If you’re searching for strategies to build client loyalty in a challenging market situation, you’re undoubtedly wondering, “Do loyalty programs work?”. Fortunately, the answer is yes! Studies show that customers are more willing to stick with a brand that offers loyalty programs. In addition, customer rewards programs are among the most effective strategies for boosting revenue and encouraging customer loyalty.
This article will learn how customer loyalty programs work and why every business should have a loyalty program in order.
What is a Customer Loyalty Program?
Customer loyalty programs are not a new concept but still can be very effective in attracting new customers and retaining existing ones. A loyalty program is nothing but a reward program consisting of rewards, discounts, or unique offers that merchants sponsor.
As a merchant, one must keep in mind that their clients get consistent value from their interactions with the business. For instance, a prime example of a loyalty program is the business model of Fave India. So, whenever a customer pays using their app, they are rewarded with great cashback offers – this keeps them coming back.
Now, the question that may come to your mind is “How to do that?”. Well, that is relatively simple. One can offer them personalised and relevant rewards, and you have to ensure that users get more rewards as they spend more time.
Now, what can a loyalty program reasonably do? Usually, a loyalty program can be a powerful marketing toolkit that produces a variety of benefits for your business.
Let’s explore some upsides of the customer loyalty program:
Encourages Customers to Repeat Business
Customers become loyal to a brand because of a reason. This is usually because they want to save money. So, providing all legit customer rewards beyond your product is a great idea to get them back to your store. In addition, it is known that retaining customers can be easier as compared to acquiring new ones. This is one of the primary reasons why companies spend on loyalty programs. So, don’t push your customer to buy your services; offer them better deals and rewards instead.
Encourages Customer Referrals
Imagine you’re at a coffee shop, and your friend asks you to recommend the best laptop. And for instance, you have recently purchased an all-new laptop from a particular brand you trust completely. Now, you will list all of its wonderful features and try to influence your friend to buy the same model. There are high chances that your friend will be influenced. This is the power of customer referrals. Potential customers are willing to know the experience of existing customers. Once all the queries have been answered by people who have first-hand experience, they will become more confident of the products and services offered by the brand.
Moreover, customers will be more than willing to spread the benefits about your business if your loyalty program pays them for referring their friends or on social media.
Builds Social Presence
According to Forbes, 81% of buyers conduct thorough research, find the best deals and read customer reviews before placing an order. While a loyalty program boosts consumer enlightenment in your store, it moreover allows you to remind and reward customers for things like providing product reviews, often using specific Instagram hashtags when sharing images of your products, to name a few. The majority of the buyers trust internet recommendations. Therefore, it’s worthwhile to put effort into this portion.
Builds brand advocacy
You probably know discounts and offering rewards to customers will not always be enough when it comes to attracting their attention. This is because your competitors can do the same. Right? Moreover, customers are much more aware and smarter. So, they need something new and unique.
Almost 15-20% of all of your customers are not with your brand just for your schemes, offers or rewards. Instead, they love your brand or your services. So, it is important to focus on them while your loyalty program can help in increasing their engagement with the brand.
So, whenever you plan to introduce a loyalty program, the essential thing to remember is to organise it so that it will effectively benefit your customers. However, at times, it could take a little longer. But with constant and sincere efforts towards increasing client loyalty, you will be able to avail all the benefits mentioned above.