What are the benefits of Loyalty Programs

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Companies across the world realize that existing customers are super important too. Most businesses are bent on finding new customers that they ignore existing customers, unwittingly though. They need to realize that their existing customers are more likely to buy from them again if they are kept happy. If there is one way to ensure that you never lose focus on your present customers, create a customer loyalty program that rewards your customers who have trusted you already.

Having a dedicated customer loyalty program is a great way to tell your customers that you value their business and are ready to work on making the relationship stronger. Most customers are also familiar with how a loyalty program works and are happy to get into one since it means well for them.

Before you start using the services of loyalty program software, you need to understand how having one will help your case. To put it in simple words, a loyalty program rewards your customers for taking actions that you want them to take, like renewing the subscription, sharing information about you, referring friends, etc.

Let us look at some of the benefits of loyalty programs:

    1. Boosts your reputation :

      They provide an incentive for customers to stay; it also makes them feel as if they are being valued and appreciated for giving you business. When the customer feels appreciated, they are more likely to show their gratitude by recommending your business to others. The act of recommendation, as told by researchers, is a genuine one where the customer is more than happy to talk good things about you because they mean it.

      The more that a customer feels as if they are being respected and valued, the higher are the chances that they will stay with you longer and bring in more of their friends and family into your fold. Getting word-of-mouth publicity is one of the best things that can happen for your business.

    2. Cost-effective :

      Many business owners assume that since loyalty programs involve formulating a reward system, it will involve a lot of investment. Trying to get new customers is a cost as well, but if you were to put the same investment in making sure that your existing customers last, then you are more likely to end up with bigger profits. When you compare a loyalty program versus a program for finding new customers, the former is always the profitable route. In other words, you end up saving more money than you would possibly think.

    3. Increases sales :

      Your existing customers stay with your business because they are happy with your products and services. Let’s say you are launching a new product or service that will help your existing market; who do you think will be your initial set of buyers? Of course, they are going to be your existing customers who already trust you. Even if you were planning to sell a premium product, they would be the first ones who will be ready to buy from you. Even cross-selling and upselling your products would be easy for you.

    4. Get to collect valuable data :

      Most customers prefer a highly personalized experience whenever they shop with you. When you have a lot of your customers becoming a part of your loyalty program by filling out the details, you would understand them better and come up with solutions that are more suited to their specific needs. It will also help you with respect to your targeted marketing campaigns, improve the relationship with your existing customers, and even help you refine your loyalty program.

    5. Increase revenue :

      Did you know that by increasing your retention rate by 5%, you will be able to boost your revenue by 25 to 95%? That’s the kind of impact you will get on your bottom line when your existing customers choose to stay with you. Loyalty programs encourage your customers and give you many opportunities to prove to them that being loyal to you is highly rewarding.

    6. Bigger cart value :

      When you are able to have highly valuable information about your customers, your marketing programs and solution selling abilities will increase dramatically. This way, you will not only be able to suggest product A for a customer but also tell them with specific numbers and examples that will boost their revenue by 40% when they use product A in association with product B. How’s that? You will be able to add a higher value cart from your customers. Not only that, but loyalty programs are also known to bring in customers even during slow seasons. This is highly crucial because these kinds of customers keep the cash flow running.

    7. Let go of non-profitable customers :

      If you are a business owner, you will know that not all customers are equal. Some of them are bad because they expect a lot of services at a cheap rate. They tend to take away a lot of your time and requests to pander to each of their wishes. When you are using loyalty programs, you will be able to let go of customers like this since you segment your existing customers. You will be able to get to know who your least profitable customers are and avoid putting them into loyalty programs if it makes sense to let them go.

    8. Reward your best customers :

      Apart from letting go of your least profitable customers, the best part about loyalty programs is that you can use it to reward your most loyal customers. You can provide them with an even more personalized experience than earlier when you put them in your loyalty program. For continuing to be your customer, they will be rewarded for it, and it will make them happy. Sometimes, it is as simple as that.

    9. Increase customer lifetime value :
    10. With the help of a good loyalty program, you will be able to increase the net profit that a customer will bring you over their lifetime or the CLV (Customer lifetime value). It is an important metric for most businesses because it will help you assess the amount of money that you can spend to acquire one customer. With the help of a solid loyalty program, you can easily increase the CLV by using strategies that will increase their satisfaction levels.

Conclusion :

With so many benefits there for a loyalty program, why are you still hesitating from building one to improve the relationship with your existing user base? It isn’t complex as you might think it is. There are loyalty program tools like 99minds which will make this happen with little effort from your side. You need to be sure about the kind of objectives that you have for your loyalty program and work accordingly. Our dedicated loyalty program software will take care of the rest, it will work like a breeze and provide you with dividends that you might have never thought about earlier.