Loyalty programs have been the hot topic this year and are helping businesses drive traffic, despite the challenges posed by the pandemic outbreak. These programs are boosting customer retention rates significantly across the world.
Many business owners make a common mistake to focus solely on gaining more and more new customers and not taking care of the existing ones. But they fail to realize that their existing shoppers have the power actually to take their business forward.
The best way to retain your old customers as well as attract new ones is to promote exciting loyalty programs and personalized rewards to convince them to buy your products time and again. Besides, a dedicated customer loyalty program is one of the best ways to say “Thank you”!
If done right, loyalty programs can convert even your first-time buyers into brand advocates and encourage repeat purchases. Want to know about other benefits of rewarding your customers through these loyalty schemes? Read on to learn more!
- Make Your Buyers Feel Valued
If you reward your customers for interacting with your brand, they will feel valued and increase their engagement rates. Besides, they would feel special and understood, which strengthens your bond with them.
For example, little acts of kindness like sending small gifts on birthdays, anniversaries, etc., offering discount coupons or points giveaways, both for new and old customers, add up to building your brand image. Buyers who feel valued will naturally increase their purchase frequency.
Your customers stick to you after you introduce loyalty programs because they can save money on each of their purchases. Therefore, 57% of your customers would engage in your loyalty schemes as they expect to get something extra every time they shop.
- Encourage Customers to Spend More
Since customers get good discounts on every purchase, they actually go ahead to spend more. Loyalty programs, especially the multi-tier ones, actually enable them to remain engaged with your brand.
For example, you can introduce several tiers or levels, such as bronze, silver, gold, platinum, etc., and assign your buyers to one of these levels according to their purchase histories and behaviors.
It is a great way to make your customers engaged as they would eagerly wish to go to the next level. Hence, they will be motivated to shop more to achieve higher discounts, rewards, or other benefits provided in the upper levels.
Needless to say, if your sales increase due to loyalty programs, your profit margins and overall annual revenue is bound to accelerate!
- Promote Repeat Purchases
There’s nothing like having returning customers and repeat purchases, as it gives business owners a feeling of satisfaction! Through loyalty schemes, you can actually go beyond the usual buying and selling thing found in every business.
Even if you have great products, it’s essential that you give your buyers an additional reason to choose you over others. Study shows that repeat customers are more profitable for any business owner since they spend 67% more compared to first-time buyers.
A loyalty program not only encourages consumers to spend more, but it also acts as a great tactic to boost their purchase frequency and spending amount on every visit to your store. Besides, it builds brand image and increases your overall monthly sales.
- Provide Valuable Customer Insights
Loyalty programs enable eCommerce stores to build long-lasting relationships with their consumers by offering them several benefits. One of the important benefits of these loyalty schemes is gaining actionable customer insights.
But how’s that possible? After gaining something of value, customers don’t hesitate to release their personal details in return. Along with that, they also provide you the permission to track their buying patterns and behaviors. You can then use this vital data to strategize your campaigns and promotions to offer more personalized services and products.
These insightful data about your consumers, can, therefore, increase your sales, and enable you to enhance customer satisfaction by personalizing your buyers’ journey! A secret is customers won’t mind sharing their personal info if they get that extra care and attention in exchange, and as long as you send them relevant offers and discounts.
- Gain More Positive Reviews and Customer Referrals
Happy customers mean more positive reviews and customer referrals, which are a great way to boost your sales. And customer loyalty programs make your buyers more than satisfied, and they are readily willing to recommend you among their friends and family circles.
Positive reviews also attract new customers since most of them would base their buying decisions by relying on testimonials. Study shows that 91% of consumers would read genuine feedback posted by consumers on the brand’s social platforms, and 84% of buyers would actually trust them.
In short, through loyalty programs, you can create brand advocates since so many of them trust word-of-mouth recommendations, which contribute to your sales significantly! It means through loyalty programs, you gain happy buyers, positive reviews, and attract new customers! This is a fair deal enough, isn't it?
- Increase Customer Lifetime Value
One of the best things that loyalty programs can do for your business is to enhance customer lifetime value (CLTV or CLV). CLV refers to the total profit attributed to the entire relationship you have developed and maintained with your customers. It also monitors how valuable your buyers are and how long they are going to stay with you.
By offering unique loyalty points and rewards, you can gain data on your customers’ buying habits, and track their emotional decisions based on past purchases, etc., enabling you to know exactly what their needs and interests are! Further, you can make more informed marketing strategies and decisions by incorporating an emotional appeal into your campaigns.
- Better Communication
Through loyalty programs, you can directly communicate with your consumers, which helps solve a lot of issues and misunderstandings. Direct communication can help build stronger relationships with your buyers, which further enhances your brand loyalty.
Try sending personalized emails by matching previous purchase dates and other records, and avoid sending generalized ones. For example, based on their past purchases, you can send them relevant products, give price drop alerts, wish them on their birthdays or anniversaries, or simply remind them after cart abandonment cases, along with a special discount code or voucher.
Also, whenever possible, try incorporating fun to give your buyers that extra cheer. In short, do whatever it takes to make your consumers smile after they see your brand name, your products, or your personalized rewards!