Can loyalty programs create return customers for a business? In short, yes! But why? In order to build a successful loyalty program that grows your base of returning customers, there are a few critical components of the system that you need to get right. Keep reading to learn what goes into constructing a loyalty program and how it can benefit your business if done correctly.
Incentive/Reward
The most crucial part of a loyalty program is the incentive or rewards that it offers. Loyalty programs are effective because they reward customers for repeatedly bringing their business to yours over your competitors. So getting the right incentive to build customer loyalty will be crucial to creating a successful program that engages and re-engages customers. Most stores use a points system, where accrued points translate into store credit. Other places will include a small fee in enrolling into the program, but then they offer a blanket discount on all purchases. Regardless of the style of program you choose, you’ll want to find a system of rewards that benefits customers without being a financial burden on the company.
Personalization
When people enroll in a loyalty program with a shop and restaurant, they typically have to fill in some basic personal information, such as their name, email, gender, age, address, and other pertinent information. This personal information for individual customers isn’t always at a business’s disposal, so it’s vital that you tailor your marketing strategies to encourage their increased participation in the program.
By tracking their purchases at your business and using data on their demographic, you can send them targeted emails of products that you think they’d be interested in. This direct personal form of marketing will allow you to cut through the fluff of a sales pitch and instead bring a product or service directly to the client. Even if they don’t click on every link, these emails give you increased opportunities to interact with a customer, upping the odds of future sales.
Also, using their personal information, you can send them personal emails, such as a happy birthday notification. These indirect strategies will help you forge a relationship between the business and the customer, creating an increased sense of loyalty to your brand.
Reduce Attractiveness of Competitors
When a customer is considering taking their business between two similar companies with similar prices, they are looking for an x-factor that sets one of the companies above the other. An incentive program can be that x-factor for your business. By offering an opportunity for saving that your competitors don’t, you can increase the attractiveness of your business while simultaneously reducing the appeal of your competition.
Now that you know that loyalty programs can create return customers for a business, there should be little hesitation in installing such an impactful system within your company.
