If you want to encourage customers to keep coming back, then ‘loyalty’ needs to be a bigger part of your business. In fact, it needs to be a central and strategic goal. Customer retention isn't easy to do, but research shows that customers spend 67% more when they're part of a customer loyalty program, so it's worth the work to do it right. Keep in mind that loyalty schemes are a long-term investment that may not pay off for months or even a year. It takes some time to build up a scaled reward program that gets measurable results. But when done well, customer loyalty is the gift that just keeps giving.
Your secret weapon to success
The longer a customer is involved with you, the more likely they are to come back, buy more, and move up in their loyalty standing. At a certain point in the customer journey, they reach what we can call "the loyalty point," where customers become loyal to your brand: Here, customers suddenly begin to buy more and stay longer and remain loyal to your business long term. If time and accuracy are on your side, a great loyalty program will benefit your customers in real ways, and it will speed up the loyalty lifecycle across the whole database. So what are the most important benefits of a well-run rewards program?
Benefits of a great reward program
1. Higher Customer Engagement
"Engagement" is a big buzzword that we often hear. When we talk about loyalty, we mean that faithful customers are more likely to talk to you on social media, open and use your app, and sign in to their accounts. Essentially they are motivated to act, buy, and share more. Lifetime worth is much higher for loyal buyers than for non-loyal buyers. Customers who choose to join a closed group or forum, like a loyalty program, do so because they want to be there. You don't have to try as hard to win them over as you would with a new customer; rather, you just have to give them what they say they want. As a result, your loyalty members will likely be the most involved group of all your segments, which shouldn't come as a surprise.
2. Effects on brand loyalty that can be measured
Once a certain number of loyal users is reached, mindshare goes through the roof. In theory, your customers won't even think to check out what other companies have to offer. When a customer reaches that certain loyalty point, they switch from being focused on the goods to being focused on the brand. This is how you know you've done loyalty right: when you have loyal fans of your brand who keep coming back no matter what you do. As you raise the value level in your loyalty program, you decrease people's ability to change their minds and, in turn, increase their loyalty. It makes sense that if your customers keep getting more out of their membership, they'll be more likely to stick with your services or goods. Good loyalty plays make people more likely to buy, more likely to buy often, and more likely to recommend, share, or refer a friend.
3. Better experience for returning customers
One of the best things about reward programs is that everyone benefits from them. Customers need a personalised customer experience from you to feel like they're important, but in order to know how to do that, you need information on them. The answer to this is to get each customer to do as many "touches" with your brand as possible. Touchpoints help you glean more information about your customer. With more info, you can then begin to personalise the context and the content they are engaging in. And that's what makes people loyal. When the customer gets a more personalised experience, you get to build a good relationship with someone who picks you again and again.
The bottom line
It takes a lot more effort, time and money to get a new customer than to keep an old one. You have to pay for new buyers. Each new customer costs you something upfront. But people who stick around are like waterfalls: They keep making you money over and over again. You pay for them once when you get them, but it doesn't cost anything to keep them. In the future, brands that put more emphasis on keeping customers and using resources to figure out how return customers help the business will win. At scale, you want about 75% of your business to come from return customers and 25% to come from new customers. There isn't much which is more useful than having a large number of repeat customers who make up the majority of your database. As soon as you start getting more loyal return customers than new ones, your whole business will change. To invest in your loyalty program today, consider a Merchant Capital Cash Advance and fund your growing business in the next 48 hours.