Increasing the company’s user database with new customers is the goal of every business, whereas retaining your old customers is equally important. Companies offer them incentives, discounts, and offers so that they keep on buying the company’s products and generating profit for the company. Offering loyalty programs is a great way to attract the attention of customers. Today, we’ll discuss customer loyalty programs and their benefits.
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What are Customer Loyalty Programs?
Customer loyalty programs are when companies offer incentives in order to make customers visit their website, store, or shop repetitively. They offer rewards and incentives to the existing customers, instead of focusing on attracting new ones. However, when the new customers get to know about your loyal programs, then they would check out your brand.
It doesn’t matter whatever role you’re performing like business development, marketing professional, or salesperson. If implementing loyalty programs would help your company to establish a stronger database, then you should.
Different companies use different types of loyalty programs, and they all work differently. For instance, some companies reward customers based on how much money they spend on shopping, and others follow the point systems where customers earn points on every shopping. Other forms of programs are special offers for loyal customers and mailing them and special promotional deals for members, and they’re there to attract customers and make them shopping.
Customer Loyalty Programs Statistics
According to an estimate by Accenture, roundabout 3.3 billion loyalty membership plans are
there in the US. 90% of the companies offer some sort of loyalty programs with slight differences. However, offering customer loyalty programs is a decade-old strategy, but it’s still evolving and attracting the attention of customers, and it’s a good way to stand out in the competition.
- 76% of the consumers think that loyalty programs make them develop a better relationship with the brand
- 50% of the consumers say that they would change their attitude in terms of achieving the better customer loyalty program
- The reason customers join the loyalty program, 57% of them want to save money, and 37.5% of them want incentives and rewards.
- 69% of the consumers claim that they make choices based on the consumer loyalty programs
Major Benefits of Customer Loyalty Programs
Some of the main benefits of customer loyalty programs are as follows;
Reward Your Existing Customers
A loyalty program could be very helpful and it would make the existing customers feel good for supporting your brand. When you offer incentives to the customers for shopping for your product, it means you value them for their choice of your business. However, when you offer them rewards and incentives, it makes them feel like you’re saving their money, and it would encourage them to keep on shopping and supporting your brand.
Increase Your Sales and Profits
The reason companies launch loyalty and reward programs is to generate a steady flow of income and profitability to the company. When you offer them rewards consistently like special deals, coupons, and cash incentives, then they would do shopping at your store. The discounts would allow them to save money, and they would buy more things than they have to. More visitors and traffic to your store would increase the sale and profitability.
Increase in Word-of-Mouth Advertising
One of the most cost-effective forms of advertising is word-of-mouth marketing. When satisfied customers would receive the benefits and rewards from the loyalty program, then they would share their experience with their friends and family members. According to an estimate, 73% of people recommend a company that offers a good loyalty program.
Increase Customer Engagement
When customers sign up for the loyalty program, then it presents a great opportunity for the company to connect with them. For instance, if a customer buys a debit or credit card that offers a lot of additional benefits. It could be life-earning points on every transaction, and you’ll receive a grand reward when you hit a certain limit. They would like to know the other special offers that your company is offering. 79% of the people say that they keep on doing business with a particular company based on its reward programs.
Reduce Costs on Seasons
Businesses have got various sales seasons, and it’s different in different types of industries. A customer loyalty program in the form of incentives and low prices could amplify the sale of your business during the off-season. It would customers a reason to do shopping. Businesses and companies launch limited-time offers and rewards during the off-season to increase the customers’ activity.
Competitive Edger Over Competitors
Various companies are offering similar types of products/services in the same industry. A loyalty program is a single element that would help a company to differentiate itself from its competitors. For instance, a retail store has launched a reward card to persuade customers to shop with care in their every visit. If your loyalty program is better than competitors in terms of saving money, then customers would always choose you.
Acquiring New Customers
Although the customer loyalty and reward programs are for the existing customers, they would attract the attention of new customers, and they would like to be part of such a program that allows them to save money. Some companies follow the recommendation and referral programs, where the existing customers would get more benefits if they tag along with their friends and family members. They can better offer and deals if they make a successful referral in their social circle.
Build Brand Reputation
If your business has launched such a loyalty program that is offering rewards and incentives, then it would increase the brand reputation. You can specifically target those customers that want to save money and support your effort of the loyalty program. The attitude of the customers would be more favorable to your brand when they feel like they’re getting value from your brand. You can influence the minds of people positively when customers feel good while shopping.
Access to First-party Data
The most important commodity in the world of technology is user data, and customer loyalty programs allow you to access the user data whatever you require. When you have the access to the first-party data, then you can improve your company’s market position and offers based on your better understanding. If you offer them rewards and incentives, then customers would be willing to sign up for such programs, and you can easily extract the relevant data.
Creating Mailing List
Companies gather the relevant contact information from the customers when they join the loyalty membership plan. It becomes easier for them to contact the customers via email and inform them about the latest sales promotional offers, and convince them to buy products from you. The mailing list would also help you to develop a relationship with your clients.
Increase Brand Relevance
A plethora of marketing budgets could help you to stay in the market and keep your brand relevant, or you can do so with loyalty programs. When you inform current customers about their current reward status, then you convince them to do shopping. However, when new customers ask you about the reward program, then they become potential candidates in the sale funnel.