Having loyal customers is a very important asset for any business. Customers who are satisfied with your services or products tend to be of higher value for your company, being more likely to have repeat purchases and generating more revenue for the business.
When it comes to keeping a customer loyal, there are different steps that must be taken by the business owner. The first step is to have an effective marketing strategy, an efficient website, and good product or service quality. But these tactics alone will not help you deliver results (i.e. increased revenue) if you fail to capitalize on the qualities that are already making your customers more likely to come back to your business.
A better way is to have a customer loyalty rewards program that helps you increase your revenue stream, reduce costs, and ultimately increase profits for your company. Building a customer loyalty program can be challenging as it requires investment in money and time. In this article, we’ll explore some strategies and tools you can use to set up a loyalty program in a simple and cost-effective way.
4 Reasons Why Your Business Needs a Loyalty Program.
Loyalty programs have been around for many years. The main purpose of customer loyalty strategies is to boost profits and keep customers coming back. Here are some reasons to create one for your loyalty strategy and keep your customer interested.
1-Promote repeat business.
The main objective of any loyalty program, regardless of the kind that is implemented, should be to promote repeat business. All kinds of programs must have incentives that motivate customers to keep buying your goods or services, over that of a competitor. For example, some businesses hand out punch cards to customers that allow them to claim a free item after they’ve done a certain amount of purchases. It’s a simple and classic incentive to entice customers to return to your establishment.
2- Decrease in The Attrition Rate.
When customers have a bad experience with your company, they tend to defect. The percentage of customers that stop engaging with your business is called the Customer Attrition Rate. Customer attrition is a serious issue that many brands across industries attempt to tackle, as the costs of retaining a customer are often far lower than those of recruiting a new one. Loyalty programs are an important tool for addressing this problem. When customers feel known and cared for with special benefits, they’re less likely to defect, thus reducing the attrition rate.
3- Help in Acquiring Customers.
Happy customers become brand advocates. They can then persuade potential customers and recommend the company to them. A loyalty program that provides excellent rewards helps promote brand advocacy and can greatly expand the customer base.
4- First-Party Data Access.
Loyalty programs are great sources of first-party data in accordance with general data privacy compliance guidelines. First-party data can provide you a better understanding of your customers, help you assess your position in the market, and can even be used to create more effective products, services, and marketing plans.
Loyalty programs are an excellent source of data because customers are more than happy to volunteer their information while participating in a rewards or loyalty program.
Big or small, your business will certainly benefit from a loyalty program. Now the next step is to decide which type of program suits the needs of your company best.
Select a Kind of Program That Align with Your Brand.
One of the most important decisions brands makes when launching or redesigning their loyalty program is determining which type of program best aligns with their needs. For this decision, it is necessary to be clear about the goals you want to achieve with it.
Define the loyalty program’s goals.
Businesses should be clear about the results they hope to achieve through a loyalty program, such as increased sales or participation. For instance, a company might aim to raise awareness of its cause or brand. The company might increase sales if it interacts with current patrons and donors who post about their experiences on social media.
Some examples of loyalty programs that you can implement depending on what you want to achieve are:
Points-based loyalty programs.
The customers get their rewards for acts such as recommendations, repeat purchases, and subscriptions.
Cash Back Loyalty Program.
Points programs and cash-back programs are very similar. Spend a particular amount to receive a given amount back, typically in the form of coupons or “cash” that is only redeemable at a specific shop. The added benefit is that they’re simple for customers to understand.
Tiered loyalty programs.
This type of program offers various prizes in accordance with the members’ accomplishments. These achievements are frequently expressed in financial terms. The higher tier a member enters, the more they spend.
Because they add layers of exclusivity to the program, these milestones can be a wonderful way to boost member engagement.
Coalition loyalty programs.
This is a loyalty card program that rewards users for sharing their data with other businesses.
They appear to boost a brand’s transaction counts. However, they aren’t the best choice for a loyalty program because they’re ineffective in inspiring genuine loyalty.
Gamified loyalty programs.
These programs provide challenges or games to keep people interested.
A gamified loyalty program offers an effective collection of tools to better engage your consumers and generates positive emotions like excitement, mystery, and joy to promote specific actions.
Value-based loyalty programs.
They display a company’s ideals and give a percentage of revenues to particular causes or charities. This type of program elevates the brand itself.
Paid loyalty programs.
In stark contrast to the traditional programs mentioned above, members of these fee-based loyalty programs must pay upfront for immediate benefits that they can use whenever they choose.
Start Your Customer Loyalty Program Today with the right tools.
