glance through the tip that will help you to design a successful rewards system;
- Listen to your customers before implementing a loyalty program
- Identify the objectives you want to achieve
- Set realistic expectations
- Propose for unique rewards rather than an ordinary gift
- Offer rewards with inherent values
- Do not forget to socialize your loyalty program
- Lastly, always publicize your loyalty program so that you can attract as many customers as possible.
So, create a loyalty program that best matches your business offerings and the preferences of your target audience. Set your objectives beforehand while you launch a rewards program. And, do not forget to keep the core aim in mind to retain the existing customers.
As mentioned earlier, loyalty programs are the key to sustain market competition and increase sales via frequent purchases from loyal customers. Determining the marketing channels to implementing the rules & regulations align all your strategies for the customer loyalty program to avoid any complexities.
However, it is advisable to connect with the loyalty expert consultants to select the right program for your business. Their professional experience will help you to create a loyalty program that drives more revenue for your business. With expert support, you reduce the risk of program failure respectively.
I am Neha Sehgal. A Professional Content Writer from “LoyaltyXpert”. LoyaltyXpert is a one-stop solution for a loyalty program that offers commendable solutions integrated with powerful retention strategies. I hold spectacular skills in the field and has been diving into the field for 4 years. I am also curious about Marketing strategies and Business solutions updates.