Here’s the thing.
It’s more expensive to acquire new customers than to retain existing customers. Think about it. Wouldn’t you have more success selling to your long-term customers, than your newly acquired customers? Your existing customers know you and your business better.
More often than not, most businesses focus more on customer acquisition over customer retention. Sure, it’s necessary to grow your customer base in order to bring in more profits. But it’s equally important, if not more so, to retain your existing customers.
The key is to keep your existing customers happy and keep them coming back to your store to shop more often, i.e., build customer loyalty. There are numerous ways to increase loyalty among your customers. The most efficient way is by offering an efficient customer loyalty program.
Let’s dive into why customer loyalty programs are instrumental for your business to boost revenue, shall we?
What is a Customer Loyalty program?
A customer loyalty program is a marketing approach offered by businesses to reward their customers and encourage them to shop more with them. The rewards are meant to incentivize customers and continue making purchases with the store. These rewards come in various forms – discounts, coupons, redeemable points, free products, and so on.
By offering a loyalty program for supportive long-term customers, businesses can build a great rapport with them, and strengthen their relationship with each other.
57% of customers join loyalty programs because they want to save money, while 37.5% go for it to receive rewards
Benefits of Customer Loyalty Program
1. Increased Revenue
Working on your customer retention boosts profits. The simple logic behind this idea is that your loyal customers trust your brand, and will most likely buy more products from your store. A 5% increase in customer retention can help increase revenue by at least 30%.
2. Strengthen Relationships with Customers
Giving your customers a sense of appreciation for their support towards your store, and rewarding them with discounts offers and so on, makes them feel seen and respected. This act can take your store a long way in terms of building trust and loyalty among customers. Shoppers would be more encouraged to continue their relationship with your store, rather than looking for other options.
3. Better Customer Retention
Better rapport with your customers equals better customer retention. A good loyalty program will make your customers feel happy about being a part of your loyal customer base, and here’s the best part – it’ll increase patience in case of mishaps.
4. Expand Customer Base
There are a few ways a good Customer Loyalty program will help expand your audience. Offering rewards for signups is obviously one of the primary ways, as customers would want to take advantage of discounts and offers. Another way to go about this is word of mouth – your loyal customers are going to suggest your brand to their peers, family, and so on.
5. Save Money
Acquiring new customers is a more expensive affair than retaining existing customers. Creating a kick-ass loyalty program will add to your customer retention efforts. Customer acquisition could end up being almost 25% more expensive than customer retention.
Creating a well-planned loyalty program is greatly beneficial as it can strengthen your bond with your customers and improve customer retention. It will also reinforce the trust your customers have in your brand and improve your store’s brand value!