Acquiring customers is easy, but retaining them is hard. That’s why companies use loyalty programs to retain customers and incentivize them to enforce loyalty. A loyalty program, in its simplest form, is a marketing strategy that puts customers’ preferences at the center of attention. The strategy focuses on rewarding customers as the more you reward them, the more they become loyal to you. By doing so, you also build a long-lasting relationship with your customers. This is a long-term investment that – I believe – is very important to most businesses nowadays.
Why does your business need a loyalty program?
Around 83% of customers say that a loyalty program is one of the reasons they’re more likely to continue purchasing from a certain business. This is why brands, big and small are still investing in loyalty programs. According to Accenture, 90% of the companies in the US currently have some sort of loyalty program. One of the reasons customers love loyalty programs is because it makes them feel they belong to a community. According to a report, 50% of customers say they would change their behavior to attain a higher tier of the customer loyalty program. Rewards and incentives are a big player in customer behavior as 57% of customers join loyalty programs because they want to get free items or receive rewards.
- Retain existing customers
In a report done by Harvard Business Review, they found that existing customers spend 5 – 20% more than new ones. If you’re lucky enough to have a good base of customers, you can easily incentivize them to buy more from you. Acquiring new customers often costs five times higher than retaining existing ones. To beat your competitors and increase sales, offer your current customers incentives and discounts they can’t ignore. Apply this strategy and you will be surprised at how much your profit will increase.
- Gain better insights about your customers
Loyalty programs have a direct impact on gaining better customer insights and data. With loyalty programs, you get to understand your customers’ preferences and buying habits which can help you tailor your offerings to create effective promotions that suit your customers’ needs.
- Create strong bonds with customers
As important as data is, building an emotional relationship with your customers should also be an integral part of your marketing strategy. To create this relationship, you need to show customers how much you value them. Customers love it when their favorite brand rewards them with a special discount or a limited-time offer on their most loved products.
Best strategies for an effective loyalty program
- Gamification
One of the best ways to engage with customers is through a gamified loyalty program. You can create challenges or quizzes that highlight your brand’s values or encourage customers to take the desired action. Engaging in interactive gamification with customers is a great way to earn their loyalty.
- Build a community
The main purpose of introducing a loyalty program to your marketing strategy is to build a community around your brand. You can build small loyalty communities based on their behavior, values, or preferences and offer them personalized incentives. This helps you strengthen the bond with your customers and group them into like-minded communities.
- A spend-based program
This is the most basic type of loyalty program as you reward customers according to the amount they spend at your store. It’s an effective way for businesses that sell commodities to keep an ongoing profit income but you will need to combine it with other types of programs to ensure maximum benefit.
- Tiered loyalty programs
With tiered programs, businesses create different sets of rewards and benefits for customers. Top or high-value tiers are often reserved for the top-spending customers. This works best if you want your customers to mix and match between the perks and at the same time, it helps you segment customers based on their preferences.
- Referral program
This type is self-explanatory as you reward customers when they refer your brand to their friends. It’s a win-win solution as you acquire a new customer at the same time and retain your current ones by offering them incentives. This is suitable for many types of businesses: eCommerce, restaurants, and even tech companies
How to use Mobilzer’s loyalty program feature?
With our loyalty program feature, you can reward your customers with points when they buy from your shop. Then, they can redeem it later as discounts on selected items.
From the left-side menu, you can choose “Discounts and Loyalty” and then choose “Loyalty” from the drop-down menu. Enabling the loyalty program feature is optional and it costs you only $9.99 to activate it. After completing the payment you can customize your loyalty program as follows:
- Allow single-time or multi usage
- Offer rewards after a specific time of purchases
- Set validity period
Wrapping up
Before you offer a loyalty program, be thoughtful about the approach by providing appropriate incentives to your customers. If your customers love free stuff, then show them what they like. Likewise, think of an approach that will give you a distinct advantage over your competitors.