I’ve always emphasized that a loyalty program can do more than just issuing rewards to your loyal customers. Be it for a restaurant, retail outlet, or hotel, loyalty programs are not only beneficial towards consumers, but businesses as well.
The ideal loyalty program should benefit both the business and consumer. Here are four ways a loyalty program can complete your business:
It drives brand loyalty.
This one requires no explanation; it’s the core of any loyalty program. Customers are attracted to loyalty programs because there is an unspoken understanding that being a member entitles them to exclusive rewards, offers and customer service. This explains why studies reported 87% of shoppers revealed that they want brands to have loyalty programs, while 77% of consumers say loyalty programs make them more likely to stay with brands.
It increases profit.
Gartner reports that 80% of your company’s future revenue will come from just 20% of your existing customers. It’s probably because Retail Touch Points reported that members of loyalty programs typically spend 37% more with a brand compared to non-members. On top of that, brands can also monetize from a loyalty program by using the paid membership system as well as gift cards.
It helps to collect data easily.
A study by Loyalty360 revealed brands that allocate 20% or more of their budgets towards customer loyalty have a better understanding of their customers. Don’t underestimate a loyalty program’s ability to collect the necessary data from your customers. This could be the smallest details such as the basic information of your customers, to the bigger and deeper details like which customer is spending the most, specific dates and more. And this is especially useful for planning future marketing strategies.
It strengthens consumer experience.
This is through the help of personalization. It’s not the usual marketing emails sent out by the masses that addresses you by name. Think about curated playlists on Spotify and Netflix. Studies revealed that 53% believe that retailers who personalize the shopping experience provide a valuable service, while Accenture reports 48% have left a brand’s website and purchased from a competitor due to a poorly personalized experience. A more targeted approach enables you to engage and build a stronger relationship with your customers more effectively, which eventually leads to yielding a richer customer experience over time.