Building a loyalty program can be a daunting task, one that many companies see as too costly to start. But if you get the process right, a loyal customer who knows that they’re recognized for their fidelity creates a powerful brand ambassador.
The right tools can make all the difference to start implementing your loyalty strategy and retain your customers at the same time you gain new ones.
Some of the digital tools that you can use for the different stages with your clients are:
Content Collection Tools.
The first step in running a loyalty program is getting to know your customers. A content collection tool like File Request Pro lets you create easy-to-use web forms that can support different points of your loyalty program lifecycle.
Signing up clients with Content Collection Tools.
Making it easy for customers to sign up for your loyalty program is crucial for its success. By streamlining the enrollment process, you’ll make it more likely that customers will take the time to participate.
A content collection tool allows you to gather information from users and store it in a central location. By gathering this information, you will be able to create marketing strategies that are tailored to your client’s needs and interests.
With File Request Pro you can also increase client trust in your content collection process by branding upload pages, so they fit with your in-house style.
Run surveys to understand your client better.
Gain insightful knowledge on what client wants and needs by surveying their interests. Your clients are your top priority, so understanding them is critical in ensuring their satisfaction.
For example, you could ask them about their previous experiences with similar products or services. This will give you a better understanding of what they are looking for and how you can make your product or service appeal to them. You could also ask them questions about their buying habits and preferences, to get an idea of what would motivate them to make another purchase. File Request Pro lets you create smart surveys with conditional logic, so clients only see questions relevant to them.
Demographic Segmentation for Remarketing.
As was established before, loyalty programs are a valuable source of information for remarketing purposes. Remarketing is a powerful tool that can help you keep your customers coming back for more. By targeting ads to specific groups, you can ensure that your message is reaching the people who are most likely to be interested in your product or service.
That’s where demographic segmentation comes in. By dividing your customer base into different groups based on factors like age, gender, income, and location, you can create targeted marketing campaigns that are more likely to resonate with each group. Using data from loyalty program members, you can more effectively target your ads and maximize your chances of converting customers into repeat buyers.
Build an Email Marketing Strategy for your Loyalty Program.
For a loyalty program to be successful, you need to have a way to promote it and keep track of your customers’ activities. Once you have a database of your customers’ email addresses thanks to the registration form, you can start to build an email marketing strategy. This can help you keep customers informed about sales, new products, and special events. You can stay in touch with them and let them know about new developments with your loyalty program.
It also allows you to target specific customers with tailored messages like special promotions and contests that will keep your customers engaged.
Software for Managing your Loyalty Program.
It’s not enough to email customers and asks for their information. All that data must go somewhere, and if you wish to tap into the power of all that customer data, you need a tool to browse and analyze it.
The options are better than ever for small businesses and independent organizations looking to create a loyalty program. But choosing a program will depend on your needs and budget. If you’re looking for a hands-on solution that you can customize personally, many developers recommend using a Loyalty Management System rather than an in-house solution.
This type of software system helps you create and launch an in-store loyalty program in minutes, without any programming or IT expertise required. And, because it’s digital, you can customize it to fit your specific needs. Some of the most popular software on the market are StriveCloud App Gamification, Piggy, Annex Cloud, and GetFeedback.
A downside of a dedicated platform for loyalty management is that they’re sometimes targeted for large businesses or for specific industries, such as airlines or retail. Another alternative for small and medium-sized companies is to adapt tools they may already be using for the purpose of running their loyalty program. An example of such a tool is Salesforce. As one of the most widely used CRMs in the world, Salesforce has evolved over the years to provide multiple solutions, including customer loyalty management.
Built on the Salesforce platform, its loyalty management system enables businesses to offer initiatives for customer appreciation, retention, and reward. You can plan and build loyalty programs, manage members and partners, and more with the help of the platform. Additionally, you may organize promotions, award members, and monitor their activity. Salesforce allows you to create a member-specific single source of truth that enables mass personalization and integrates loyalty into the whole consumer experience.
What Is the Best Solution for Me and My Business?
Each business should decide on a solution based on its strategy or goals. For starting out, a simple choice could be using a combination of a Content Collection Tool such as File Request Pro for collecting customer data, integrated with a CRM with Loyalty Management functionality like Salesforce to store and access customer information, and an email marketing platform such as MailChimp or Sendinblue in order to keep your new loyal customers engaged and informed. With this combination of simple tools, you can kickstart your loyalty program quickly and with tools, you may already be familiar with.
As we’ve discussed in this article, loyalty programs are key for long-term success. Organizations should take their time to carefully prepare and implement the correct kind of program that fit their business needs while being flexible enough to change tactics if the desired results aren’t initially met. Soon enough, your customers will feel appreciated and more deeply connected to your business.