5 Benefits of Having A Customer Loyalty Program

Customer loyalty programs can do wonders for your business.

It’s one of the best ways to increase recurring visits from customers and enjoy repeat sales. Repeat sales means higher profits for your business.

In addition to that, you will be able to know who your customers are, what they like, they don’t like, how much each customer is spending per visit, and so much more.

All these data can be used for targeted marketing and promotions – on top of fostering brand loyalty.

Let’s look at some benefits of implementing a customer loyalty or membership program for your business: 

1) Drive returning customers and get recurring sales

Customers today have plenty of options – which means you have plenty of competition.

You need something that gives you an edge so you can stand out from the crowd. You need to give your customers a reason to pick you over a sea of choices out there.

This is where a loyalty program can come in handy.

For example, if Aaron is deciding between three places for lunch.

Out of choices X, Y, and Z, he has a membership card from Restaurant X which can earn him points and will ultimately land him a free dessert after 5 visits.

Which restaurant do you think he’ll pick? Most probably Restaurant X.

Even if he decides on a different restaurant today – say due to a friend influencing his decision – he will still return to Restaurant X another day to earn his points. Unless he’s had some bad experience there. 

75% of customers said they were likely to make another purchase after receiving an incentive 

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Loyalty programs also help you be more proactive in your promotional activities.

Promotions that coincide with special holidays and birthdays are more likely to bring customers back to your store.

How does this work?

Let’s say Sally’s birthday is coming up and she needs a manicure.

While she is scouring for nearby options, Nail Parlour A sends her a timely text message with a birthday promotion where she is entitled for a full spa manicure for half the price.

She may or may not take the deal, but Nail Parlour A definitely has her attention and has topped her list.

2) Grow your customer base through referrals

The best form is marketing is through word-of-mouth.

People are more likely to take recommendations from their friends or family members instead of an ad they see on social media.

Some customer loyalty tools come with a referral function which you can use to encourage people to bring their friends and families.

That means you get existing customers to bring in new customers for you at no extra charge.

When your existing customers recommend your brand to their friends and family and convert them into customers, these new customers are your direct referrals. 

All you have to do is come up with a referral promo code or discount that encourages your customers to bring a friend.

3) Save costs on customer acquisition

Building a strong base of customers and constantly engaging with them can convert them into loyal customers. 

Loyal customers already love your products and services. Which means they are more likely to come back and make more purchases without you spending money on customer acquisition. 

Did you know that the cost of getting a customer to come back is way cheaper than acquiring a new customer?

Returning customers also tend to spend more money, as shown by this study here.

60% of companies report loyalty customers spend 2-3X more 

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4) Establish brand advocacy – which is basically free advertising

Just like word-of-mouth, brand advocacy is when a customer voluntarily promotes your brand and raves about it. 

They love showing you off and they’re proud of the relationship that they have with you.

For example, fans of Starbucks love showing off their drinks on social media.

Nike fans love showing off their new kicks. Sephora fans love showing off their new makeup. JBL fans low showing off their headphones.

That’s brand advocacy. They’re not getting paid. No one asked them to post it.

They did it voluntarily and will continue to do it because they feel an emotional connection with the brand. 

5) Make smarter decisions and predictions for your business

Studying the behaviour of your customers can be super beneficial for you. 

If you’re using a loyalty program like Eber, it comes with analytics – which means you can study and analyse the patterns of your customers. 

How often do customers frequent your store? What are they buying? How much do they spend on average? Who is coming back and who isn’t? Why?

All these data points can help you understand your customers better. You can also use these information to send out targeted marketing messages.

For example, if someone hasn’t visited your store in 3 months, send them a promo code for their next visit.

If someone has visited your store 3 times in a week, give them 10% their next purchase for being a loyal customer.

These are just a few benefits that you can reap from a loyalty program. There’s so much more that you can do.

Want to learn more? Speak to us at hello@eber.co