Did you know that it costs a business about 5-10 times more to acquire a new customer than it does to sell to an existing one? What’s even more interesting, on average current customers spend 67% more than a new one. How can you better partner with your current customers to increase sales? The answer is simple: loyalty programs!
Loyalty programs reward repeat customers for doing business with you. When done well, they can get customers coming back for more, and can turn a “passerby” customer into a loyal brand advocate. If you aren’t currently employing customer loyalty programs, you might be missing out on some serious opportunities that your competition may be capitalizing on.
Here are a few reasons why loyalty programs can be a great tool to grow your business:
- Encourages return business: Loyalty programs shows customers they are valued, and makes them feel special for doing business with you. It is one thing for a business to say “thank you” at the bottom of invoices or receipts, and another thing to communicate that feeling by giving a customer special offers and perks.
- Better marketing: If you have limited insight into who your customers are it’s challenging to market to them effectively. Loyalty programs give businesses a way to gather large amounts of granular data around customers’ user paths, purchase patterns, demographics and more, in order to create complete user profiles. Once you have a better idea of who your customers are, you can group them into segments and market to them more efficiently–which offers your customers a more personalized experience.
- Competitive advantage: Businesses that offer loyalty programs are 88% more profitable than competitors who do not. A good customer loyalty program is an easy way for you to show your personal side and remain competitive in spaces dominated by bigger businesses.
- Increased referrals: Happy customers = brand advocates, and we all know how powerful brand advocates can be. Positive reviews from brand advocates can do more for your brand than many marketing campaigns can. The more brand advocates are rewarded for their loyalty, the likelier they are to share their great experiences on your behalf, generating an increase in referrals.
With thoughtful planning, a customer loyalty program could yield some powerful results for your business. Having an effective customer loyalty program gives you the ability to transcend your relationships with your customers and can provide you with key insights into your customer’s behavior and preferences. It makes it easier for you to give them what they want and allows your business to stand out from the rest. Check back for customer loyalty program ideas for your business!
How have loyalty programs worked for your business?
(Source: Entrepreneur 4/14; Forbes 11/13; Inc.com; Forrester; Deloitte)