Find out the Importance of Customer Loyalty ProgramsFebruary 3, 2022
Why is customer loyalty so crucial in a business? Why does it matter? Because loyal customers stick through both good and bad times. And to grow a business, your customer base counts as an essential factor. The customer base helps retain current clientele and increase revenue. So, how do you get a customer to be loyal to you or your brands, products and service? How?
Did you know about the loyalty program for customers? Loyalty programs are valuable 75% of US companies have been able to generate a return on their investment because of their customer loyalty program.
Here are a few reasons why customer loyalty programs are essential:
Loyalty programs can build an emotional connection
A loyalty program helps build an emotional relationship between the company and their customer. And if done with a creative approach, it can do much more. For example, curate a third party promotion. Like a restaurant, retailer or even a spa. Creating a lifestyle and community like perception can help build the emotional connection for the customers towards the company. The impact of such a loyalty program is even bigger. Loyalty programs help drive sales and increase the customer lifetime value.
Loyalty programs can help reach new customers
As mentioned above, a loyal customer base is one of the best marketing tools. If we notice in today’s review websites, a positive review matters a lot. As per the study, 83% of consumers trust word of mouth more than any other marketing medium. And these word of mouth references come from a well-planned customer loyalty program. A loyal and satisfied customer has the power to bring in more customers through word-of-mouth, who in turn can become another loyal customer.
Smart loyalty programs can help achieve customer insight
A creative approach to loyalty programs can give another level of benefits, like hosting a digitized loyalty program where real-time data of customers engagement. Their engagement with the program and the company as a whole can be displayed with a creative edge to it. This data will also help you develop new strategies and innovations for better loyalty programs.
Consistent customers have a higher ROI
New customers are usually willing to spend a lot of time on a brand they are not familiar with. An existing customer is more likely to try and spend their money on the brand than the new customers. It is important to look for new customers to reach potential customers for growth. But retaining customers for a long time is more critical. Therefore, loyalty programs are hosted in the first place. The emotional connections, insights and understanding if your customers are satisfied are what loyalty programs aim for. And the rest of the loyal customers follow.
For instance, apps like Fave India builds customer loyalty by rewarding their customers for shopping smartly. It’s like a win-win situation. This is how it works – if we make a purchase with the Fave India payment app, we can avail some great cashback benefits from it! So, for every purchase we make, we get rewarded for choosing Fave India as our payment app.
A good loyalty program can create a solid foundation for a customer engagement strategy. Higher the customer loyalty, higher the profits and growth. Unfocused loyalty programs can cost you money and also get you no customer loyalty. A relevant customer program can very well help the brand create a strong and successful customer engagement strategy.
Add some exciting elements to your loyalty program, such as:
- Rewards- points rewards for the participating customers in the program. These points can be discounts, free items or access to exclusive products, like the memberships in H&M.
- Refer a friend code- the more new customers get involved, the better.
Customers love discounts and offers. Therefore, it is great to introduce new and different benefits now and then. These benefits excite the customers and keep them engaged in your market as well. But also make sure to keep track of the data and analyze the effectiveness your offers have made on your customers.
A loyalty program helps figure out if a customer is bringing in the revenue needed. So when hosting a loyalty program, keep the points mentioned above in mind.