To create a loyal customer, loyalty programs are implemented. As they say, “A loyal customer is one of the most important assets for any organisation.” These programs and benefits are used to ensure that frequent customers always stay connected to the brand. Thus, in exchange for their loyalty and contribution, companies put such programs in place to provide those customers with extra benefits. Consider these loyalty programs as the free sprinkles and cherries on top of the ice cream you buy.
Loyalty programs target the retention of existing customers by understanding and fulfilling the needs and desires of the customers. In this process, they see a significant rise in sales which drives the profits and margins and encourages cross-product purchasing by the current customers. Apart from the current customer base retention, loyalty programs also help in attracting new customers. A lot of companies have observed that their loyalty members spend more in comparison to the customers who aren’t members.
Modern day loyalty programs:
Modern-day loyalty programs are quite diverse-ranging from the credit card benefits the bank provides to its loyal customers to local businesses giving discounts on bulk orders. It’s not just the big brands. Smaller businesses have taken to the loyalty programs bandwagon too. Cafes providing free coffees, big brands giving VIP benefits, and discounts to their regular clients are some examples of these rewards and loyalty programs.
To maximize the output of these programs, there are a couple of things businesses should take care of. Loyalty programs help brands foster an emotional connection with their customers. Involving benefits like spa or theatre discounts imbibe the “lifestyle” angle which gets brownie points from the customers. A creative approach along with personalization can go a long way when it comes to appreciating the existing customers while luring in the new ones.
Identifying loyal customers:
Identifying your loyal customers is very crucial. Keeping an eye on the consumer’s behavior and engagement using market research and other sophisticated tools and techniques will help you in recognizing the customers who have been associated with your brand for a long time. Moving forward, you can introduce new benefits and memberships to them to appreciate their contribution to the growth of your brand while making sure that they do think about you when they are out there shopping.
The reward/loyalty programs need to be structured in a way that tempts the customer to come back again and again for more. Never quench their thirst. This might require an understanding of what the consumer wants along with the current trends and personalization accordingly. This will help in increasing the number of returning customers, thus increasing your sales and your audience. Frequent customers have a huge ROI-Return of Investment and this will help you in making cost-effective strategies for marketing.
Structuring loyalty programs:
Loyalty programs need to be budget-friendly. Ensuring that you have figured out all the hidden and visible costs that will go into funding your program will help your brand in analyzing the projected profits versus the current investment required. Apart from the money which goes in, it’s quite essential to analyze the investment of the time and effort and if it can be better utilized for other marketing goals that are to be achieved.
These digital reward programs give the companies real-time insight into how the customers engage with their brands and the improvements they can make to increase that engagement. The data can further aid them in market research along with giving the brands a chance to experiment with various benefits and offers and study the consumer response towards the same. The information also helps them in developing a detailed description of their customers and identifying prospective customers who portray similar behavior as the existing ones.
All in all, the more lucrative and attractive your loyalty programs are, the more customers will get associated with you which will accelerate your brand’s growth. To quote Dr. Chip Bell, “Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you”.
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