How A Loyalty Program Can Help Businesses Achieve Their Objectives
Rewarding customers for their loyalty is not a new concept. In fact, this practice has been going for over 200 years, when coupons were collected and exchanged for goods. Today’s loyalty programs are slightly more sophisticated, but the basic premise remains the same.
However, businesses are constantly evolving, as are people’s needs, and research shows many consumers now value their emotional connection with a brand over practicalities like loyalty points and discounts. This suggests companies should be focusing on emotional connections through loyalty, such as understanding their customers’ likes, values and aspirations and staying ahead of the curve as trends change and your consumers’ desires do too.
It seems unlikely that loyalty schemes will ever disappear completely, but with the shift towards human connection between brands and consumers, emotive loyalty is set to be the new norm. Whether your goal is to encourage repeat sales, drive lifetime value or get ahead of your competition, a customer reward scheme is the way forward. Read on to find out how a loyalty program can help you reach your business objectives.
Improved Customer Retention
One of the main objectives for an eCommerce merchant is to retain new customers, and unfortunately this is much harder than it sounds. When facing competition in the business world, customer loyalty is key. Without it, your business could struggle to gain regular income and a substantial return on investment.
Many merchants are launching loyalty programs in an effort to increase customer loyalty. This strategy is particularly common among companies which are having difficulty turning first-time customers into repeat business.
However, it’s important to remember that no loyalty program can guarantee results and you’re not likely to see a positive improvement immediately. As with any new business strategy, you will need to spend some time looking at the finer details. Do some research to find the right platform provider and iron out any kinks in your loyalty program plan before you launch it publicly.
Rewarding Existing Customers
Don’t make the mistake of taking your customers for granted. Just because someone has bought from you a few times doesn’t mean they’ll come back in the future. Most businesses have competitors, some who can offer better prices, faster delivery, or higher discounts.
Take some time to research your customers, understand where they are in their journey with your company and what kind of person they are. Considering these factors when creating a customer loyalty program will enable you to customize the scheme to appeal to your consumers, and deliver the right rewards at the right time.
Driving Lifetime Value
A loyalty program can be beneficial for driving lifetime value, provided you market it to the various personas of your customers. Some of your patrons may be repeat purchasers, who shop from you regularly but aren’t loyal to your brand and are prone to being swayed by the marketing of your competitors. Others may be hesitant buyers, adding items to their basket but never actually following through with a purchase.
Your loyalty program should be tailored to turn a range of customers with varying habits into the persona you want them to be. Customers will dip in and out of different personas throughout their lifecycle with your business and your aim should be to implement different strategies within your loyalty program to lead them back and forth to the persona which is most beneficial for your income.
What Customers Gain from Loyalty Programs
- Better brand experience
- Immediate benefits such as a discount with a first purchase
- Perks, such as free shipping, giveaways, and exclusive deals
As times change and technology evolves, it’s clear brands need to adapt their loyalty program strategies. Gone are the days of stamps and swipe cards. Restaurants and cafes are now encouraging customers to download loyalty apps and keep track of forthcoming discounts virtually, and other industries look set to follow suit.