While all businesses need to attract new customers, it’s equally important to keep existing ones. There are many ways to retain customers, but today we’ll focus on customer loyalty programs.
How do you create a customer loyalty program? This post will explain how customer loyalty programs work and how you can use them to retain more customers.
- What are Customer Loyalty Programs?
- But Why Is It So Vital?
- How to Create a Customer Loyalty Program
What are Customer Loyalty Programs?
Customer loyalty programs offer participating customers rewards or special benefits for their purchases that aren’t available to non-participating customers. They can be in the form of loyalty cards, keychain fobs, stickers, or even paper punch cards.
A customer loyalty program may be free to join or may require an annual fee. Your business’s loyalty program may be free or require a small investment.
Customer loyalty programs combine human competitiveness and consumer desire for free stuff. The customer is pleased, and the hosting company makes more money and gains the customer’s loyalty.
But Why Is It So Vital?
Loyalty programs increase customer retention and are a great local advertising idea. But why is it so vital?
-
Customer loyalty leads to increased satisfaction
Repeat customers also provide valuable brand insight. Repeat customers will provide honest feedback. This feedback can help you improve your business and increase revenue.
-
Customer loyalty can help cut marketing costs
The customer buying journey starts long before the sale. Before buying a product or service, most people do some research, either by reading reviews or asking a current customer for advice.
More loyal customers mean more positive feedback for prospects and less marketing and advertising costs. Word-of-mouth marketing is effective.
-
Customer loyalty boosts profits
Customer retention has many advantages. According to the 80/20 rule, 20% of a company’s existing customers generate 80% of its profits! A slight increase in customer loyalty can significantly boost profits.
Customers are not only profit sources but also potential promoters. Plus, retaining existing customers is cheaper than acquiring new ones.
-
Customer loyalty can help your company survive
Finally, building customer loyalty will help your company avoid competitors. Customers who trust a brand will stick with it no matter what.
Customers who are satisfied with your service will continue to patronize your business even if a trendy new brand enters the market.
How to Create a Customer Loyalty Program
Setting up a customer loyalty program for your company takes little time and effort.
- Setting of goals for your customers
- Determine the manner in which customers will progress toward the objective
- Provide an initial boost to customers
- Publicize Your Loyalty Plan