Creating a loyalty program will help your brand reap both short- and long-term rewards. A loyalty program is simply a program you set up to reward your customers with exclusive benefits. When done right, it can help you engage with your existing customers on a regular basis, enticing them to visit you more frequently and spend more money.
When you please your customers with perks they desire and can use easily, they will be your best brand ambassadors, happily spreading the word to friends, family, and coworkers about how much they love your rewards program. This will create excitement around your brand, which in turn, will entice new customers to check it out.
Consumers view loyalty programs favorably, according to a study by Forrester Research, and are looking for new ones they can benefit from. Here are five ways a loyalty program can benefit your brand:
Drive repeat business with smart rewards and discounts
Members of loyalty programs spend an average of 12 to 18 percent more than regular customers, according to research conducted by Accenture Interactive. Make it as uncomplicated as you possibly can, so consumers don’t have to worry about how to earn rewards.
For example, points are a simple concept. If you offer one point for every dollar spent and offer something special after the accumulation of 100 points, that is easy to understand. Customers know every time they spend $100, something good will happen, like getting rewards cash to apply toward a future purchase or a free shipping offer.
Some customers may even be willing to pay a fee for enhanced benefits. One prominent example of this model is Amazon Prime. Amazon Prime members pay $119 a year and get free 2-day shipping with no minimum purchase needed and other perks like free e-books, music, and photo storage, not to mention access to Prime Day deals.
Give you information about your customers
You can learn things about the people who make purchases from you when they sign up for your loyalty program: geographic region, age, gender, etc. At sign-up, they fill out a form with name, address, email address, etc. This also marks the chance to ask them some lifestyle-related questions such as their age, gender, what their favorite hobby is, and how often they purchase online.
Due to the popularity of social media, companies can learn more about the people who buy their products by implementing influencer marketing programs. Social media users with large followings advertise a company’s products in exchange for perks and free stuff. According to Forbes contributor Tina Mulqueen, these influencers can also receive a percentage of sales in exchange for promoting products. These kinds of programs represent a new kind of loyalty program, reserved for a select group of trusted consumers, Mulqueen says.
Allow you to better manage inventory
When you learn what specials and promotions your reward program participants act on, you will learn more about how your products are received and about managing your inventory. You can better predict demand as a pattern of purchases emerges.
You can better prepare for peak times like Christmas, for example. You can attract more buying by engaging with your customers at these peak times with special offers they can’t resist. They in turn will advertise for you with increased word of mouth referrals. And these referrals result in new customers that are free to acquire, and which can generate even more revenue for your business, says Sophia Bernazzani of HubSpot, because customers referred by loyalty members have a 37 percent higher retention rate.
Maintain regular contact with your customer base
Loyalty programs help create a more exciting customer experience and keep customers engaged. Customers who are loyal to your brand have come to expect benefits for their return business, says Forbes contributor Tina Mulqueen. Mobile capability is a must for this group so they can connect with you wherever they are. With smartphones, rewards programs can prompt real-time action.
Serves as a differentiator when consumers have choices
When customers are contemplating a purchase that they can make in a number of places, then your loyalty program may become the deciding factor. For instance, if someone wants to buy a new pair of jeans, he may be considering a pair from L.L. Bean and another one from Lands End. But because he’s already signed up for L.L. Bean’s rewards program and even got the L.L. Bean-branded Mastercard, he will be more apt to make the purchase there, since he knows he will receive free shipping, has a good promo code he received in his email that morning, and will get reward points toward his next purchase. So L.L. Bean gets the sale.
Rewarding customer loyalty with perks, specials, and promotions makes a great deal of sense. Not only will you be thanking your valuable existing customers and learn more about them, you will engage with them on a regular basis and remind them of the existence of your brand. Your brand will benefit from increased positive word-of-mouth advertising and a boost in sales. It’s definitely worth the time and any start-up administrative costs of adopting such a program. Start building customer loyalty today.
References:
http://www.oracle.com/us/solutions/consumers-loyalty-programs-3738548.pdf
