Loyalty Programs: Why consumers love them and why businesses must have one
If you’ve ever punched a card for a “buy 10, get the 11th free” sub sandwich at your favorite deli or used frequent flyer miles, you’re familiar with loyalty programs and how they work. Loyalty programs are incredibly popular both among consumers and the businesses that offer them. But why?
Loyalty programs work by incentivizing repeat purchases with your brand. In the “buy 10, get the 11th free” example, customers are encouraged to continue purchasing the product until they gain something of value: a free sub sandwich.
Turning customers into repeat customers is an incredibly important business practice that will not only win you the loyalty and customer lifetime value of a satisfied guest, but will also cut down on costs of constantly attracting new customers.
Sure, new customers are important, but old customers are more valuable over time. The key is to turn new customers into old customers and keep on working the cycle to develop a who group of dedicated brand enthusiasts who keep coming back for more.
Loyalty programs, then, are incredibly valuable in this respect, as they keep your customers coming back and give new customers a reason to become repeats or regulars. Loyalty customers feel a sense of kinship with your brand and product and offer far more to your organization than strict sales.
Converting loyal customers into brand enthusiasts requires a great product, exceptional service and customer satisfaction. And while the first two factors are basically within your control, the third is sometimes a wildcard that can make or break your business.
Loyalty programs, while not the be-all-end-all of customer satisfaction go a long way to adding value to your customer experiences with your brand. Sales become more exciting when their loyalty perks pay off in the form of a free add-on, a promo code or expedited shipping on the house. However you swing it, a loyalty reward is likely to push any transaction from ho-hum to good or from great to superior.
Happy customers like to tell people about the things that they like. This is where brand enthusiasts are born.
Brand enthusiasts share positive information about your business/product/brand because they genuinely like what you have to offer. Though, sweetening the deal probably wouldn’t hurt, either. To be clear, this isn’t an attempt to bribe your customers into saying nice things about you (that’s not exactly ethical). But a loyalty program that rewards customers for sharing the good news about the products and service that you have to offer is a win-win for both your brand and your customers.
Incentivizing buzz will lead to increased sales among customers and their friends, which will be beneficial for your bottom line and for building your customer base. Loyalty plays into this with small rewards related to a new customer placing a sale and entering an existing customer’s email address or through special “friends and family” promotional deals.
Willing Test Groups
Another aspect of building a loyalty-based customer cohort is that you end up with a group of people who are passionate about your brand and are most likely willing to test the new ideas and/or products you have coming down the line.
Offering special deals for customers to try new products before they’re released in return for a review or to join a focus group for a discount on a future order gives you unparalleled insight to what your customers really want. Loyalty programs offer this layer of value to your customers and to your business.
Customers benefit because they get to save money while trying out exclusive offers and items that their peers may never experience. And you as a business win because you get to learn more about your demographic and the products or ideas that make them tick – every marketer’s dream scenario.
Lastly, customers who are happy with their experiences interacting with your brand; are saving money and earning points with each purchase; and can share exclusive tidbits about your latest brainchild are an automatic marketing team. These customers are likely to share their thoughts about your products and brand on social media, making your name spread farther than you could send it on your own.
This organic buzz is much more genuine than blanket marketing that blasts one demographic relentlessly. People are more likely to purchase a product because their friends or Instagram connections are excited about it than they are to seek out your product without knowing whether it’ll fill some need that they have or not.
You need a loyalty program to build your brand and increase your customer base. Loyalty programs are worth their weight in gold – even if it means you need to give away a free sandwich or free shipping once in a while. Include your customers in your branding by offering an attractive loyalty program and watch the sales stack up.
If this is something you think your business needs, perQify is the correct loyalty program for you. To learn more, come on over to http://www.perqify.net . Schedule a demo and let’s amplify your business with perQify!
Then build your plan to engage all those loyal customers with our FREE Marketing Calendar.