Keeping your existing customers loyal requires much less effort, time and resources than trying to tap into new markets. It also lends you a significant degree of free advertising. There are several ways that a Customer Loyalty and Reward Program will help keep your customers loyal.
Customers are at the heart of a business' success. While it's important to look for new markets and opportunities, it's also essential that businesses are able to retain their current customer base. And the best way to do this is through a Customer Loyalty and Reward Program.
The benefits of loyal customers
There are several benefits of prioritising customer loyalty:
1) It's cheaper
Put simply, it takes far more time, resources and effort to recruit new customers than it does to retain loyal ones. In fact, research from Gartner indicates that 20 per cent of your existing customers will generate 80 per cent of your overall profits.
You also have a 5 to 20 per cent chance of selling to new customers compared to up to up to 70 per cent with existing ones, according to Marketing Metrics.
Think Apple. They have millions of loyal customers, ones who don't ever consider buying a phone or laptop that doesn't have that apple logo on it. The corporation knows it can get away with charging higher prices because once people go with Apple, in many cases they don't switch afterwards. A Morgan Stanley survey found that 92 per cent of Apple iPhone users who are likely to upgrade within the next 12 months would pick Apple again over any competitor.
2) Free marketing
A loyal customer will frequently talk about the benefits of going with a particular brand. Other people will be able to see that most of someone's products are from one particular brand and then wonder whether they should try that brand out too.
Loyal customers are much more likely to push someone who is unfamiliar with brands and wants advice on who to go with towards your business, which means they can win you new customers.
And, loyal customers are more likely to defend your business or stick with you if something goes wrong. Apple's loyalty stats continue to be high despite the fact that allegations have been made about poor working conditions in its Chinese factories.
How can a customer loyalty program help?
Customer loyalty programs are one of the principal ways brands can inspire repeat customers. It's also one that your competitors are likely to be using - Accenture research shows that 90 per cent of companies have a customer engagement or loyalty program.
So, how can you differentiate yours?
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Use data - customer loyalty programs give you invaluable insight into your target market. They'll show you what products people are buying and how often. You can use this information to improve your product offering, as well as work out where your customer loyalty program can be made better.
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Stay focused on the customer experience - A loyalty program won't cancel out a terrible customer experience, so ensure you are still focusing time and resources on ensuring your customers are happy at all stages of dealing with your brand.
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Keep rewards fresh - You don't want your customers to get bored of your loyalty program or they'll associate that feeling of boredom with your brand. They probably aren't going to want the same prize twice, so ensuring you change it up frequently is important.
One way to do this is to offer them a choice of prize. Power2Motivate's extensive rewards gallery allows your customers to build up points and then spend those on exactly what rewards they want - leaving them in control. Our Customer Loyalty and Reward Program also has extensive data analytics functions, meaning you can see exactly what's working and constantly improve your offering.
For more information, contact the team at Power2Motivate or request a demo today.