This article will discuss why creating a loyalty program is important for customer loyalty and retention. Loyalty programs are a permission-based relationship with your customers, and creates loyalty to your brand. A rewards program adds value and encourages consumers to become repeat buyers.
Developing a loyalty program today is almost a must-do. Loyalty programs are a way to develop permission-based relationship with your regular customers, and is very much about creating loyalty to your brand.
A study done for the 2019 Loyalty Report developed by Bond Brand Loyalty found that 79% of respondents who participated in a loyalty program said they would be more likely to continue doing business with a brand if they had a loyalty rewards program. And 73% of respondents said they would be more likely to recommend brands that have a good rewards program. Wondering when to start such a program? The answer is quite obviously as soon as possible.
When you should consider developing a rewards program
- When you want your customers to talk about your brand and products organically, and in a positive way. This is the kind of free marketing businesses hope for, and viral marketing of this nature is worth its weight in gold.
- When your business relies on repeat customers. Eighty percent of your business will come from 20% of your customers, so repeat business is essential to increased revenues. Targeting these customers is important.
- When you want to connect deeply with customers. In today’s consumer-oriented market, connecting in a real way with your customers is not only necessary, it’s vital. A study done by Loyalty One shows that 76% of customers felt that receiving a personalized discount based on their purchase history was important.
- When you want to acquire new customers, win back lost customers, and retain the ones you currently have. New customers have the potential to become repeat customers (see point #2) so the engagement cycle needs to consider both new, lost, and repeat customers. All three segments of customers enjoy a rewards program and will join for different reasons. A loyalty program is a good incentive to motivate these three groups of customers.
- When you want to identify your best customers and reward them for their continued support of your brand and business. Research shows that most customers feel rewards programs don’t single them out as being loyal above others, but would like that recognition in the form of different rewards from what every other member gets. What this is exactly will depend on your product and the regular rewards you currently give.
- When you want to save money. A business typically incurs fewer costs retaining a current client with a loyalty program than they do on marketing initiatives trying to attract new clients. POINTS TO CART can help in an easy, efficient way, and offers numerous highly visual options to promote your loyalty program in order to attract participants.
- When you want to set your brand/business apart from the competition. There are many options for consumers today, so being able to set yourself apart, in a positive way, from the pack offers valuable leverage in your favor.
A customer-centric approach should drive your decision
Loyalty programs are a soft-sell marketing approach that adds value to the customer in their experience with your company. The marketing industry has come around to realizing that a customer-centric approach is key to increasing profits and revenue.
As to the actual timing of when to launch a program, any time is good as long as your company is prepared for it. The last thing you need is to have a failed launch that disappoints customers and they abandon your brand. So execution needs to be flawless. Look at your customer data and determine your peak financial quarter. Perhaps it’s around the holidays or the beginning of summer.
Whenever you do decide to embark on this kind of initiative, you need to have marketing support and continued execution to make it a big deal and get customers so excited they won’t want to miss out on being part of your group and benefitting from the value-added rewards your program will surely offer them.