Most of us would already be part of a loyalty program in our daily lives. Be it collecting stamps each time you purchase your favourite bubble tea to redeem a free drink, or earning points at your local grocery store for a discount off your next purchase. Loyalty programs have become an integral part of daily life.
For businesses without a loyalty program, the foremost question would be why should I invest in one?
Why should I invest in a loyalty program?
It doesn’t take a seasoned marketer to know that retaining customers are more cost effective than acquiring new ones. Research has also shown that returning customers tend to spend more. Maximising revenue from a current customer pool is an immediate opportunity for every business.
Creates a driver for top line. Rewarding your customers creates tangible value for your customers, increasing the perceived value of their transaction and of your brand. By dangling the carrot of free gifts or discount tiers, customers are enticed to increase spend per transaction or shop more frequently. 59% of shoppers stated they would be encouraged to shop more with a brand if it had a loyalty scheme (ICLP).
Loyalty programs also promotes a deeper understanding between your customer and your brand. Data collected from members can be used across many functions in the business. Everything from demographical data to transaction data helps provide insights into everyday business decision and most importantly shed light onto overarching business strategies. For example, address information collected can help a retail store decide where to open its next outlet.
Future-proof your business. In today’s highly competitive retail scene, besides price, product quality, service and experience, how else can you stand out from the crowd? 72% of global consumers agree that, all other factors equal, they’ll buy from a retailer with a loyalty program over one without (Nielson)
Keeping up with competition. A reward/loyalty program helps create a memorable shopping experience with your customers. A study done by Forrester in 2017, says that members of loyalty programs rate their overall customer experience higher than non-members.
All in all, an attractive loyalty program is not only a fantastic way to engage with your current customers. It is also fast becoming the quintessential marketing tool of the decade to not only provide levers for tactical promotions, but most importantly acts as a driver for long-term success.