All-In-One Guide to Customer Loyalty Programs
Integrating the right sort of Loyalty Program isn’t a cakewalk, it requires a smart approach, support, and the right business sense to take it forward. It’s important to have a custom loyalty program to not just retain customers but have the power to acquire new ones too!
According to Deloitte’s retail survey, “Businesses with loyalty programs are 88% more profitable on an average as compared to their competitors who do not”. Let’s understand and decode each aspect of having a customer loyalty program.
Understanding Customer Loyalty Programs
Let’s begin with the basics, customer loyalty is an ongoing positive relationship between a customer and a brand. A customer loyalty program is considered for driving repeat purchases and letting them choose your brand over the rest. In simple words, customers are associated with a brand because they have a positive experience with it, including good customer service, feeling connected with the brand values, or having high product quality.
Loyalty happens as a result of multiple or constant positive interactions with a brand, building trust amongst the customers over time. Customer Loyalty is an imperative aspect in the world where experiences matter. A study by Qualtrics XM Scientist, says- “People who had a bad experience with a brand, but the brand fixed it, are more loyal than customers who never had a problem in the first place.”
This is because the brand has built trust amongst the customers and that has a greater value than anything else.
Why’s Customer Loyalty an Imperative Aspect?
Customer loyalty is an important aspect for a lot of many reasons. While they not just include the effort in keeping the existing customers but the strategy involved in acquiring the new ones at the same time. According to Paul Farris, author of Marketing Metrics says that a repeat customer has a 60% to 70% chance of converting. Additionally, the new customers have better chances to convince us they have lesser knowledge about your business and that’s when you can grab customers attention.
Customer loyalty has evolved years over years, making the process advanced and better each year. The benefits of the customer loyalty program are as follows-
Better Customer Retention
Customer loyalty programs help in attracting a better customer base through keeping them engaged with your business, knowing how likely they will be sticking around and what could be their possible spending. Today, customers are not just making purchases based on the price or someone who is choosing the lower price, it’s more about engagement, values and most importantly the emotional connection with a brand.
It is a great way to engage customers beyond just based on pricing, digital loyalty programs focus on keeping them happier and feel valued so that you have a better probability to increase customer base.
Increased Customer Referrals
If your existing customers are enjoying the benefits of the offered loyalty program then there’s a higher probability that they will be referring the same to more people in their contacts. Referrals are the most trusted form of advertisement as its word of mouth marketing which results in the addition of new customers liable to generate even more revenue for your business. According to stat customers referred by loyalty, members have a 26% higher retention rate.
Worth the Cost
A fact says that it is more cost-effective for your business to retain happy customers than to consistently churn and acquire new ones. Loyalty programs are undoubtedly highly cost-effective as it retains more customers which generate profit in long term.
Today, people actually value reviews and suggestions shared by other customers. They are quite a trustworthy aspect, customer loyalty programs that incentivize reviews and brand ratings on either websites/apps or social media will prove as authentic user-generated content in the long run. Tons of people relying on your brand will create a great impact in acquiring new customers.
Types of Customer Loyalty Programs
There can be many kinds of customer loyalty programs, here are the four major ones-
Entice your customers with planned rewards on their purchases through a single brand. By enabling loyalty points integration, customers can redeem the points after shopping to a capped amount.
Wallets & Gifts
Get your brand a personalized wallet integrated, providing the customers the delight of paying through a secured payment network. A brand can also gift customers some goodies on every milestone they complete with the brand.
Extend your customer base through an attractive referral program for existing customers. It gives more chances to get new customers onboarded through word of mouth.
Buy One Get One
It’s quite an interesting kind of loyalty program offering customers free products on purchasing one product. This can be limited to a few services or products.
Building Customer Loyalty Programs
Customer loyalty is not earned so easily, in fact, customers are driven by their goals and they will be loyal to a brand that can help them in fulfilling the preset goals. No matter if they have a positive history with the brand, if a competitor offers better then the customer would surely run away. What can keep them grabbed by your brand? Check out a few points-
Choose a multi-channel customer service system
Willing to build customer loyalty? It’s imperative to cater to customer requirements, know what they want and provide solutions accordingly. Integrating a multi-channel service system is one of the leading ways for connecting customers, especially when they require help. In this way, customers will have much better access to the service team, creating lasting customer interactions.
The more a brand can interact with their customers, the better are the chances one have to influence their experience. Making use of multiple channels for customer service provides an opportunity for an omnichannel experience.
Focusing on improving customer service
Providing exceptional customer services does not mean giving away huge discounts or free giveaways, instead, the approach is altogether different. Customers today, need the right solutions for their problems and not free samples.
Giveaways are good for a start but aren’t an economical option for the brand neither a guarantee to let more users glued to a brand. Think about valuing your customers, listening to their queries, and improving your experience thereafter. Keeping a customer happy is always the key.
Think about customers, not the competition
Checking out the competitor’s activity is important but thinking to copy-paste the strategy isn’t. not every strategy works for every brand. To stay an edge above, it is good to know what’s going around and plan something more personalized and unique for the customers.
As a matter of fact, customers rely on the brands who provide personalized experiences and give them exactly what they require to have. So, next time when you see that the grass is greener on the other side, then consider the basics rather than taking up other strategies to include in yours.
Rewards are everyone’s favorite and loyalty starts with rewarding the right people at the right time. Customers who are loyal to a brand are a valuable asset and what makes up the loyalty quotient is an emotional connection bridging the gap between the brands and the customers.
According to research, 68% of loyal customers will join a loyalty program if one is offered to them. Reward your customers and have a better probability to reach a larger customer base as well.
Integrate Technology Advancements
Technology is taking every industry to an all-new level, the loyalty industry needs to have all the required technology advancements to stay above the rest and most importantly understand their customer well.
Leading technologies like Artificial Intelligence and Machine Learning have the potential to revolutionize the retail loyalty industry. AI helps in understanding and predicting human behavior and purchasing patterns.
Through using predictive analytics one can instantly segment customers and get facilitated in case it’s a tiered loyalty program. Technology can further help against fraud, provide intelligent interfaces, and a lot more.
Leading Loyalty Programs in Today’s Era
While some a just thinking to launch online loyalty programs, some brands are running high in the race with a success rate to set an example! Here are a few successful loyalty programs one must stay inspired with-
Sephora Beauty Insider
Being the major beauty retailer in the US, Sephora accounts for 22.7% of the total US beauty specialist retail sales. They have launched a loyalty program- Beauty Insider, rewarding their customers on every purchase and leading the beauty market as well.
Starbucks is a premium American coffee retailer present in 218 locations worldwide. The brand introduced Starbucks Rewards, a free, 3-tiered program with a simple earn and burn criteria. It is quite a successful program as of now and running successfully around the globe.
Amazon Prime was launched in 2004 and as of now, it takes around a whopping 80 million members onboarded. It’s a unique membership program for Amazon members and leading in the space as well.
With numerous benefits awaiting for your brand, a loyalty program is a must to boost sales, increase customer base and elevate profits in the longer run. Get started with building the right customer loyalty program software for your customers with the accurate strategy to implement and carry along. Find the best-suited company that can help you in building a smart loyalty program for your business.