People love being rewarded for all sorts of things. From receiving badges for checking in using a smartphone app, to getting flyer miles, and even getting points for buying the latest electronic gadgets, people love rewards. Businesses also love rewarding people not because it feels good but because it helps grow the bottom line. Why?
Keep Your Current Customers – A loyalty program gives your current customers a reason to continue buying from you. Additionally, as your customers redeem their rewards, their level of engagement and enthusiasm rises. Also, once you start collecting data from your customer loyalty program you’ll be better able to identify and meet their needs. This will allow you to better segment your marketing efforts and better target these customers with the products / services they really want to buy.
Find New Customers – How valuable and exciting are your rewards? The answer to this question will attract new customers to your business. Attracting new customers should be one of the main focuses of any businesses. However, with a loyalty programyou can ensure you attract the highest quality customer. This can be done by examining the demographics of your current and best customers and using that data to target new customers. This allows your business to focus its time and money on attracting customers you know want to buy from your business.
Get Back “Lost” Customers – In addition to finding new customers, another idea is to use a loyalty program to bringing back customers who haven’t purchased from your business in awhile. Doing this can see conversion rates which are three or four times higher than prospecting for new customers. The reason for this is because you already have data about these customers through past purchase history, how to reach them, and their preferred channel of communication.
Enhance Your Marketing Dollars – Since you’re already collecting data on your best customers, you can use this to better channel your marketing dollars to achieve a higher ROI. You can focus your resources on customers you know will already be coming back to better maximize their spending with your business. In addition, with a loyalty program you’ll better be able to determine what communications channels are delivering these customers and which ones are not bringing them to your business. You’ll be better equipped to focus on the marketing activities that are delivering a measurable ROI and drop the ones that are not.
Whether you’re a major airline, a newly opened restaurant, or a retail store with multiple locations, having a loyalty program will help your business increase sales and lower operational costs.